Previously I wrote an article that just looked at the net budgetary impact of whites and non-whites. Here I decided to break down the black and Hispanic numbers as well.
The most recent year with good data on everything is 2014. So that is the year all of these numbers are from.
Before getting into the methods, I’ll first show the final impact of this so you can see what a big deal this is:
Budgetary Impact of Whites, Blacks and Hispanics in 2014
This takes into account taxes paid and government services consumed at both the State and Federal level. The “Equal Military” column treats military spending as a service consumed equally on a per-capita basis between blacks, whites and Hispanics. The “Static military” assigns all military spending to whites.
On net, whites generate a $249.52 billion surplus, or $1,260 per person if you assign 100% of military spending to whites. If you just give whites a proportional share of military spending, their surplus goes up to $553.52 billion total and $2,795 per capita.
Blacks, by contrast, run a budget deficit of $389.71 billion, or $10,016 per capita. If 100% of military spending is assigned to whites, blacks STILL run a $306.53 billion deficit, or $7,700 per capita.
Hispanics run a budget deficit of $411.95 billion or $7,289 per capita if military spending is proportional. If 100% of military spending is assigned to whites Hispanics run a deficit of $291.3 billion, or $5,160 per capita.
Race and Tax Revenue
So regarding the methodology, I first looked in several places to figure out how much each race paid in taxes, as the government doesn’t keep such statistics. However, there are statistics collected by the tax foundation showing how much each income bracket pays in taxes.
And the census has data on income for each race and the proportion of brackets they are. And so using this, we can deduce how much each racial group pays in taxes:
This comes out to $4529.52 billion paid by whites, $528.30 billion paid by Hispanics, and $485.67 billion paid by blacks.
Race and Government Use
So how does that compare with services consumed? Well for Social Security, Medicare, Medicaid and Welfare I was able to find racial breakdowns. But what about state spending? Roads, schools, trash pick-up, police? For all of that I lumped into “equal government” and assigned the cost of it on a population basis.
So as it happened, and this is something I thought going in, the race differences in government consumption are not a very big deal, and the real cause of the budgetary impacts of races is the difference in tax payment. I also found some data showing that whites made up 75% of millionaires, and I thought “ya know, based on this, whites overall probably pay around 75% of the taxes” – and I was correct.
Wage Impact of Racial Diversity
One thing people will say in response is that white wages are jacked up by having non-whites around. This doesn’t appear to be true when you look at regions in the US:
So a big impact doesn’t just pop out at you. And if there is a correlation between median white income in a state, or county, and the proportion of blacks and/or Hispanics in that state or county, well then the next step would be to show causality.
Another interesting thing to point out is that a Dutch meta-analysis of 384 studies on the impact of immigration on native wages in the United States and EU countries found that a 1% increase in immigrants as part of the labor force was associated with a 0.119% reduction in native wages.
But one thing to consider is correlation and causation. Just because a 1% increase in immigration is only associated with a 0.119% decrease in native wages doesn’t mean that the actual impact is that small.
So we’re looking at a small negative impact on wages, not the big positive impacts you would need for the libertarian story to hold water. I mean it’s not stupid to believe in the absence of data; lower-skill people come in, earn wages, white people are freed for higher-earning labor. But it doesn’t appear to be actually happening.
If you want to argue that the presence of blacks and Hispanics around white people drives up white wages, that’s not something that is immediately obvious from the data, it’s only intuitive if you to hold very pro-market priors. You need more than just “ideas that make sense” and connect-the-dots / painting-by-numbers economic narratives that libertarians like to spin, and then act as if they’ve actually discovered something.
The negative fiscal impact of blacks and Hispanics is significant. All of this discussion of a “national debt” and “deficit” is primarily of function of blacks and Hispanics. Without them, we would be running budget surpluses today, even when keeping the military the same size.
Immigration Impact Meta-Analysis:
Taxes paid by brackets:
Racial groups by income bracket:
Medicaid Enrollment by race, projected from these numbers:
Welfare use by race:
Social Security Enrollment by race in 2014:
First published at The Alternative Hypothesis