Social Security's Untold Immigration Issue: Not Enough Immigration

Alberta Waelchi Sr.
Published Feb 9, 2024



Social Security is a topic that has been of great concern to retirees, primarily due to factors such as inflation and potential benefit cuts.

However, a recent survey by the Nationwide Retirement Institute has revealed that immigration is also emerging as a top issue among Americans.

While immigration has been a subject of much debate, the true problem lies in not having enough immigration. Contrary to popular belief, Social Security is facing a significant challenge due to a shortage of immigrants.


The Negative Perception

The media often portrays immigration in a negative light, particularly focusing on illegal immigrants crossing the southern border. This has sparked concerns about the strain on public services, especially when undocumented workers do not pay taxes.

However, a report by the nonprofit Center for Immigration Studies suggests that legal migration could present more problems for Social Security.


The Concerns Surrounding Legal Immigration

The Center for Immigration Studies argues that legal immigrants who arrive later in life could be "net drains" on the Social Security system. It also suggests that lower-earning legal immigrants might take more from Social Security than they contribute.

Although these concerns have been raised, they are not major issues for Social Security at present.


The Immigrant Contribution to Social Security

In reality, increased immigration has the potential to strengthen the solvency of the Social Security system.

A report from the Bipartisan Policy Center states that immigration adds to the number of new workers, thus increasing revenue for the system.

Because immigration typically occurs at younger ages, there is a greater number of workers contributing to Social Security before the number of beneficiaries increases.


Undocumented Immigrants and Taxes

The argument that undocumented immigrants are not contributing to Social Security due to their tax status is somewhat flawed.

The Bipartisan Policy Center highlights that all U.S. employers are required by law to verify the work authorization of new hires. Many undocumented immigrants use false Social Security numbers or someone else's number, resulting in their wages being subjected to FICA payroll taxes.

However, they are ineligible to receive Social Security benefits.


Addressing Social Security's Biggest Problem

While immigration has the potential to partially address Social Security's financial challenges, it is not a standalone solution. The trust funds of Social Security are projected to be depleted by 2034, according to the Congressional Budget Office.

Without reform, steep benefit cuts might be inevitable. The Bipartisan Policy Center's report emphasizes that decreasing immigration would only exacerbate the impending insolvency crisis.


Conclusion

It is essential to understand that the real issue with immigration and Social Security is not an overabundance of immigrants, but rather an insufficient number. With the trust funds running out of money, it is crucial to consider all avenues for enhancing the system's long-term sustainability.

While immigration is not a panacea, it can play a role in alleviating Social Security's financial woes if combined with other measures.

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