Monday, January 23, 2006

Are you pro-immigration types sure you want to brag about this?

Courtesy of Radley, I came across this study that purports to show the hugely positive impact Hispanics have had on the North Carolina economy. The reserchers claims that Hispanics added $9.2 billion to the North Carolina economy in 2004, while only costing the state a measly "$61 million for schools, health care and prisons to accommodate the rapidly growing immigrant population".

Well, looking into the measly $61 million figure, one discovers it is a net number, calculated by taking the $756 million in taxes paid by Hispanics and offsetting it by the $817 million the state spent on education, health care and prisons for Hispanics. So, in reality, North Carolina Hispanics represent a net cost to the North Carolina state budget. Given that North Carolina (I presume) has to balance its budget each year, it's a good thing that at least some demographic groups bring in more in tax collections than they take out in spending.

And the $9.2 billion that the study claims Hispanics 'add' to the North Carolina economy? Well, that number represents the 'ripple effect' of the $8.3 billion in after tax income earned by Hispanics in 2004. What the study doesn't tell you is that, if Hispanics were not earning this money, somebody else would have been (perhaps not quite as much, as the study claims that Hispanics work for less than other ethicities).... so the ethnic makeup of the workforce is pretty irrelevant to the amount of money rippling through the North Carolina economy.

As bad as the above is, I think some of the underlying assumptions are off base as well. The study claims that North Carolina spent $467 million on education for Hispanic students. Well, in 2002, North Carolina spent $6,500 per student for education. So, according to my trusty calculator, North Carolina could have had no more than 72,000 Hispanic students in its school system ($467,000,000 / $6,500). And what's the likelihood that of the 600,000 Hispanics in the state only 72,000 of them would be grade school aged? Yes, not much. And the study reports that only $299 million was spent by the state on health care for Hispanics. I don't have any way of guessing at the number of Hispanics who pay their own way on health care, but using a ballpark guess of $3,000 in per person spending for health care, North Carolina could be paying for health care no more than 100,000 Hispanics... 16% of the total. Now, is a ratio of insured to uninsured of 5 to 1 unlikely? My guess, based on nothing more than a lack of actual knowledge, is that the state had to picking up the health care for more than 100,000 Hispanics. Of course, if the state spends less than $3,000 per person, that changes the dynamics of the calculation... but when does a state - any state - do anything cheaply?

So again, I ask: what exactly is there in this study that pro-immigration types want to brag about?