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America: Selfishly Open-Hearted
By Bernard Wasow, The Century Foundation
April 5, 2005
The Social Security debate is growing cold, with the Bush administration seemingly unable to light a fire under it. It is encouraging to see bad "reforms" sent to the trash heap, but it would be good if some of the ancillary issues continued to attract attention. One of those-a key to the long run health of the Social Security system as it is a key to the vitality of American society-is immigration.
The Social Security trustees' report downplays the role of immigration. That is because even their optimistic "low cost" forecast is very conservative on immigration. In forecasting the long run growth of the economy, the trustees assume that immigration will level off. In a dynamic system, anything that levels off eventually becomes small relative to the rest of the economy, as that continues to grow.
But for Professor Robert Gordon of Northwestern University, immigration is "the wild card" in Social Security forecasts. His forecast of immigration-which assumes that the rate of immigration will eventually settle down at about half of one percent of population-is much more sanguine about the prospects of Social Security than the trustees'.
In fact, even today, immigration is proving very important for Social Security, but not entirely for reasons we should feel comfortable with. The New York Times reports that as much as $50-$60 billion in wages are subject to Social Security taxation without generating claims for anyone. That is because the Social Security numbers connected to these earnings are bogus, created to permit illegal immigrants to seek jobs. Something like $6 billion in revenues are flowing into the system each year into accounts that do not exist.
Illegal immigrants may be providing the rest of us with a free ride through their payroll taxes, but legal immigrants, too, are vital to sustain the growth of the labor force in the future.
Looking beyond the confines of Social Security, without massive immigration, the United States could not have become a great and prosperous country. And immigration or migration more generally, continues to be one of the great hopes, not only of our country but of the world.
Last year, at a conference in St. Petersburg, Russia on globalization, an American observer was surprised by the uniformly bleak view the Russian participants painted of migration and multiculturalism. In the eyes of the Russians, even young scholars of sociology, every effort to blend people from different cultures was a dismal failure, producing nothing but misunderstanding and conflict.
Yet these same Russian academics were resentful of the success of the American software industry. "Those people are not even Americans," they said, "they are Russians and Chinese."
"Well yes," the American observer noted, "they are Russian-Americans and Chinese-Americans and Indian-Americans and Italian-Americans and Jewish-Americans. But they did not come to the United States because they were kidnapped. They came because there are opportunities in the United States. You could do the same thing in St. Petersburg, if you were more welcoming."
As people move around the world more quickly and cheaply, migrants are gaining more income, more education, more years of life, and more opportunity to realize their potential. Notions of cultural purity and xenophobic nationalism daily are becoming more discordant with reality.
Immigration can continue to lift the future prospects of Social Security even as it lifts the life chances of enterprising people throughout the world.
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