A Bit More on Immigration and Health Reform
One other point on the issue of undocumented workers and health care insurance. The assumption here is that covering undocumented workers probably hurts documented workers. They pay more in taxes, say, or face more crowded emergency rooms.
But that misses something important. If you're an unskilled or semi-skilled native worker, the situation you should really fear is one in which employers need to provide health care for you but not the undocumented immigrants competing for the same job. That's a world in which the cost of your labor is far higher than the cost of an undocumented immigrant's labor. It makes you economically inefficient. It makes you less likely to get hired.
That's what we're seeing now. Undocumented workers use public insurance (think Medicaid, S-CHIP, etc) at pretty near the rate of documented workers. According to RAND data, it's eight percent for undocumented immigrants, 10 percent for documented immigrants, and 13 percent for native-born workers. Undocumented immigrants are already using public programs, in other words. Conversely, their rate of employer-provided insurance is much lower. Sixty percent of native-born workers report having employer-sponsored insurance, as do 43 percent of foreign-born workers. But only 22 percent of undocumented workers say the same. There are lots of reasons it's a bad idea for an employer to hire illegal workers (INS raids, say). But this is one of the reasons they do it anyway.
If you're really worried about the native-born workforce, what you want to do is minimize the differences in labor costs between different types of workers. A health care policy that enlarges those differences -- that makes documented workers more expensive compared to undocumented workers -- is actually worse for the documented workers. But that's a hard argument to make politically. So we're likely to see a debate where politicians brag about helping American workers by excluding illegal immigrants from health reform even as what they're actually doing is making illegal immigrants more economically competitive against native workers.
May 18, 2009; 5:00 PM ET
Categories: Health Reform
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