Banking on illegal labor

Undocumented workers in the U.S. generate billions of dollars in payroll taxes each year -- and don't see a single benefit from it.


Julia Scott
April 6, 2005 11:36PM (UTC)

Those who argue that illegal immigrants do more harm than good to the U.S. economy may want to reconsider based on what the legions of low-paid workers, many of them Mexican, contribute through the nation's tax system. According to an article in Tuesday's New York Times, illegal workers are to thank for billions of dollars in payroll taxes each year: They generate as much as $7 billion annually in Social Security taxes, and $1.5 billion annually in Medicare taxes -- contributing to just about everyone's benefits but their own.

At rates like that, undocumented workers -- who are forced to register fake Social Security numbers to find work, and thus pay taxes -- are among the county's most reliable contributors. "Our assumption is that about three-quarters of other-than-legal immigrants pay payroll taxes," Stephen C. Goss, Social Security's chief actuary, told the Times. He estimated that without them, Social Security's long-term deficit over 75 years would increase by 10 percent. While President Bush continues campaigning to save Social Security from a revenue "crisis," at least he supports immigration reforms more favorable to guest workers.

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But it still suits some hard-line Republican lawmakers to continue to paint illegal workers as a menace. And with new legislation designed to reinforce the U.S.-Mexico border and make it more difficult for illegal immigrants to obtain IDs, they may have the upper hand.


Julia Scott

San Francisco-based freelance journalist Julia Scott writes about water and energy issues for various publications. She also covers the environment for Bay Area News Group, a chain of newspapers in Northern California.

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