It’s hard to imagine a politician with lousier timing than New Jersey governor Jon Corzine. The day before the execution-style killing of three Newark students by several illegal immigrants—at least one sporting a long rap sheet—Corzine formed a commission to study ways of providing immigrants with greater access to public services. In announcing the panel, the governor said nothing about the state’s estimated 400,000 illegal immigrants, and the panel included no experts on law enforcement or national security who might recommend how the state could better protect itself in an era of porous national borders. In the wake of the killings, critics have called for Corzine to rethink his immigration panel with the state’s security in mind. That’s not a bad idea. But while he’s at it, Corzine should keep the state’s budget and economy in mind, too. Immigration is already a costly burden to New Jerseyans, and there’s little reason to make that burden even greater.

The Garden State is in a good position to understand the fiscal impact of immigration on its citizens. Back in the mid-1990s, Congress commissioned a project, under the auspices of the National Academy of Science, to examine immigration’s bottom line. As part of the project, nonpartisan teams of some of the country’s leading economists conducted two groundbreaking studies—one on New Jersey and another on California—that assessed immigrants’ contributions to the public good in terms of the taxes they paid, and their cost in terms of the government services they consumed.

Both studies found that immigrants used government services at a greater rate than native-born residents did. The New Jersey study found, for instance, that the typical immigrant family received about $4,044 annually in government services, about 11 percent higher than the average native-born family. At the same time, immigrant households paid about 8 percent less in taxes. The net result was that “the average native household generated an annual fiscal surplus of $232” to government, while “the typical foreign household was a net burden of $1,484.” The gap was even wider in California, where immigrant households produced a net deficit of $3,463 each, because so much of that state’s recent immigration had been in the form of low-wage, low-skill workers.

Though the study did not distinguish between legal and illegal immigrants, it did break down foreign-born households by the regions of the world from which they had come. In both states, the study found the steepest deficit in Latin American households, which in New Jersey consumed 26 percent more in government expenditures than the average native-born family, but paid 38 percent less in taxes. By contrast, immigrant households in New Jersey that hailed from Europe or Canada actually consumed, on average, less in government services than the typical native-born family, and paid nearly as much in taxes.

Though the NAS study is nearly a decade old, it’s likely that, if anything, the negative fiscal impact of immigration has worsened in New Jersey. After all, Jersey’s foreign-born residents, who at the time of the study accounted for about 15 percent of the state’s overall population, now constitute nearly 20 percent of it. Moreover, the percentage of immigrants coming to the state from Latin American countries—those immigrants who, according to the NAS study, consume the most in government resources—is increasing.

These numbers remind us of how immigration has changed over the decades. During the so-called First Great Migration, which took place from roughly 1880 to 1925, America was an agrarian economy that was slowly becoming industrialized and urbanized. The immigrants of that era, though largely poor, had the skills to succeed in what was a much simpler job market. Those who couldn’t succeed didn’t have much government help to rely on; the public sector spent far less on social programs then, and many immigrants, after struggling here, simply returned home. In fact, scholars estimate that more than half of all immigrants during the First Great Migration eventually remigrated to their countries of origin.

Today, the American economy is far more complex, yet many of our current immigrants come here with little schooling. Harvard economist George Borjas estimates, for instance, that 63 percent of Mexican male immigrants lack a high school education. Not surprisingly, studies show that the economic gains of such low-skill, low-wage immigrants are slow to materialize, while their reliance on government services is growing. And in a society in which immigrants have a whole range of government services to rely on, remigration rates are much lower than they were in the early twentieth century. As the late economist Milton Friedman summed up the problem: “It’s just obvious that you can’t have free immigration and a welfare state.”

With its array of expensive government programs and services and a “don’t ask, don’t tell” policy toward illegals, New Jersey has become one of the country’s major immigration magnets, at great cost to its citizens, who already bear what is probably the highest state and local tax burden in the country. It makes little sense for Governor Corzine to seek ways to spend even more of the state’s money on services it can’t afford.


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next