The Fiscal Cost of Resettling Refugees in the United States

FAIR – by Matthew O’Brien and Spencer Raley

At the end of 2016, the United Nations estimates that a record-setting 65.3 million people had been forcibly displaced from their homes due to conflict or persecution. Many of those people will seek refuge in the developed countries of the West, including the United States. Reflecting America’s long tradition of providing refuge to the oppressed, we have admitted over 3.5 million people since 1980 and 96,900 refugees just in the last year in 2016.

As the nation considers what levels of immigration we can fiscally and environmentally sustain, it is important to understand the costs of resettling both refugees (people seeking refugee status abroad) and political asylum seekers (those applying for refugee status from within the United States).

According to a new study released by FAIR, the annual cost to U.S. taxpayers is $1.8 billion and over five years, that financial burden skyrockets to $8.8 billion.

Those figures are only estimates because refugees will access welfare and other government assistance at different rates and the number of refugees entering the U.S also changes from year-to-year.

Using the most recent admissions figures, data on federal and state public assistance programs, and information from the Office of Refugee Resettlement (ORR), our analysis found:

  • The cost per refugee to American taxpayers just under $79,600 every year in the first five years after a refugee is resettled in the U.S.;
  • In 2016, the State Department spent nearly $545 million to process and resettle refugees, including $140,389,177 on transportation costs;
  • Of the $1.8 billion in resettlement costs, $867 billion was spent on welfare alone;
  • In their first five years, approximately 54 percent of all refugees will hold jobs that pay less than $11 an hour;
  • $71 million will be spent to educate refugees and asylum-seekers, a majority of which will be paid by state and local governments.
  • Over five years, an estimated 15.7 percent of all refugees will need housing assistance, which is roughly $7,600 per household in 2014 dollars.

It is important to note that this analysis does not address the costs associated with any incurred national security and law enforcement costs associated with some refugees who pose a threat. The total price of additional vetting and screening expenditures, law enforcement and criminal justice costs, and federal homeland security assistance to state and local agencies is hard to quantify.

Introduction

At present, the United Nations estimates that there are approximately 65.3 million people who have been forcibly displaced from their homes by conflict or persecution1. Many of those people will seek refuge in the developed countries of the West, including the United States.

America has a long tradition of providing refuge to the oppressed. We admit both refugees (people seeking refugee status abroad) and political asylees (people requesting refugee status from within the United States).2 And doing so is consistent with our history and our values. But the way in which we integrate refugees/political asylees into our society has changed drastically over the years.

The largest groups of refugees arrived in United States the aftermath of World War II.3 Significant numbers of anti-communist dissidents sought political asylum during the Cold War.4 However, the admission of WWII refugees, and Cold War asylees, took place in an overall context of very low immigration.5 And, until the 1980’s most refugee assistance was provided through private networks of charitable ethnic and religious groups that provided both financial assistance and help in assimilating to the American way of life.6 Many Americans contributed generously to those groups but their contributions were voluntary. Under the current model, taxpayers are involuntarily bankrolling the significant costs that resettling refugees and asylees imposes on the citizens of the United States.

Since 1980, the United States has admitted over 3.5 million people seeking refuge.7 We continue to admit refugees at a rate of roughly 50,000 to 100,000 refugees per year8 and 20,000-50,000 political asylees per year.9 Most of this cohort arrives here without financial resources and possessing few marketable job skills. And the American taxpayer is being asked to feed, clothe and shelter them, in addition to funding job training programs.10

Most refugee/asylee resettlement expenditures come in the form of cash assistance, welfare programs and other social services. Federal welfare programs that refugees and asylees can access include the following:

  • Temporary Assistance for Needy Families (TANF) formerly known as AFDC
  • Medicaid
  • Food Stamps
  • Public Housing
  • Supplemental Security Income (SSI)
  • Social Security Disability Insurance
  • Child Care and Development Fund
  • Job Opportunities for Low Income Individuals (JOLI)
  • Low-Income Home Energy Assistance Program (LIHEAP)
  • Postsecondary Education Loans and Grants
  • Refugee Assistance Programs
  • Earned Income Tax Credit and Additional Child Tax Credit11

State and local welfare programs that refugees and asylees can apply for include but are not limited to:

  • Housing assistance
  • English as a Second Language programs
  • Special education programs
  • Job training and employment search assistance
  • Social services programs
  • Immigration assistance programs (aiding asylees in filing green card applications, citizenship applications, and petitions for relatives to immigrate to the U.S.)12

Eligibility for some of these programs expires seven years after an individual is admitted to the United States as a refugee or asylee. However, many welfare programs are available for as long as a refugee/asylee resides in the United States.13

Additionally, the U.S. incurs significant expenses before refugees even get here: vetting applicants for refugee status, processing immigration applications and transporting approved applicants to the United States. Asylum seekers may cost taxpayers even more, considering they are present in the United States when they apply for protection. Because of this, they are entitled, as a matter of law, to a hearing on their asylum claim before U.S. Citizenship and Immigration Services, an additional hearing before the U.S. Immigration Court if the government intends to deny their claim, and an appeal to the Board of Immigration Appeals.

Funding all of these programs places a heavy burden on the public treasury. Below is FAIR’s estimate of the calculable cost, per refugee/asylee, for their first five years in the United States.

NB: Both refugees and political asylees are admitted to the United States based on the definition of refugee found at 8 U.S.C. § 1101(a). The major difference between the two statuses is that applicants for refugee status are abroad, applicants for political asylum are at the U.S. border or within the United States. Hereinafter, for the sake of convenience, FAIR uses the term “refugee” to refer to both traditional refugees and political asylees (unless otherwise specified).

Methodology

When calculating refugee costs, it is important to understand that the usage of various federal assistance and benefit programs is far from static. Welfare usage by refugees typically decreases the longer they reside in the country. However, even after five years, the rate at which refugees use public assistance programs is still much higher than the overall national average. The Office of Refugee Resettlement (ORR) releases up to five years’ worth data on the use of welfare programs by refugees in their annual report to Congress. To find a consistent annual rate, we calculate the average rate of usage based on the available data during that allotted five-year period.

In addition to varying welfare usage rates, the number of refugees entering the U.S also changes from year-to-year. We base our calculations on the most recent admissions data. As such, if the United States decides to increase the total number refugees it admits on an annual basis, these costs will increase. Unanticipated surges in the number of individuals admitted as refugees commonly occur in response to geopolitical events.

After determining how many refugees are likely to use a welfare benefit, we then multiply this number by the annual average benefit to find the mean yearly cost to U.S taxpayers. We conservatively estimate that amount of public assistance received by refugees each year is roughly equal to the overall national average.

In contrast to welfare expenses, the majority of specifically budgeted federal costs associated with refugees occurs during the initial resettlement phase. This includes costs such as transportation, processing, reception, placement, and programs designed to help entrants find employment and welfare benefits. For simplicity, we break these costs up and include them in the annual cost over five years.

Unless otherwise noted, we draw all statistics relating to the overall number of refugees utilizing specific welfare programs from ORR’s latest Annual Report to Congress, compiled at the end of fiscal year 2015.14 The total number of refugees and asylees is also derived from the ORR’s latest figures.

Federal Budgeted Costs to Refugees/Asylees – $777,443,000

Education Costs for Refugees/Asylees $71,275,000

In 2015, FAIR estimated that education costs for students with limited English proficiency (LEP) averaged out to $12,128 across the nation, compared to $10,763 for non-LEP students.24 Nearly 90 percent of all refugees and asylees who entered the United States in FY2011 were not fluent in English. That number improved to 58 percent by the end of FY2015, averaging out to approximately 75 percent throughout the FY2011 – FY2015 period.25

Based on immigration data from The Migration Policy Institute, and understanding that most (but not all) UAMs are covered by funding that is separate from the refugee program, it appears that approximately 10 percent of admitted refugees will enroll in a public school.26 Assuming the cost to educate LEP students in the United States remains mostly unchanged since 2015, that would make the cost of educating new refugees approximately $71,275,000 annually over their first five years in country.

Taxation Calculations-$215,386,500

According to ORR, refugee’s earnings are meager throughout their first five years in the United States, increasing from $10.22/hour to $10.86/ hour – only a 6.3 percent increase over five years, on average. This means they are unlikely to pay any federal income taxes, and could end up receiving a net credit from the federal government when programs like the Earned Income Tax Credit and Additional Child Tax Credit are considered.

Furthermore, their state and local income tax contributions will be also negligible, after any returns. This is largely because approximately 15 percent of all recent refugees have been settled in states with no income tax, and more than half come from states where the state tax rate for low-income filers is 4.5 percent or lower, based on data from the Pew Research Center27 and the Tax Foundation.28

However, based on unemployment and labor participation data from ORR, an average of approximately 54 percent of all refugees will participate in the workplace during their first five years in the country. Their average income will come out to just over $21,000 per year, based on ORR data.

Accordingly, we estimate that the average state and local income tax contribution per working refugee comes out to $843, annually, or just over $4,200 over five years. This totals roughly $215.4 million in state income tax payments overall. However, these relatively low payments do not cover the costs of cash programs and services received by refugees.

There are other, less substantial rebates and credits for which refugees are eligible. Additionally, there many more state and local assistance programs through which refugees may receive taxpayer-funded payouts, especially once they’ve resided within the United States for an extended period of time. It is also likely that there are certain other state and local taxes that refugees pay. However, due to the lack of available data, we are unable to integrate those numbers into our overall calculations. And, in any case, it is virtually certain that such data would simply show that the refugee program is even more expensive than is presumed by most estimates.

The purpose of our benefits vs. taxation calculations is not to provide an exact cost associated with the admission of large numbers of refugees (even if it were possible to do so). Rather, our intention is to demonstrate that the majority of readily available data clearly indicates that the refugee program, as it is currently constructed, is a net drain on the United States’ economy and represents an ever-increasing burden on the American taxpayer.

Conclusions

    • Based on the above data, refugees (including recipients of political asylum) cost American taxpayers nearly $1.8 billion, annually, or approximately $8.8 billion over five years.
  • This totals $15,900 per refugee, annually, or just under $79,600 per refugee over their first five years in America.

While the United States certainly has an interest in assisting those who are truly in dire straights, it is now doing so in a manner that is increasing the already crushing burden that state, local and federal governments impose on American taxpayers. Most of the charitable ethnic and religious groups which once helped to assimilate refugees into our way of life have morphed into contractors who earn significant sums of money by billing the government for services provided to refugees. Therefore, these groups have a vested interest in keeping refugee numbers high. And taxpayers are footing the bill.

In addition, refugees are often resettled in small to mid-sized communities without any attempt to consult with local political officials, educational administrators or public safety officers. This results in additional strains on already tight school, public health and social services budgets as communities attempt to cope with a rapid influx of individuals who may lack the language, cultural and job skills needed to integrate into the life of American cities and towns.

Increasingly, some refugees also pose national security and public safety costs that are difficult to quantify. These include vetting and screening expenditures, law enforcement and criminal justice costs, and federal homeland security assistance to state and local agencies. They also include funding for intelligence community agencies, which play an increasingly important role in checking the background of refugees who come from countries with significant terrorist activity.

America is currently faced with massive budget deficits, a tense global security climate, and an economy that, while improving, is still experiencing growing pains. Accordingly, government policy should shift away from relocating refugees to the United States. The costs, both fiscal and social, outweigh the benefits provided to a relatively small portion of the overall refugee population in the world.

Instead, the U.S. should begin using its considerable economic, diplomatic and military influence to de-escalate the conflicts that give rise to refugees. In situations where de-escalation is not possible, the U.S. should provide direct assistance to refugees within, or nearby, their country of origin, rather than relocating them to the United States. These alternatives are both more cost-effective – up to 10 times cheaper29 – and safer for the American public, than resettling refugees in the United States. They would also allow the United States to compassionately help hundreds of thousands more refugees on an annual basis, without continuing to add to the already high costs of immigration currently being borne by American taxpayers.

Footnotes and endnotes

[1] Adrian Edwards, “Global Forced Displacement Hits Record High,” United Nations High Commissioner for Refugees, June 20, 2016, http://www.unhcr.org/en-us/news/latest/2016/6/5763b65a4/global-forced-displacement-hits-record-high.html
[2] Both refugees and political asylees are admitted to the United States based on the definition of refugee found at 8 U.S.C. § 1101(a). The major difference between the two statuses is that applicants for refugee status are abroad, applicants for political asylum are at the U.S. border or within the United States. Accordingly, for the sake of convenience, unless otherwise specified, FAIR uses the term “refugee” to refer to both traditional refugees and political asylees.
[3] Milan Kubic, “A Refugee Looks Back: What the 1940’s Teach Us About Today’s Crisis,” Wilson Quarterly, Winter 2016, https://wilsonquarterly.com/quarterly/the-post-obama-world/a-refugee-looks-back-what-the-1940s-teach-us-about-todays-crisis/
[4] Lisa Reynolds Wolfe, “Immigration to the U.S. During the Cold War,” Cold War Studies, September 22, 2016, https://coldwarstudies.com/2016/09/22/immigration-to-the-us-during-the-cold-war/
[5] U.S. Citizenship and Immigration Services, “Agency History: Post-War Years,” https://www.uscis.gov/history-and-genealogy/our-history/agency-history/post-war-years
[6] Xiaojin Zhao, “Immigration to the United States After 1945,” Oxford Research Encyclopedia of American History, July 2016, http://americanhistory.oxfordre.com/view/10.1093/acrefore/9780199329175.001.0001/acrefore-9780199329175-e-72#ref_acrefore-9780199329175-e-72-note-12
[7] Office of Immigration Statistics, “2015 Yearbook of Immigration Statistics,” U.S. Department of Homeland Security, December 2016, p. 43, https://www.dhs.gov/sites/default/files/publications/Yearbook_Immigration_Statistics_2015.pdf
[8] Jens Manuel Krogstad, Jynnah Radford, “Key Facts About Refugees to the U.S.,” Pew Research Center – Fact Tank, January 30,2017, http://www.pewresearch.org/fact-tank/2017/01/30/key-facts-about-refugees-to-the-u-s/
[9] Jie Zong, Jeanne Batalova, “Refugees and Asylees in the United States,” MPI – Migration Information Source, June 7 2017, https://www.migrationpolicy.org/article/refugees-and-asylees-united-states
[10] Kerry Picket, “U.S. Government to Offer Each New Refugee Thousands of Dollars in Social Services and Cash,” The Daily Caller, September 18, 2015, http://dailycaller.com/2015/09/18/each-refugee-to-be-offered-thousands-of-dollars-in-tax-payer-assistance-and-welfare-for-years/
[11] Jennifer Mayorga, Ann Morse, “The U.S. Refugee Resettlement Program: A Primer for Policy Makers,” National Conference of State Legislatures, December 4, 2017, http://www.ncsl.org/research/immigration/the-u-s-refugee-resettlement-program-a-primer-for-policymakers.aspx#6
[12] For a complete list of programs and services, by state, see: U.S. Department of Health and Human Services – Office of Refugee Resettlement, “Find Resources and Contacts in Your State,” https://www.acf.hhs.gov/orr/state-programs-annual-overview
[13] “Refugee Resettlement Fact Sheet,” Refugee Resettlement Watch, June 20, 2013, https://refugeeresettlementwatch.wordpress.com/refugee-resettlement-fact-sheets/
[14] Office of Refugee Resettlement, “Annual Report to Congress,” Fiscal Year 2015, https://www.acf.hhs.gov/sites/default/files/orr/arc_15_final_508.pdf
[15] Ibid
[16] Bureau of Population, Refugees and Migration, “FY 2016 Summary of Major Activities,” https://www.state.gov/documents/organization/265231.pdf
[17] International Organization for Migration, United States, “Refugee Travel Loans,” https://www.iom.int/countries/united-states-america#rtl
[18] The Henry J. Kaiser Family Foundation, “Medicaid Spending per Enrollee (Full or Partial Benefit,” FY 2014, https://www.kff.org/medicaid/state-indicator/medicaid-spending-per-enrollee/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
[19] Ife Floyd, “TANF Cash Benefits Have Fallen by More than 20 percent in Most States and Continue to Erode,” Center on Budget and Policy Priorities, October, 2017, https://www.cbpp.org/research/family-income-support/tanf-cash-benefits-have-fallen-by-more-than-20-percent-in-most-states
[20] Social Security Administration, “SSI Federal Payment amounts for 2018,” FY 2018, https://www.ssa.gov/oact/cola/SSI.html
[21] Washington State Department of Social and Health Services, “Refugee Cash Assistance,” https://www.dshs.wa.gov/esa/community-services-offices/refugee-cash-assistance
[22] Liz Schott, “State General Assistance Programs are Weakening Despite Increased Need,” Center for Budge and Policy Priorities, July, 2015, https://www.cbpp.org/research/family-income-support/state-general-assistance-programs-are-weakening-despite-increased
[23] Congressional Budget Office, “Federal Housing Assistance for Low-Income Households,” September, 2015, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50782-lowincomehousing-onecolumn.pdf
[24] Spencer Raley, Marc Ferris, “The Elephant in the Classroom: Mass Immigration’s Impact on Public Education,” The Federation for American Immigration Reform, September, 2016, https://fairus.org/issue/publications-resources/elephant-classroom-mass-immigrations-impact-public-education
[25] Op. Cite. ORR Budget
[26] Jie Zong, Jeanne Batalova, “Frequently Requested Statistics on Immigrants and Immigration in the United States,” Migration Policy Institute, March, 2017, https://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states#Demographic
[27] Jynnah Radford, Phillip Connor, “Just 10 States Resettled More than Half of Recent Refugees to U.S.,” Pew Research Center, December, 2016, http://www.pewresearch.org/fact-tank/2016/12/06/just-10-states-resettled-more-than-half-of-recent-refugees-to-u-s/
[28] Nicole Kaeding, “State Individual Income Tax Rates and Brackets for 2016,” Tax Foundation, February, 2016, a href=”https://taxfoundation.org/state-individual-income-tax-rates-and-brackets-2016/”>https://taxfoundation.org/state-individual-income-tax-rates-and-brackets-2016/
[29] Rob Williams, “Syrian Refugees Will Cost Ten Times More to Care for in Europe than in Neighboring Countries,” The Independent, March, 2016, http://www.independent.co.uk/voices/syrian-refugees-will-cost-ten-times-more-to-care-for-in-europe-than-in-neighboring-countries-a6928676.html

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