Last week, the Social Security Administration released a preliminary analysis of the effects of amnesty on the finances of the Social Security program.
We already pointed out one false claim made by the @BarackObama Twitter account about the SSA analysis.
Now we can add another. Yesterday, @BarackObama asserted that SSA “says #ImmigrationReform will add 3.2 million jobs.”
As Andrew Biggs of the American Enterprise Institute notes, however, this claim is untrue:
[T]he actuaries do no modeling of the economy or the job market. They simply assume that new immigrants will find jobs and pay taxes; if the immigration reform brought in twice as many immigrants, SSA would assume they find jobs, too. Their memo doesn’t say that immigration reform creates new jobs and certainly doesn’t say that immigration reform will create new jobs for native-born Americans. The extra jobs assumed by the actuaries all belong to immigrants.
As for the claim that amnesty will increase GDP, Biggs addresses that too:
4. Does the SSA memo say that immigration reform will increase GDP by 1.6% over 10 years?
Yes, it does. But that is merely an extrapolation of the assumption that more workers mean a larger economy. Moreover, even this figure is based on the assumption that immigrants earn the same wages as native-born workers, which is untrue. The best bet is that adding low-wage workers will reduce GDP per capita, the measure of overall economic well-being.
Moreover, this is before any “dynamic” effects of immigration. For instance, CBO’s 2007 analysis assumed that immigration would lower the overall wage level by around 0.4% and reduce the wages of workers with less than a high school diploma by ten times that amount. Immigrants who are already – that is, the ones who waited on line and did the right thing – would see even larger pay reductions. The reality is that new immigration is likely to lower wages for native-born workers, not increase it. SSA didn’t even attempt to model these aspects of immigration.