Net effects of immigration on Social Security
- Sonic1
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Net effects of immigration on Social Security
For those of you reliant on this form of socialism there is enough cash for 15 years. After that u gonna need a lot more meskins. From The Motley Fool, 0271572019 "Few, if any, social programs pack a punch for the American public quite like Social Security. This is a program that provides a benefit check to nearly 63 million people each month, 7 out of 10 of whom are retired workers. Of these retirees, 62% lean on their monthly payout to account for at least half of their income. In other words, without Social Security in place, we'd likely be staring down a serious elderly poverty problem.
Social Security's judgment day is rapidly approaching
Then again, it's also a program that's on thin ice. Beginning sometime in the very near future, Social Security is expected to expend more than it collects in revenue for the first time since 1982, the year prior to the Reagan administration passing the last major overhaul of the program.
What could cause such a reversal of fortune for Social Security? Part of the blame, through no fault of their own for simply being born, is that baby boomers are leaving the workforce at a faster rate than new workers can replace them, leading to a decline in the worker-to-beneficiary ratio. Other factors at fault include increased longevity over many decades, growing income inequality, and lower fertility rates.
If there are consolations here for existing and future beneficiaries, it's that the program is in no danger of going belly-up, and it does have almost $2.9 trillion in asset reserves built up since inception. The problem is that these asset reserves can only hold up for so long if Social Security is spending more than it's collecting each year. That's why the latest Trustees report has projected that the entirety of this excess capital will be exhausted 15 years from now, in 2034. Should Congress fail to amend the program in order to generate additional revenue, a sweeping cut to benefits of up to 21% may be needed to sustain payouts through 2092.
Immigration is a net positive for Social Security
However, the factors listed above aren't the only things influencing Social Security. Immigration tends to play a very large role as well. In fact, immigration and its impact on the program might be one of the most misunderstood aspects of Social Security.
When the Trustees release their annual report looking at the short-term (10-year) and long-term (75-year) outlook for Social Security, one of the key factors examined is the immigration rate. Immigration is itself a net positive for the Social Security program. That's because a majority of legal immigrants tend to be younger in age, meaning they're going to be a part of the American workforce for decades before retiring. These immigrating workers, and the payroll tax revenue they'll provide, are very much needed to help support payouts to current and future generations of retirees.
Meanwhile, undocumented immigrants aren't allowed to receive benefits since they have no legal pathway to receiving a Social Security number (SSN). That doesn't stop some undocumented workers from using a fake SSN or a friend's SSN to get a job, ultimately paying billions of dollars into the system annually without any chance to ever collect a red cent in return.
Though the immigration debate is contentious, there's little doubt that immigration is having a positive outcome on Social Security.
Related video: How to max your Social Security payout (provided by Money Talks News)
Quantifying the impact of immigration on Social Security
The bigger question, I believe, has always been just how much of an impact is immigration having on Social Security, in dollar terms. The Trustees report provides a roundabout answer to that question.
Each year, the Trustees report examines the 25-year, 50-year, and 75-year actuarial balance based on three levels of average annual net immigration. In the 2018 report, these were 952,000 persons, 1,272,000 persons, and 1,607,000 persons. Regardless of the time period (25, 50, or 75 years), the actuarial balance -- i.e., the amount Congress would need to raise the current 12.4% payroll tax rate today to fully cover the projected cash shortfall over a defined number of years (in this case 25, 50, or 75 years) -- decreases as average annual net immigration increases. Over the long run, the report notes that for every 100,000-person net increase in average annual immigration, the long-term actuarial deficit drops by about 0.08%. The opposite is true if net immigration declines over time.
To put this in an easier-to-understand context, the long-term (75-year) actuarial deficit in 2018 was 2.84%. This means that if the payroll tax were increased from 12.4% to 15.24% (2.84% higher), it would presumably eliminate the $13.2 trillion cash shortfall currently projected between 2034 and 2092. But if, for example, net immigration into the U.S. were doubled to roughly 2.5 million people annually, it would lower the long-term actuarial deficit by about 1%. This would, presumably, lower the program's long-term cash shortfall by trillions of dollars.
In today's dollars, 0.08% of taxable earnings probably doesn't sound like a lot. But for each 100,000-person increase in net immigration, it would result in approximately $5.6 billion in added payroll tax revenue for the program, per year. That's given the assumption that roughly $7.05 trillion in earned income was subject to the payroll tax in 2017, as evidenced by the $873.6 billion in collected payroll tax revenue. That's not chump change, and it's certainly something to keep in mind as the immigration debate rages on."
Social Security's judgment day is rapidly approaching
Then again, it's also a program that's on thin ice. Beginning sometime in the very near future, Social Security is expected to expend more than it collects in revenue for the first time since 1982, the year prior to the Reagan administration passing the last major overhaul of the program.
What could cause such a reversal of fortune for Social Security? Part of the blame, through no fault of their own for simply being born, is that baby boomers are leaving the workforce at a faster rate than new workers can replace them, leading to a decline in the worker-to-beneficiary ratio. Other factors at fault include increased longevity over many decades, growing income inequality, and lower fertility rates.
If there are consolations here for existing and future beneficiaries, it's that the program is in no danger of going belly-up, and it does have almost $2.9 trillion in asset reserves built up since inception. The problem is that these asset reserves can only hold up for so long if Social Security is spending more than it's collecting each year. That's why the latest Trustees report has projected that the entirety of this excess capital will be exhausted 15 years from now, in 2034. Should Congress fail to amend the program in order to generate additional revenue, a sweeping cut to benefits of up to 21% may be needed to sustain payouts through 2092.
Immigration is a net positive for Social Security
However, the factors listed above aren't the only things influencing Social Security. Immigration tends to play a very large role as well. In fact, immigration and its impact on the program might be one of the most misunderstood aspects of Social Security.
When the Trustees release their annual report looking at the short-term (10-year) and long-term (75-year) outlook for Social Security, one of the key factors examined is the immigration rate. Immigration is itself a net positive for the Social Security program. That's because a majority of legal immigrants tend to be younger in age, meaning they're going to be a part of the American workforce for decades before retiring. These immigrating workers, and the payroll tax revenue they'll provide, are very much needed to help support payouts to current and future generations of retirees.
Meanwhile, undocumented immigrants aren't allowed to receive benefits since they have no legal pathway to receiving a Social Security number (SSN). That doesn't stop some undocumented workers from using a fake SSN or a friend's SSN to get a job, ultimately paying billions of dollars into the system annually without any chance to ever collect a red cent in return.
Though the immigration debate is contentious, there's little doubt that immigration is having a positive outcome on Social Security.
Related video: How to max your Social Security payout (provided by Money Talks News)
Quantifying the impact of immigration on Social Security
The bigger question, I believe, has always been just how much of an impact is immigration having on Social Security, in dollar terms. The Trustees report provides a roundabout answer to that question.
Each year, the Trustees report examines the 25-year, 50-year, and 75-year actuarial balance based on three levels of average annual net immigration. In the 2018 report, these were 952,000 persons, 1,272,000 persons, and 1,607,000 persons. Regardless of the time period (25, 50, or 75 years), the actuarial balance -- i.e., the amount Congress would need to raise the current 12.4% payroll tax rate today to fully cover the projected cash shortfall over a defined number of years (in this case 25, 50, or 75 years) -- decreases as average annual net immigration increases. Over the long run, the report notes that for every 100,000-person net increase in average annual immigration, the long-term actuarial deficit drops by about 0.08%. The opposite is true if net immigration declines over time.
To put this in an easier-to-understand context, the long-term (75-year) actuarial deficit in 2018 was 2.84%. This means that if the payroll tax were increased from 12.4% to 15.24% (2.84% higher), it would presumably eliminate the $13.2 trillion cash shortfall currently projected between 2034 and 2092. But if, for example, net immigration into the U.S. were doubled to roughly 2.5 million people annually, it would lower the long-term actuarial deficit by about 1%. This would, presumably, lower the program's long-term cash shortfall by trillions of dollars.
In today's dollars, 0.08% of taxable earnings probably doesn't sound like a lot. But for each 100,000-person increase in net immigration, it would result in approximately $5.6 billion in added payroll tax revenue for the program, per year. That's given the assumption that roughly $7.05 trillion in earned income was subject to the payroll tax in 2017, as evidenced by the $873.6 billion in collected payroll tax revenue. That's not chump change, and it's certainly something to keep in mind as the immigration debate rages on."
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
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The only place we will disagree here is that I am strongly in favor of legal immigration, people who want to come to America to be Americans, who will pay taxes, learn our language and heritage, and be an overall benefit to the country. I also have nothing against worker permits that will have people paying taxes into the system, and/or earning citizenship as they go. I am strongly against illegals coming in and trying to make America into a mirror of the countries they fled. I am strongly against illegals draining our social programs of funds badly needed by American citizens. We have health care and educational systems failing because they are overloaded with freeloaders. Please, bring on legal immigrants. We welcome them.
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- Sonic1
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I was making a tongue in cheek barb about meskins using dead peeps ID's and the positive net effect that has on SSA's bottom line. You are in favor of this socialist program?
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
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I am in favor of SS overall. It has helped tons of people who would not save for their retirement otherwise. Do I think government should run everything, no. I like the for profit ideals because then most companies have to answer to shareholders when they screw up and if they charge to much they have to answer to competition. I would rather have the others out of the country, but don't mind them paying if they are going to be here anyway.
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- spitthedog
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The other day i heard that Canada turns a blind eye to "illegals" as they are crying out for skilled workers.
Sounds like a piece of piss to get in there?
Sounds like a piece of piss to get in there?
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If they are looking for skilled workers, they sure don't want what's coming over our southern borders but I am sure we would be happy to bus them up there if they want.
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- spitthedog
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What would your economy look like without all those Mexi-can farm workers though dude?Johnsell50 wrote:If they are looking for skilled workers, they sure don't want what's coming over our southern borders but I am sure we would be happy to bus them up there if they want.
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Just fine, people would pay more for food and less in taxes. We might even find a use for some of those collecting money for nothing now.
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- Sonic1
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You sure about that chief? Alabama went down that road already, big fail. I remember them offering locals more money than they paid 'meskins and 90 percent of them lasted less than half a day. From MIC 2012 By Julie Strupp | May 14, 2012Johnsell50 wrote:Just fine, people would pay more for food and less in taxes. We might even find a use for some of those collecting money for nothing now.
"On Sunday, the Associated Press reported worker shortages have prompted some Alabama farmers who grow labor-intensive produce to plant less, rather than have crops rot in the fields again this year. Last fall Alabama Gov. Robert Bentley signed a tough law combating illegal immigration, which prompted undocumented workers to flee the state. Few locals will perform the grueling work of picking crops, and farmers stuck in a agricultural system built on illegal labor are struggling to find replacements before their produce rots.
Alabama’s situation is not unique. Georgia passed a similar immigration law in 2011. When undocumented workers fled, farmers lost around 40% of their workers and $140 million worth of blueberries, melons, onions, and other crops due to labor shortages. This year Georgia farmers again fear they will be short on workers to pick the crops, and many have scaled back production or stopped planting altogether.
It’s not only Southern states; farmers all across America are dependent on migrant labor. For example, immigrants make up 40% of Wisconsin’s dairy industry workers and almost one in three U.S. farming and fishing workers is from Mexico."
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
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Eventually the system will adjust. I come from a migrant worker family. I did migrant work for 3 years in the early '70s, and made good money at it. I was averaging $100 a day picking fruit in southern Michigan. What the problem is, is too many Americans have gotten lazy. When we can let many on welfare know it is no longer a "Free ride", I believe that will help. Again, I have nothing against work permits. I do against so many that game the system, working on farms and taking advantage of social programs meant for American citizens. And yes, there is plenty of that. I have seen it first hand. It is one of the reasons they are willing to work for so much lower wages than American workers. What that means is that the American taxpayers are subsidizing cheap labor and paying for it in another way. Yes, the price of some food will rise. I believe that when enough people see they can make a decent living doing farm work, more will do it. Will it take a while, yes. Will some farmers hurt for a while, yes. I love farming, but it has to change.
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- Sonic1
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I remember living on base in Japan many decades ago. Good housing and dilligently maintained by the Army. You want our service people to go through some ill conceived adjustment period? Well that's exactly whats happening and it's a disgrace. Reuters "“It is frankly unconscionable that our soldiers and their families would be living in these types of conditions when we ask so much of them day in and day out.”Johnsell50 wrote: I like the for profit ideals because then most companies have to answer to shareholders when they screw up and if they charge to much they have to answer to competition.
The Reuters reporting described rampant mold and pest infestations, childhood lead poisoning, and service families often powerless to challenge private landlords in business with their military employers. Many families said they feared retaliation if they spoke out. The news agency described hazards across Army, Navy, Air Force and Marine Corps base housing communities." Reuters link from Yahoo. https://news.yahoo.com/army-calls-housi ... 59876.html
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
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I was most definitely not talking about the armed forces. I don't even want emergency services, or prisons, run privately. I am talking about regular businesses.
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- Sonic1
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Do you want the VA privatised ? What about SSA ? You take a broad brush and paint socialisim as evil... it's a bit different when it directly benefits you
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
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The things you are mentioning will hopefully never be privatized. Reg businesses means regular businesses. The "Green New Deal" wants everything run by the government, that means everything, nothing for profit anymore. The only program I am benefitting from is SS and I have been paying into that almost all my life. That is something I earned, not something I am taking from anyone else. I do not even use Medicare, even though I could. I collected unemployment 1 time in my life for 2 weeks and never again. I paid out of pocket for my education.
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