Politics & Policy

Robbing Rector

Does the WSJ read before they editorialize?

Last week, a Wall Street Journal editorial set out to debunk a certain “myth that has become a key talking point among restrictionists on the right,” namely, that low-skilled immigrant households impose a huge net-cost on American taxpayers. The major study on this issue is by the Heritage Foundation’s Robert Rector, and it is that study that the editorial purports to refute.

#ad#The editorial, however, failed in its aim. In fact, the editorial willfully ignored differences among different immigrant populations and displayed little understanding of the administration of government benefits and services. The Wall Street Journal’s analysis was so unresponsive to Rector’s report that it would seem the editorial’s author was simply unfamiliar with Rector’s detailed findings.

The editorial noted that Rector’s study, “The Fiscal Cost of Low-Skill Immigrants to the U.S. Taxpayer,” found that “‘the average lifetime costs to the taxpayer will be $1.1 million’ for each low-skilled immigrant household.” Not to bicker over details, but Rector’s paper actually puts the lifetime cost per low-skilled household at “nearly $1.2 million.” That figure is based on the calculation that, in fiscal year 2004, low-skilled immigrant households received on average $30,160 in benefits and services (including means-tested aid, education, and population-based services like police and fire protection) and paid only $10,573 in taxes (including property and excise taxes and even lottery-ticket purchases). So the fiscal “deficit” of each low-skilled household is $19,588. About 60 percent of adult illegal immigrants lack a high-school degree and so are considered “low-skilled” in Rector’s analysis.

The editorial attempts to reveal “one basic flaw” of Rector’s study, not by examining his analysis of the extensive government data that support his conclusions, but rather by making reference to research from the Immigration Policy Center, the policy arm of the trade association of immigration lawyers.

It is true that Rector does not account for certain contingencies entertained in the IPC’s research — for instance, the fact that among the population of high-school dropouts in American are included self-made billionaires Ray Kroc and Dave Thomas (the founders of McDonald’s and Wendy’s), and that such persons just might be lurking among the 4.5 million low-skilled immigrant households.

Yet it is not for this that the Wall Street Journal refers to the IPC research. Rather, it is because the IPC points out, rightly, that recent immigrants are not eligible for many federal welfare benefits. Of course, Rector’s report acknowledges as much, which the writer of the editorial would have noticed if he had made it through page 9 of Rector’s 70-page report.

Rector details the government benefits typically received by the pertinent households, fully accounting for the welfare ineligibility of recent immigrants — the result, we might add, of a provision in the 1996 welfare reform legislation that Rector is largely responsible for. As Rector explains, “Most of the tax and benefits estimates in this paper are unaffected by a low-skill immigrant household’s legal status. . . this analysis adjusts for the lower use of government and benefits by illegal [and legal] immigrants.”

The Wall Street Journal apparently doesn’t understand that, while recent immigrants are ineligible for certain welfare benefits, their citizen children qualify for means-tested government aid. And Rector’s calculations rely on the receipt of government benefits these households self-report to the Census Bureau.

After failing to make a careful accounting of benefits received and taxes paid by low-skilled immigrant households, the editorial then ignores the specific characteristics of these households by citing the incomes and contributions of immigrants in general, including college graduates. The editorial irrelevantly states that “immigrants who have just arrived have median household earnings of $31,930.” Workers in the low-skilled households — i.e., the subject of the report ostensibly being debunked — have annual incomes of $18,490.

Robert Rector’s careful analysis demonstrates that low-skilled immigrant households consume far more in government benefits than they pay in taxes. The Wall Street Journal’s careless editorial demonstrates that his critics are unable to credibly disagree.

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