Immigration and Social Security: Some Thoughts - Immigration Impact

As most folks who read the posts on this site are keenly aware, Social Security is facing a long-term solvency problem. Simply put, the system is operating in deficit mode, paying out in benefits more than it’s taking in through taxes and interest. Promised benefits are continuing to be paid, using the nearly $3 trillion cash reserve built up during the past several decades. It’s no secret, of course, that this can’t continue without corrective attention, and the program’s reserves are estimated to be fully depleted by 2033 (latest Trustees’ Report projection of record).

So, with more and more eyes focused on the problem, one of the frequent misunderstandings rising to the top is the impact that immigration is having on Social Security’s financial situation. Many of the callers we handle at the AMAC Foundation’s Social Security Advisory Service have the belief that immigrants are a significant part of the problem facing the program but, as explained in a post by Nan Wu, Deputy Director of Research at the American Immigration Council on their website, it appears the reverse is true.

As Ms. Wu explains, studies have verified that ” … immigrants are net contributors…” to Social Security, contributing $165.9 billion to the program’s revenue stream in 2019. In addition, she notes, ” … another study finds that immigrants paid nearly $500 billion more to Social Security than the benefits they received from the system in the 1998-2022 period. Their total net benefit to Social Security is predicted to reach $2.0 trillion by 2072, helping ensure the long-term solvency of the program.”

What often creates the public’s misperception of immigrant impact on Social Security is the frequently repeated allegation that illegal or undocumented immigrants draw Social Security benefits without paying taxes, a rumor that is proven false by the simple fact that it takes an earnings record, supported by documented payment of payroll taxes, to qualify for benefits. Those working under a fraudulently acquired Social Security number actually contribute payroll tax revenue without the ability to ever draw benefits against that work record, since filing for Social Benefits requires proof of U.S. citizenry or, for noncitizens, proof of legal residency.

To read Ms. Wu’s article, click here. Also, to learn more about the AMAC Foundation’s free-to-the=public Social Security Advisory Service, click here

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