How migrants have contributed to Social Security benefits
The immigrant workers contributed more than $25 billion in Social Security taxes in 2022 despite not being eligible to receive retirement benefits unless their immigration status changes.
In 2022, these immigrants forwarded a total of $96.7 billion in taxes to the federal government and various states and municipalities. As a result, they contributed $25.7 billion toward Social Security taxes, $6.4 billion toward Medicare taxes, and $1.8 billion toward unemployment insurance taxes.
According to The New York Times.
According to a report, actuaries with the Social Security Administration stated that the administration paid out Social Security benefits to 68 million Americans each month with a total value of $1.5 trillion last year.
When an immigrant becomes a lawful permanent resident in the United States, they must pay Social Security taxes just like U.S. citizens. They must also pay Medicare taxes to fund these two separate government programs. (1) They pay Social Security taxes on most of their earnings up to a certain amount, $132,900 in 2018, (2) based on their actual earnings.
According to the report, in 2023, a total of 29.1 million foreign-born workers, including those who entered the country without permission, made up 18.6% of the U.S. workforce. The agency stated that the labor force participation rate among those not born in the U.S. rose to 66.6%, which is almost 5% higher than the rate for workers born in the country.
In 2022, it was stated that 4.5% of the U.S. workforce was composed of foreign-born workers, with a total of 89.9% of these immigrants belonging to the working-age group.
Migrants pay property tax and sales tax, as well as federal payroll taxes withheld from their earnings. Workers also have state and federal taxes deducted from their paychecks, even though they are ineligible to receive assistance from social programs. In some cases, migrants struggle with receiving their federal or state tax refunds.
“They receive a lot of attention in politics. At the end of the day, they’re just ordinary citizens paying ordinary taxes.”
Employees and employers each pay 6.2% of salaries with a cap on the amount of earnings subject to the tax.
It's estimated that in 2022, immigrants paid around $8.5 million in state and local taxes. But, it's predicted that this number could increase to a staggering $10.3 billion if immigrants were granted work permits.
How Trump's Immigration Policy Could Worsen Social Security's Financial Shortfall
Some effects may take even longer to manifest.
As immigration-related policies take hold, Social Security's contributions from undocumented immigrants will eventually catch up. Over the past decade, declining birth rates have contributed to the shortfall, and increasing numbers of baby boomer retirees have added to the growing fiscal concern.
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Many Americans are calling on their elected officials to take action regarding Social Security. However, according to the Peterson Foundation, only 30% of Americans are aware that their benefits could be reduced.
"Voters accept that leaving Social Security untouched is not feasible because automatic cuts are unworkable and delaying only makes the problem more complicated and expensive to address," Michael A. Peterson, CEO of the Peterson Foundation, stated.
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