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Thursday, March 28, 2013

Immigration: A Solution for Social Security Insolvency?

Madhulika Vulimiri

“As a result of globalization, labor markets are no longer defined by our borders.” When Lisa Lynch of the Heller School of Social Policy and Management made this statement in the opening keynote of the National Academy of Social Insurance’s 25thannual policy conference,  Medicare and Social Security in a Time of Budget Austerity, she was alluding to the increasing role that immigration plays both in our workforce and in our shifting policies around education, healthcare, and Social Security. I was interested to see what the distinguished speakers would say about the politically-charged role of immigration on Social Security, particularly in a time of budget austerity.

The immigration debate often presents a one-sided message, focusing primarily on the financial costs of illegal immigration to the American economy. In the context of Social Security, undocumented immigrants are depicted as unskilled workers who receive benefits that disproportionately exceed their contributions, without considering that, without a Social Security number, they will never collect benefits. Although this image suggests that undocumented immigrants are unfairly ‘taking out of the system,’ the Center on Budget and Policy Priorities estimates that undocumented immigrants actually improved Social Security’s net cash flow by $12 billion from payroll tax revenues in 2007. Thus, the mainstream American message fails to address the dynamic ways in which undocumented immigrants contribute to our national economy.

The conference included a panel addressing this very issue entitled, “Just the Facts, Ma’am: Demographics, Democracy, and the Public Budget,” with speakers Richard Jackson from Center for Strategic and International Studies and Vanessa Cárdenas from Center for American Progress.

Discussion among the panelists addressed the benefits of having a growing immigrant population on our national economy, a stance that is usually not a part of the conversation. Cárdenas suggested that immigration “provides the U.S. with a competitive advantage,” with immigrants making up not only a large part of the informal economy, but also boosting the economy by starting new businesses, earning patents, and drawing in sales from high-tech companies.

It is critical to consider undocumented immigrants’ contributions to Social Security in the context of other demographic trends. The panelists cited the analysis of journalist Ron Brownstein, who coined the term “brown versus gray” to describe the demographic paradox in which young immigrants, legal and illegal, are paying into a social insurance system that supports older, white Americans. This phenomenon is especially striking, as Brownstein suggests that these two demographic groups have contrasting ideas about the role that government should play in the interrelated issues of education, healthcare, and welfare. As we move forward with policy decisions surrounding Social Security, we will have to consider the interests of older white Americans, who have already paid into the system, as well as those of young immigrants, who are just now beginning to pay into the system and want government to have an increased role in providing public benefits.

The 2012 presidential election, characterized by a larger-than-usual Latino voter turnout, showed the importance for policymakers to focus on the interests of minority populations, especially Latinos. The U.S. will be a “minority majority” country by around 2040, with minorities projected to make up 83% of the workforce by 2050. Given these estimates, it is even more imperative to invest in these seemingly unrelated issues, which will inevitably influence the socioeconomic and health status of our growing immigrant population later in life, and have significant impact on our social insurance systems as a whole. Moreover, we must paint a more realistic narrative around immigrants - not as people who are only draining our country of its resources, but as individuals who are adding to the Social Security program through payroll taxes. As Lisa Lynch mentioned, “We must think about the interconnectedness of policy decisions.” It is imperative that we consider the how immigration will impact the sustainability of social insurance programs such as Social Security.


Madhulika Vulimiri is a junior from Morrisville, North Carolina studying Health Policy and Management at UNC Gillings School of Global Public Health. Locally, she has become interested in the changing healthcare needs of minority populations and how the Affordable Care Act will impact these communities. Her experiences at hospitals and clinics have fostered a strong belief that the healthcare system should be easy to navigate, regardless of one's socioeconomic, literacy, or health status.Madhulika was one of six students and young professionals awarded a scholarship to attend NASI’s 25th annual policy research conference January 31- February 1, 2013, in Washington, DC.

Posted on March 28, 2013  |  Write the first comment
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