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April 22, 2011 09:31 PM UTC

State's undocumented immigrants help drive state's economy, pay tax share

  • 49 Comments
  • by: TheBell

(That “pop” was Kevin Lundberg’s head exploding – promoted by Colorado Pols)

New research shows that undocumented immigrants in Colorado are a significant contributor to the state’s economy and that undocumented immigrants contribute as much in sales, property and income taxes as they cost in K-12 education and other mandated services.

The population of undocumented immigrants in Colorado has declined in recent years, tracking the downturn in the economy, but the debate over immigration has only grown more heated. Some of the heat generated in that debate comes from claims that undocumented immigrants take jobs and overburden state resources.

Research conducted by the Bell Policy Center and the Colorado Center on Law and Policy finds that:

• Undocumented immigrants account for 5 percent of the state’s workforce and 3 percent of state personal income, and these workers produce 7 percent of Colorado’s economic output, according to Undocumented immigrant workers in Colorado play an important role in the state’s economy, by the Colorado Center on Law and Policy.

• Economic activity generated by undocumented immigrant households accounts for an additional 91,000 jobs statewide, $4.7 billion in personal income and $15 billion in industry output.

• Undocumented immigrants paid an estimated $167.5 million in income, property and sales taxes in 2010, which covered the cost of K-12 education, emergency medical care and jail and prison incarceration, according Colorado’s undocumented workers: What they pay, what they cost in taxes, by the Bell Policy Center. The cost of those federally mandated services is $166.6 million.

The Bell Policy Center conducted similar research in 2006 and found undocumented immigrant households paid $159 million to $194 million in total taxes, while the cost for mandated services was about $225 million. Since 2006, the average income of undocumented households has risen, generating more tax dollars for the state. Also, the number of undocumented immigrants, especially the number of school-age children, has declined in the past five years.

“This analysis clearly shows that claims that undocumented immigrants are the cause of our budget problems are way off base,” said Rich Jones, director of policy and research at the Bell Policy Center. “They are not eligible for and do not receive most government services. In fact, they pay enough in taxes to cover the costs of providing federally mandated services to them.”

“Labor by undocumented immigrants ripples through all parts of Colorado’s economy,” said Alec Harris, a policy analyst for the Colorado Center on Law and Policy. “Like all groups of workers, undocumented immigrant workers spend their earnings, which supports local businesses, enabling those companies to hire more workers. It’s a positive cycle that stimulates the state’s economy.”

Other findings:

• In Colorado, for every job held by an undocumented immigrant, 0.8 jobs are created.

• Undocumented immigrants work mostly in construction, services, leisure and hospitality and manufacturing.

• Colorado had an estimated 15,763 undocumented students between 5 and 17 years old; funding for them represents less than 2 percent of total state and local K-12 spending.

• Colorado spent $26.5 million to provide emergency medical care to non-citizens in 2010-11 (not all of whom were undocumented immigrants). That total represents just over 0.5 percent of the state budget for health care.

• The net cost of holding undocumented immigrants in jails and prisons in Colorado was $32.5 million in 2009, or about 4.2 percent of the state budget for prisons.

• Undocumented immigrants live in our communities, and like all Colorado consumers pay sales taxes on the goods they buy.  In 2010, this amounted to $114.6 million.

• Undocumented immigrants also paid $30.9 million in property taxes, mostly as part of their rent payments.

• Undocumented immigrants have $30.9 million in income taxes withheld from paychecks.

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49 thoughts on “State’s undocumented immigrants help drive state’s economy, pay tax share”

  1. I was under the impression that it’s not OK to ask, so I’m really asking. Frankly, the number surprises me. In a good way.

    Thanks for the report.

    @COPols – How would you know?

    1. You are correct, schools cannot ask about their students’ immigration status. The number we used to calculate the costs of K-12 education is an estimate of the number of undocumented students, not an actual count.

      To calculate the cost of K-12 education, we estimated the number of undocumented immigrants living in Colorado aged 5-17. We assumed all were attending school and used the statewide average per-pupil funding amount to calculate total costs.

      We used information from the Pew Hispanic Center for estimates of the total number of undocumented immigrants living in Colorado and the ages of undocumented immigrants nationally.  

      Obviously, if not all of the undocumented immigrants aged 5-17 are in school, the actual costs would be lower. Conversely, if there are undocumented immigrants aged 18-19 still in school, the actual costs would be higher than our estimate.

      The methodology we used to calculate all of the costs and taxes paid is described in the report — clearly, thrilling reading and a strong incentive to dig into the report’s details.

  2. are also paying into social security.  I still believe illegal should mean illegal and instead of ignoring bad law we should change the law to something that we can live with and enforce it .  But illegals don’t come here to collect welfare.  They come here to work.  

    Rick Santorum says the reason social security is in trouble is because of abortions.  Fewer babies growing up to be workers paying into the system. People like Santorum also don’t want safe, affordable. effective birth control to be widely available, for anyone outside their own class, that is. I don’t see many affluent conservative Rs with huge families.  Could this be for the same reason? They want lower income moms to be baby farms to provide cheap labor and social security support?

    Instead of going back to 6+ child families as a norm, why not just move some young people, already taking up space on the planet, in? Soon history’s biggest generation, the boomers, are going to need plenty of younger workers to keep social security funded and most of us didn’t have those great big families.  Down the road,  we’ll be dying off naturally.  In the meantime immigration sounds like a good solution. Japan might want to look into it, for that matter, at the rate they’re shrinking.

    Sounds much better than the Santorum model of forcing women to produce more babies than they want or feel they can afford to care for, at any rate.  

  5. Why is it that there are minimal controls on money and finance flowing overseas or back, yet there are huge controls on labor?

    And what about retiring to Costa Rica?

    I just wanted to back up to a larger picture for a moment.

    1. Like what? Which?  

      I think they’re all gone now.

      Any consumer with hispeed internet could trade currencies online in London, SIngapore, NY, CHicago etc and so on.

      I know PayPal was invented according to Thiel so people could liquidate money from one country to another – but I’m not sure why anyone in the 1st world would need to use it that way

  6. It provides a steady source of cheap labor for employers, thus boosting their profits. They keep a lot of teachers and other government workers employed, teaching them ESL, providing free lunches and k-12 education, subsidized child care, free medical care, and other serices.  I can get someone to undercut legal workers when I need my roof replaced, some land scaping, or concrete work. It is such an economic boom to the state that we ought to double or triple the number of illegal immigrants.  I’m sure the state would immediately be rid of it’s budget problems and we would have endless budget surpleses. By gosh, if we continue on with illegal immigration, we could aspire to being as great a state as California.  Bring it on.  

    2. And just think, if immigrants would only accept larger paychecks, say around minimum wage, how much greater their spending into the economy and government coffers would be. If only so many weren’t standing at the border glaring at us and refusing to cross over until we allow them to work for even lower wages.

      By gosh, thenonthinker, you are on to something here.

      If they’d allow us to pay them more, it would even lower demand for public medical and social services. And just think, if there were more jobs available, why…it seems to go on and on exponentially. The blue sky above this lovely city on the hill could go on forever.

      But wait: There’s a fly in the soothing ointment of my thinking, thenonthinker: If wages were higher and America had more work available out there, some pesky Americans would start getting back to work. And Americans would start supporting more our economy and our governmental budgets, and Americans, too, would stop demanding so many public medical and social services. And, dammit, all those immigrants would run into competition for our American largesse. And pretty soon, we’d be surrounded by Americans working, and Americans paying taxes, and Americans in the checkout line ahead of us at the grocery story. Well, that screws everything.

      That reminds me, I have to go over to Avanza and pick up a half-pound of mixed seafood (about a buck-and-a-half, including octopus and shrimp), some ancho chiles, a round of queso quesadilla, Mexican oregano and some crema menonita. I’m in the mood for some chiles rellenos del sabor de Baja California, by gosh. It’s only been available here since those wonderful immigrants got here. Gotta go.

  7. their declining number has tracked the downturn in the state’s economy.  I’m sure this is true in other states with large immigrant populations, as well.

    I’ve had a suspicion for a long time (and I’ve heard immigrant advocates say) that the economic collapse was related, in part, to the huge and abrupt drop in immigrant workers, as a result of punitive legislation passed in Colorado and elsewhere.

    The massive shift to off-shore labor markets by American producers seems to lend credence to this belief.

    BC is correct that that the worker/retiree numbers don’t work on Social Security.

    1. If a million people concentrated in Western states stopped renting houses and moved back to Mexico, it is easy to see that this would have an impact on rental vacancies and house prices. At the moment the US economy has a huge overhang of excess housing, that will be used up steadily due to birth rates, immigration and young people starting households.

      Again, an obvious example that more people equals more housing absorption, more tax evenue, more jobs, and more growth in the economy.

      1. More people equals more environmental destruction, more overfarming, more overuse of scarce water resources (especially in the west), more greenhouse emissions, more wealth concentrated in the hands of the lucky 1%…

        It’s not strictly an immigration problem.  But as long as we keep thinking that we need more people to keep our economy going, we’re on the road to disaster.

        1. The subject was how immigrants contribute to the economy to.

          Population size, environment, etc are valid topics, but different from the fact that people exist and contribute to the economy. Are trying to get to a discussion about euthanasia, birth control, demographics?

          1. Here is the thread played out:

            Bell Policy: Immigrants contribute to the economy.

            MetaData: Example of how they contribute to the economy

            G.Puviczek: People wreck havok on the environment.

            MetaData: OT! You are not addressing the interesting discussion of how immigrants contribute to the economy.

            You want to talk about the impact of people on the environment, try doing that in another post.

            1. Bell Policy: “immigrants contribute”

              MetaData: “by contributing to growth”

              Me: “growth is not always good”

              MetaData: “But, but, but, immigration!”

              I probably should start my own thread, but it was not a hijack, the comment was directly related to its antecedents.

        2.  

          wealth concentrated in the hands of the lucky 1%…

          I didn’t realize the wealthy are all lottery winners. I don’t think luck has that much to do with the upward mobility of money lately.

          and this

          But as long as we keep thinking that we need more people to keep our economy going,

          WTF?  Do you want it to GROW…or just go…? I don’t see how it grows without more people… and how do you get richer without growth?

          Do tell.  

          1. They are lucky.  Are you asserting that a billionaire worked a thousand times harder than a millionaire?  Or that they worked a million (or more!) times harder than a trash picker in the streets of Mumbai?

            Sure, they worked hard.  So do most of us.  But the thing that propelled them to that top 1% by and large is luck.  That, and the leverage of using their money to protect themselves and their way of life.

            As far as economic growth goes: I would prefer a sustainable economy, one which my children and grandchildren have as much of a chance at a decent life as I have had.  Our current “growth” economy is a cancer approaching its terminal stages.  How many more doublings of population can the Earth sustain?  How many more cities the size of Denver do we have the water for in Colorado?

            1. the leverage of using their money to protect themselves and their way of life.

              I would tend to believe this is far more to the point than “luck”, as in…millions for lobbyists, not a penny for the poor.

  8. Oh, I get it.  If we have more people we can build more houses, log more forests, build more dams, mine more mountain tops, increase fracking, pave over more farms.  And, if we have a lot of workers, we can pay less wages, eliminate costly benefits like health insurance and benefits, cut out unnecessary regulations like OSHA, child labor laws, environmental rules, etc.

    This would lead to a larger economy.  Never mind that it would create even more billionaires and a larger class of impoverished workers.  Who cares about quality of life, income equality, the middle class, etc.  It’s all about the GDP.

    1. Over on G Puviczek’s thread about how people cause environmental destruction. You could list all the different ways more population equals more environmental problems. That might be a very interesting post, especially if you get to the place where you explain how to reduce population.

      Or, start your own thread on reducing the GDP or, creating fewer billionaires, or kids today don’t care about quality of life, or err… I’m not sure what point you are actually trying to make.

    2. Nowhere in this diary or in any of the comments (except that sarcastic s.o.b. GalapagoLarry) will you find (if you read) advocacy for more immigration or more people. The point is, those that are already here seem to be paying their own way. Folks like you guys who get itchy rashes on your taints at the thought of all those newcomers parasatising our by-gone perfect way of life should take heart. You can relax. Now breathe deeply and write a nice note to Mr. Tancredo urging him to run for Pres.

        1. I always thought that arrogant AH wanted to run for Pres. He just didn’t get no respect, poor guy. Thank luck for Dottie. At least someone in the family had some sense.

      1. How Mark? I mean it – prove it

        In 2008, I ran for State House as a very pro immigrant candidate (pro scholarships, pro guest worker, pro pathway to citizenship, etc) – and I never ran away from any of those stances in running for State Treasurer – so how would you have been “bamboozled”??? Please tell us all

        You can call me a pro-immigrant loving, hippie liberal, but I refuse to be called a liar – when I ran for State Treasurer, people knew EXACTLY where I stood on the issues (which is probably why I didn’t make the GOP ballot)

          2. going to hear from him, my friend. It is good to see you posting again. I hope you and your family have been well.

            I, among others I am sure, would be interested in a diary from you telling us in what you are currently involved.

            Take care and travel safely.  

  10. 1) It uses the “average” cost per pupil for calculating K-12 education cost instead of a cost that more accurately reflects the higher cost of educating illegal immigrants; things like ESL, free lunches, “at risk” student funding, etc.

    2)  It doesn’t count the cost of educating the “legal” children of illegal immigrants who wouldn’t be here if there parents weren’t here.  There are probabably twice as many anchor baby children of illegal immigrants then there are illegal immigrant children of illegal immigrants.  Counting these costs would dramatically raise the cost of illegal immigration.

    The Bell student excludes these costs, while other studies include them.  I would say the Bell study is flawed and dramatically understates the cost of k-12 education resulting from illegal immigrants who have children here.  This is a real cost for taxpayers.

    Spin it anyway you want, illegal immigration is costly to Colorado workers whose wages are pushed down, to unemployed legal workers who compete against illegal workers, and for taxpayers funding the high costs for our K-12 education system and medical care.  The taxpayers and citizens realize this and the Bell study fools nobodoy.

    The fact that the Bell study thinks a “bigger” economy based on an illegal workforce being paid low wages is a good thing, speaks volumnes about what the priorities of the Bell institute are.  They care nothing about legal workers, wage inequality, low wages, unemployment for legal workers – just that the “economy” is bigger.  They sound like good old “trickle down economy” Republicans.

    1. This is a terribly flawed response, Thinker

      Your point 1 – you are “assuming” that most school lunch funding and “at risk” funding (whatever that is?) goes directly to benefit undocumented immigrants?

      You’re making a VERY dangerous statement – Realist, I spent over a year teaching public high school in Los Angeles as a tyro-teacher and there is no evidence behind the statements you are saying above

      Second, regarding ESL – don’t we want everyone learning English?? To me, this is a cost that should be encouraged by all, not criticized

      Third and MOST IMPORTANTLY – ESL, School Lunch, etc, are all things that are factored into “per pupil costs” because the budgetary expenditure that is divided by the said number of “pupils” includes the costs of ESL, school lunch, and all other school programs

      Regarding Point 2 – it doesn’t count the costs of educating “legal children” of undocumented immigrants because…. (drum roll) THOSE KIDS ARE ALREADY LEGAL UNDER THE CONSTITUTION!!!!!

      Realist – your points are way off – the study stands and is of terrific quality

      1. The Bell institute study claims that illegal immigrants are paying as much in taxes as they are costing.

        Then they entirely exclude the cost of educating their anchor baby children. Really? You mean it doesn’t cost taxpayers anything to educate their legal children?

        The fact is taxpayers wouldn’t have to be educating those children if the illegal immigrant parents weren’t here.  Excluding this from the “cost” side of the equation is like excluding the Iraq War from the federal budget.

        And, why does Bell use the average state wide cost per pupil figure instead of, say, the Denver cost per pupil or other school districts which have a higher percentage of illegal immigrants, more free students in the free luch programs, and more at-risk students then, say Cherry Creek or Fort Collins? After all, school funding is allocated based on formulas which take these things into account – they don’t just spread money to school districts just based on how many pupils they have.  It seems to me that the Bell study is either flawed or they intentionally wanted to understate the costs.

        You were running for State Treasurer and don’t recognize these distinctions?

        1. According to the Constitution there are only citizens.  And there are no illegal children.  Only children.

          Talking point fail.

          Get a clue.  You can start by reading the 14th Amendment.

        2. I’ve said it before and I’ll say it again – “legal” children are not “anchor babies” – they’re LEGAL – get it straight

          Second – no – again, you’re wrong – there are undocumented immigrants all over the state – if you were smart, you would check police records to see that arrests based on undocumented status are all over Colorado, not just “Denver”

          Seriously – you’re already making assumptions that only a Tea Party group could take seriously – why don’t you actually BACK UP your assumptions with proof (you can’t)  

    2. Where do you get your “probably”?

      And where do you get your understanding that the Bell

      …thinks a “bigger” economy based on an illegal workforce being paid low wages is a good thing…?

      This study merely proposes that illegal immigrants aren’t the drag on the economy and on public budgets they’ve been accused of being. I really don’t know what the Bell “cares about” except the wellbeing of kids and families, but I imagine it would “probably” be comfortable with an economy based on high wages for all workers, since that would benefit all families.

      You got a problem with Americans competing for low-wage jobs? Champion high-wage jobs. Champion workers’ ability to negotiate better pay. You got a problem with growth? Champion getting religions our of our bedrooms. Champion education about the economic consequenses of youthful lust.

      PS. You really ought to change your moniker to “thefeeler” or “thereactor” or something more reflective of your argumentation. How about “thereader”? Try that one out, then live up to it.

  11. Using a stolen SS # is not indicative of paying tax. Many illegals are independent contractors who escape all tax burdens other than income tax on profit, after expenses.

    Most stolen SS# result in a refund check rather than payment.

    Independent contracts also avoid workers comp and healthcare expenses. If they do get hurt at work or home, they simply show up at the hospital and receive free treatment.

    The Bell is so very wrong as usual.

      3. Even if somebody evades paying income tax, they still pay sales tax and property tax (directly or indirectly).

        Regardless, you’re picking nits. What the Bell showed was that expenses and revenues are roughly equal. A few contractors working under the table isn’t going to change that.  

    1. Friedman of the totally discredited Chicago Religion of monetary theory? Ideologies are comforting, but when they don’t work (Please reference the 2007-08 Bush economic crash.) they should be abandoned. Friedman died just in time to avoid seeing his reputation reduced to an askerisk under “Reaganomics”.

      Nice mini-nonthought, though.

  13. I am wondering how Bell Policy Institute came up with so precise and exact numbers out of ‘undocumented’ segment of our state population. They should come up with their methodology and margins of errors.

    2ndly and importantly do those numbers give us ground to ignore and forgive their illegal act of being present here and their insistency to be here making fool of us and law of land, at the cost of law obedient citizen and aliens?

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