Immigrants including those who entered the United States without legal authorization, have significantly contributed to the Social Security system.
In 2022 alone migrants paid $25.7 billion in Social Security taxes despite being ineligible to collect retirement benefits due to their immigration status. Their contributions play a vital role in supporting Social Security and ensuring it remains a lifeline for millions of Americans.
Migrants Contributions to Social Security and Taxes
The Institute on Taxation and Economic Policy reported that in 2022 migrants paid $96.7 billion in federal, state and local taxes. This included $6.4 billion in Medicare taxes and $1.8 billion in unemployment insurance taxes in addition to their Social Security contributions. Migrants are essential to the workforce with many employed in service construction and transportation sectors.
Their taxes including payroll deductions go toward funding social programs, even though migrants often cannot access these benefits. According to labor data from 2023, foreign born workers made up 18.6% of the US workforce with a participation rate of 66.6% outpacing native born workers by nearly 5%.
How Social Security Works?
Social Security relies heavily on payroll taxes as mandated by the FICA. Both employees and employers contribute 6.2% of wages up to a certain income cap.
This system ensures a steady flow of funds to retirees. However falling birth rates and increasing retirement rates among baby boomers have strained the system.
Immigrants particularly those of working age help offset these challenges by increasing the number of workers contributing to the fund. Their involvement has become crucial in maintaining the balance between contributors and beneficiaries.
Potential Impacts of Policy Changes
Proposed immigration related policies such as mass deportations could significantly affect Social Security funding. Deporting millions of working age migrants could lead to an estimated $20 billion annual loss in Social Security tax revenue.
This reduction could accelerate the projected depletion of the Social Security trust fund which is already expected to run dry by 2035 without Congressional action.
Experts warn that such policy changes might lead to reduced benefits for retirees affecting the financial stability of countless Americans. Additionally industries reliant on migrant labor such as healthcare and eldercare could face severe workforce shortages.
Migrants’ Tax Contributions in 2022
| Tax Type | Amount Paid (in Billions) |
| Social Security Taxes | $25.7 |
| Medicare Taxes | $6.4 |
| Unemployment Insurance | $1.8 |
| Total Federal, State, and Local Taxes | $96.7 |
FAQs about Migrants Contributed to Social Security
1. How do migrants contributed to Social Security benefits?
Migrants contribute to Social Security by paying payroll taxes, which are deducted from their wages. These funds support retirees, even though many migrants cannot claim benefits themselves.
2. How much did migrants contribute to Social Security in 2022?
In 2022, migrants contributed $25.7 billion to Social Security through payroll taxes.
3. What could happen if mass deportations reduce migrant workers?
Mass deportations could lead to a $20 billion annual loss in Social Security revenue, further straining the system and potentially reducing benefits for retirees.