Open Borders and the Welfare State

"A decade ago, Nobel prize-winning economist Milton Friedman admonished the Wall Street Journal for its idée fixe on open-border immigration policy. “It’s just obvious you can’t have free immigration and a welfare state,” he warned.

In the “transfer state,” government taxes the upper middle class and shifts some $1.5 trillion in economic resources to lower-income groups through a vast variety benefits and subsidies... On average, low-skill immigrant families receive $30,160 per year in government benefits and services while paying $10,573 in taxes, creating a net fiscal deficit of $19,587 that has to be paid by higher-income taxpayers...

There is also a political dimension to the transfer state. Elections in modern societies are, to a considerable degree, referenda on the magnitude of future income redistribution. An immigration policy which grants citizenship to vast numbers of low-skill, low-income immigrants not only creates new beneficiaries for government transfers, but new voters likely to support even greater transfers in the future.

The grant of citizenship is a transfer of political power. Access to the U.S. ballot box also provides access to the American taxpayer’s bank account. This is particularly problematic with regard to low-skill immigrants. Within an active redistributionist state, as Friedman understood, unlimited immigration can threaten limited government...

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