Every year, workers living in the U.S. illegally pay billions into the Social Security system with little hope of ever getting any back.
By Peter Cameron, THE BADGER PROJECT
Projections estimate that the Social Security Administration will be unable to fully pay the benefits it owes Americans starting in 2035, unless Congress makes some changes.
And some prominent voices, including former President Donald Trump at last month’s presidential debate, blame unauthorized immigrants for draining the Social Security fund.
“These millions and millions of people coming in, they’re trying to put them on Social Security. He will wipe out Social Security,” Trump said of President Joe Biden on the debate stage in Atlanta.
The truth is almost the exact opposite.
“If anything, we’re gaining from undocumented immigrants,” said Karen Holden, a UW-Madison professor emerita of public affairs and consumer science who focuses on Social Security.
Paying in without a payoff
Many unauthorized immigrants work “off the books.” Employers typically pay them in cash, without making required tax and insurance contributions for those employees – a significant financial benefit for the employer and a liability for the workers. The employer is also committing a crime.
Many other unauthorized immigrants whose employment technically is documented must provide an employer with a Social Security number, which the immigrant does not possess. In those situations, the employee typically fabricates a Social Security number or uses someone else’s.
Like citizens earning a paycheck, payroll tax is withdrawn from unauthorized immigrants’ checks, 6.2% for Social Security and 1.45% for Medicare.
Unlike citizens, immigrant workers who had been paid off the books and those with fabricated Social Security documentation cannot receive Social Security and Medicare benefits when the individual hits the appropriate age. They are, in effect, paying into the system without receiving a payout.
Designed by a Wisconsin legislative researcher in the 1930s, Social Security “is a system that has set up barriers to make it very difficult for somebody without a Social Security number or with a false Social Security number to get benefits,” Holden said. “You cannot get benefits out unless you have a Social Security number that matches the number that the Social Security Administration produces.”
Contributing billions to the system
An estimated 70,000 unauthorized immigrants live in Wisconsin, according to the nonpartisan Migration Policy Institute.
And an estimated 10.5 million live across the U.S., according to the Pew Research Center. Studies indicate they contribute more than $10 billion — that’s right, with a b — to Social Security every year, and billions more into Medicare.
By comparison, the Social Security Administration estimates that improper payments, including fraud and payments to the deceased, amount to about $3 billion per year.
Attempting to withdraw Social Security benefits without proper documentation is illegal and getting caught would lead to deportation, Holden noted. That threat is another major deterrent for an unauthorized immigrant who might consider trying to access those benefits.
And the Social Security Administration says it is vigilant about monitoring the system. Its Office of the Inspector General hunts for and deters fraud by, among other measures, conducting audits and investigations, searching for weaknesses in the system and recommending improvements.
Social Security’s roots trace back to Edwin Witte, chief of Wisconsin’s Legislative Research Library and a lifelong resident of the state. In the early 1930s, President Franklin D. Roosevelt asked an assistant secretary of labor who also happened to be a UW alum, to create an economic safety net.
The assistant secretary, Arthur Altmeyer, turned to Witte, who had been the state’s expert in drafting laws as chief of Wisconsin’s Legislative Research Library to develop the program. Roosevelt signed the Social Security Act into law in 1935.
If you suspect anyone of abusing Social Security, you can file a report at oig.ssa.gov or call the Office of the Inspector General’s fraud hotline at 1-800-269-0271.
The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.
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