Illegal Immigrants Are Bolstering Social Security
Thu Apr 7, 2005 15:49


Illegal Immigrants Are Bolstering Social Security with Billions
By Eduardo Porter
The New York Times

Tuesday 05 April 2005

Stockton, Calif. - Since illegally crossing the Mexican border into the United States six years ago, Ángel Martínez has done backbreaking work, harvesting asparagus, pruning grapevines and picking the ripe fruit. More recently, he has also washed trucks, often working as much as 70 hours a week, earning $8.50 to $12.75 an hour.

Not surprisingly, Mr. Martínez, 28, has not given much thought to Social Security's long-term financial problems. But Mr. Martínez - who comes from the state of Oaxaca in southern Mexico and hiked for two days through the desert to enter the United States near Tecate, some 20 miles east of Tijuana - contributes more than most Americans to the solvency of the nation's public retirement system.

Last year, Mr. Martínez paid about $2,000 toward Social Security and $450 for Medicare through payroll taxes withheld from his wages. Yet unlike most Americans, who will receive some form of a public pension in retirement and will be eligible for Medicare as soon as they turn 65, Mr. Martínez is not entitled to benefits.

He belongs to a big club. As the debate over Social Security heats up, the estimated seven million or so illegal immigrant workers in the United States are now providing the system with a subsidy of as much as $7 billion a year.

While it has been evident for years that illegal immigrants pay a variety of taxes, the extent of their contributions to Social Security is striking: the money added up to about 10 percent of last year's surplus - the difference between what the system currently receives in payroll taxes and what it doles out in pension benefits. Moreover, the money paid by illegal workers and their employers is factored into all the Social Security Administration's projections.

Illegal immigration, Marcelo Suárez-Orozco, co-director of immigration studies at New York University, noted sardonically, could provide "the fastest way to shore up the long-term finances of Social Security."

It is impossible to know exactly how many illegal immigrant workers pay taxes. But according to specialists, most of them do. Since 1986, when the Immigration Reform and Control Act set penalties for employers who knowingly hire illegal immigrants, most such workers have been forced to buy fake ID's to get a job.

Currently available for about $150 on street corners in just about any immigrant neighborhood in California, a typical fake ID package includes a green card and a Social Security card. It provides cover for employers, who, if asked, can plausibly assert that they believe all their workers are legal. It also means that workers must be paid by the book - with payroll tax deductions.

IRCA, as the immigration act is known, did little to deter employers from hiring illegal immigrants or to discourage them from working. But for Social Security's finances, it was a great piece of legislation.

Starting in the late 1980's, the Social Security Administration received a flood of W-2 earnings reports with incorrect - sometimes simply fictitious - Social Security numbers. It stashed them in what it calls the "earnings suspense file" in the hope that someday it would figure out whom they belonged to.

The file has been mushrooming ever since: $189 billion worth of wages ended up recorded in the suspense file over the 1990's, two and a half times the amount of the 1980's.

In the current decade, the file is growing, on average, by more than $50 billion a year, generating $6 billion to $7 billion in Social Security tax revenue and about $1.5 billion in Medicare taxes.

In 2002 alone, the last year with figures released by the Social Security Administration, nine million W-2's with incorrect Social Security numbers landed in the suspense file, accounting for $56 billion in earnings, or about 1.5 percent of total reported wages.

Social Security officials do not know what fraction of the suspense file corresponds to the earnings of illegal immigrants. But they suspect that the portion is significant.

"Our assumption is that about three-quarters of other-than-legal immigrants pay payroll taxes," said Stephen C. Goss, Social Security's chief actuary, using the agency's term for illegal immigration.

Other researchers say illegal immigrants are the main contributors to the suspense file. "Illegal immigrants account for the vast majority of the suspense file," said Nick Theodore, the director of the Center for Urban Economic Development at the University of Illinois at Chicago. "Especially its growth over the 1990's, as more and more undocumented immigrants entered the work force."

Using data from the Census Bureau's current population survey, Steven Camarota, director of research at the Center for Immigration Studies, an advocacy group in Washington that favors more limits on immigration, estimated that 3.8 million households headed by illegal immigrants generated $6.4 billion in Social Security taxes in 2002.

A comparative handful of former illegal immigrant workers who have obtained legal residence have been able to accredit their previous earnings to their new legal Social Security numbers. Mr. Camarota is among those opposed to granting a broad amnesty to illegal immigrants, arguing that, among other things, they might claim Social Security benefits and put further financial stress on the system.

The mismatched W-2's fit like a glove on illegal immigrants' known geographic distribution and the patchwork of jobs they typically hold. An audit found that more than half of the 100 employers filing the most earnings reports with false Social Security numbers from 1997 through 2001 came from just three states: California, Texas and Illinois. According to an analysis by the Government Accountability Office, about 17 percent of the businesses with inaccurate W-2's were restaurants, 10 percent were construction companies and 7 percent were farm operations.

Most immigration helps Social Security's finances, because new immigrants tend to be of working age and contribute more than they take from the system. A simulation by Social Security's actuaries found that if net immigration ran at 1.3 million a year instead of the 900,000 in their central assumption, the system's 75-year funding gap would narrow to 1.67 percent of total payroll, from 1.92 percent - savings that come out to half a trillion dollars, valued in today's money.

Illegal immigrants help even more because they will never collect benefits. According to Mr. Goss, without the flow of payroll taxes from wages in the suspense file, the system's long-term funding hole over 75 years would be 10 percent deeper.

Yet to immigrants, the lack of retirement benefits is just part of the package of hardship they took on when they decided to make the trek north. Tying vines in a vineyard some 30 miles north of Stockton, Florencio Tapia, 20, from Guerrero, along Mexico's Pacific coast, has no idea what the money being withheld from his paycheck is for. "I haven't asked," Mr. Tapia said.

For illegal immigrants, Social Security numbers are simply a tool needed to work on this side of the border. Retirement does not enter the picture.

"There will be a moment when I won't be able to continue working," Mr. Martínez acknowledges. "But that's many years off."

Mario Avalos, a naturalized Nicaraguan immigrant who prepares income tax returns for many workers in the area, including immigrants without legal papers, observes that many older workers return home to Mexico. "Among my clients," he said, "I can't recall anybody over 60 without papers."

No doubt most illegal immigrants would prefer to avoid Social Security altogether. As part of its efforts to properly assign the growing pile of unassigned wages, Social Security sends about 130,000 letters a year to employers with large numbers of mismatched pay statements.

Though not an intended consequence of these so-called no-match letters, in many cases employers who get them dismiss the workers affected. Or the workers - fearing that immigration authorities might be on their trail - just leave.

Last February, for instance, discrepancies in Social Security numbers put an end to the job of Minerva Ortega, 25, from Zacatecas, in northern Mexico, who worked in the cheese department at a warehouse for Mike Campbell & Associates, a distributor for Trader Joe's, a popular discount food retailer with a large operation in California.

The company asked dozens of workers to prove that they had cleared up or were in the process of clearing up the "discrepancy between the information on our payroll related to your employment and the S.S.A.'s records." Most could not.

Ms. Ortega said about 150 workers lost their jobs. In a statement, Mike Campbell said that it did not fire any of the workers, but Robert Camarena, a company official, acknowledged that many left.

Ms. Ortega is now looking for work again. She does not want to go back to the fields, so she is holding out for a better-paid factory job. Whatever work she finds, though, she intends to go on the payroll with the same Social Security number she has now, a number that will not jibe with federal records.

With this number, she will continue paying taxes. Last year she paid about $1,200 in Social Security taxes, matched by her employer, on an income of $19,000.

She will never see the money again, she realizes, but at least she will have a job in the United States.

"I don't pay much attention," Ms. Ortega said. "I know I don't get any benefit."

Go to Original

In Ariz., 'Minutemen' Start Border Patrols
By Amy Argetsinger
The Washington Post

Tuesday 05 April 2005

Volunteers crusade to stop illegal crossings.

Bisbee, Ariz. -- Penny Magnotto and Gayle Nyberg stood at their post on a forbidding stretch of desert road, staring down the seven strands of barbed wire separating them from Mexico.

The Southern California women had risen at dawn in their makeshift quarters at a nearly defunct Bible college to join scores of other volunteers from around the country on the first official day of a highly symbolic crusade. Their mission: to monitor the flow of illegal immigrants crossing into the United States and to do their legal best to stop it. So they stood ready -- binoculars, walkie-talkie, sunblock, water -- and gazed at the motionless landscape of sand and brush.

"If we see any immigrants, we'll first radio someone, and then call Border Patrol," said Nyberg, 56, in a camouflage jacket.

"We can ask them if they'll wait," explained Magnotto, 61, in a red, white and blue windbreaker, "but we can't touch them."

But had they seen anyone on this stretch of border, the illegal entry point for hundreds of thousands of immigrants a year?

Well, no, they said. Not yet.

With the start of the Minuteman Project -- a combination "civilian patrol" and immigration protest -- officials with the U.S. Border Patrol were reporting a sharp drop in the number of illegal crossers apprehended along a stretch of border said to be the most porous in the nation.

Organizers of the effort -- decried by President Bush as "vigilante" activity and by Mexican President Vicente Fox as an "immigrant hunter" -- claimed an early victory. "We've completely locked down the border," said Larry Morgan, a volunteer from Long Beach, Calif. Sightings of 24 potential crossers were reported to authorities, Minuteman organizers said.

But border officials and others said the decrease probably had less to do with Minuteman vigilance than a military patrolling effort on the Mexican side of the border -- not to mention the boisterous protesters, counter-protesters and satellite-equipped TV trucks gathered on the usually desolate dirt road between Douglas and Naco, Ariz.

"Migrants aren't crossing here, that's the effect," said Scott Kerr, 29, a worker with Christian Peacemaker Teams, a relief group that leaves water and food for immigrants trying to cross the treacherous, dry terrain. "Some days we'll encounter hundreds. Today we didn't see any."

The full impact of the Minuteman Project remained elusive Monday. Organizers said more than 400 people had arrived over the weekend for orientation sessions and rallies, the first wave of the 1,300 volunteers they expect to participate in some part of the month-long desert vigil.

Thus far, there were no immediate signs of the white supremacist gangs or other troublemaking groups that local officials feared would be drawn by the event, and no reports of clashes or violations.

But the event also seemed much smaller than advertised. Organizers had promised to place teams of monitors at quarter-mile or half-mile intervals along a 23-mile length of border. But by midmorning Monday, all of the visible activity was clustered around a two-mile stretch, where a dozen or so teams were stationed. Organizers said others were as far as three miles back from the border or stationed in canyons, away from the dirt road.

Even as they gazed out at the border with binoculars, many of the Minutemen acknowledged that making a point was their true purpose.

"I'm a right-wing conservative Bush supporter, and I think Bush is wrong on immigration," Morgan said, citing the president's support of a guest-worker program that would allow more Mexicans to work legally in the United States on a temporary basis.

Morgan, 60, a general contractor, stood on a hillside with two other men, monitoring the barbed-wire fence and sharing grievances about border crossers. They complained about provisions in some states to issue driver's licenses or in-state tuition rates to illegal immigrants. Darrel Wood, 44, a fiber-optics engineer, said eight of the 10 most-wanted criminals in his home state of Utah are illegal immigrants; Morgan blamed them for prison overcrowding and California's fiscal crisis.

"It's affecting my children at school," Wood said. "They're suffering, trying to get these immigrant kids up to speed."

In the five days since Minuteman volunteers began arriving, the Border Patrol had apprehended far fewer immigrants than usual -- about 100 a day, down from the usual 300, said Andy Adame, a Tucson-based spokesman for the federal agency.

But Adame said he believed the decrease was linked to an operation by Mexican officials on the other side of the border. "We don't attribute that to the civilians patrolling the desert," he said. Minuteman organizers said they have directed their volunteers to call Border Patrol if they spot suspicious activity, rather than confronting the people themselves. Adame said he could not say how many calls they had received from Minutemen, if any; he said there had been no rise in the overall number of calls they receive from citizens.

Adame also reiterated the Border Patrol's objections to the program, noting that the volunteers were setting off sensors placed along the border and blurring the footprints agents often follow in search of illegal immigrants.

"They're tromping all over the place making our job a little more difficult," he said. "It's not a major crisis, but it is detrimental to our operations."

Officials with the Cochise County Sheriff's Department reported no incidents connected to the Minuteman effort. There were, however, anecdotal accounts of testy exchanges between the Minutemen and representatives of the various organizations that oppose the program.

Kathryn Ferguson, a Tucson documentary filmmaker who volunteered as a "legal observer" with the Arizona chapter of the American Civil Liberties Union, reported encounters with "a lot of verbally aggressive people" who called her a terrorist or communist.


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