Over the past 15 years, the city of Green Bay has been transformed by immigration. From negligible proportions in 1980, the foreign-born and Hispanic populations of Green Bay grew steadily through the 1990s, and had established a significant community presence by the 2000s. Though this change did not come all at once, the release of the 2000 Census results crystallized locals’ thinking. According to one observer, “About 50 percent said: ‘This is great because the diversity will enrich us.’ But another 50 percent said: ‘Oh, my God, now what are we going to do?’” According to another, “For minorities to come here and live has created culture shock in Green Bay.”[i]

This study seeks to provide new information on some of the actual and potential consequences of immigration for Green Bay and surrounding Brown County, Wisconsin. Specifically, the study finds that:

• If recent demographic trends continue, Hispanics will grow from 10.7 percent of the Green Bay population in 2006, to at least 17 percent in 2017, to nearly 30 percent in 2032. This last figure would put Green Bay’s Hispanic population on par with that of contemporary Arizona, which shares a border with Mexico.
• Based on 2000 Census data, immigrant households in Brown County are estimated to have consumed somewhere between $4 million and $18 million more (in 2007 dollars) in state and local government services than they paid in state and local taxes. On the other hand, these same households most likely provided a partial subsidy of the federal programs and services that native Wisconsin taxpayers received. This is because immigrants (particularly illegal immigrants) make relatively large tax contributions to the federal government but are eligible for fewer benefits than the native-born population. At the state level, though, immigrant tax payments are relatively low, and the most expensive public service—K-12 public education—is available to the children of all immigrants, whether legal or illegal.
• Though the available data are suggestive rather than conclusive, there is little indication that immigration to Green Bay has harmed job opportunities for native workers. Furthermore, though the impacts are difficult to measure, Green Bay immigrants clearly have benefited the local economy by starting businesses, saving and investing money, purchasing consumable goods, hiring employees, and creating the conditions for more efficient use of capital through the provision of their labor.
• Data on the impact of immigration on wages in the Green Bay metro area are mixed and inconclusive. It seems unlikely, though, that any downward pressure on local wages due to immigration has been significant.

INTRODUCTION

“Immigration”—these days, few words in American political discourse can incite passions the way this one can. As recently as five years ago, though, immigration was an arcane issue discussed chiefly among a small community of academics, think tank researchers, and government officials. It was never a particularly important subject among American voters, nor to the mainstream media. Because of this, discussions of immigration policy took place largely outside the spotlight of public scrutiny.

Things began to change in the aftermath of the terrorist attacks of September 11, 2001. Those attacks revealed how simple it was for enemies of the United States to enter the country legally—to live, work, and travel within the U.S. without fear of apprehension, let alone deportation; and to plan and carry out acts of mass murder with minimal interference.

The government investigations that followed the 9/11 attacks revealed a permissive, and in some ways highly dysfunctional, federal system for regulating immigration. That system was failing—not just at stopping national security threats, but also at the basic function of protecting the country’s borders. Thus, the conversation about immigration soon expanded from national security issues to issues of economic security. What were the costs and consequences of the tide of immigrants, legal and illegal, surging across the country’s southern border? Did anyone know? Even more important, could the government do anything about it?

President Bush and Congress took up the issue of immigration reform in 2004 and 2005, but their efforts were met with public skepticism. Ultimately, the “comprehensive” approach favored by the president and Congress, and ostensibly designed to address border security issues and the problem of existing illegal immigrants, failed to achieve majority support from the public. Comprehensive legislative reform failed, and further federal action stalled.

The legislative debate did, however, increase public awareness of immigration issues. Words and phrases such as “broken borders,” “amnesty,” “anchor babies,” and “security first” began to enter media accounts and the common parlance. Citizen groups like the Minutemen Civil Defense Corps not only organized for political action, they actually patrolled areas of the border where federal agents were thin on the ground. Bloggers and talk radio hosts pressed the immigration issue with relish. State and local officials, frustrated by the inaction of the federal government, acted on their own—to punish businesses that employed illegals, to deny public benefits to non-citizens, and to demand proof of citizenship as a precondition of voter registration. Finally, the major Democratic and Republican candidates for their parties’ 2008 presidential nominations excoriated the federal government for its failure to address what was suddenly a high-profile public issue.

To outside observers, all of this action might seem to have taken place a million miles away from Wisconsin. The state had no connection to the September 11 attacks, and is traditionally (and correctly) thought of as being populated disproportionately by whites. Wisconsin is also separated from Mexico by nearly an entire continent. Canada, on the other hand, is just a stone’s throw away. Thus, unless fishermen and fur trappers were stealthily migrating southward from the Great White North, immigration could hardly be an issue in the Badger State.

Could it?

Wisconsinites know better. From the Hmong resettlement in the 1970s and 1980s to the influx of Hispanic immigrants in more recent years, immigration has changed the complexion of Wisconsin, literally and figuratively. This study examines the impact of immigration on one Wisconsin community in particular, the city of Green Bay. As the city and the surrounding area of Brown County have become home to an increasing number of immigrants, public officials have reacted in controversial ways. Brown County, for its part, passed an ordinance in 2002 that declared English the official language of the county. More recently, in the summer of 2007, the Common Council of Green Bay adopted legislation allowing the city to revoke the license of any business that was found to be employing illegal immigrants. The leader of the effort to pass the ordinance, Council President Chad Fradette, described the new law as follows: “It's a message to the illegal alien community that says you are not welcome. Don't come here.”[ii]

Obviously, city and county officials are concerned about the changes that immigration has brought to their part of Wisconsin. But should they be? This study seeks to provide some answers to that question by presenting and discussing several different kinds of data:

• information on the demographic changes in Green Bay in recent years, and projections of the future demographic make-up of the city;

• an analysis of the fiscal consequences of immigration in Brown County—specifically, the costs to government of providing services to the immigrant population, and the revenues brought in by that population; and

• the economic consequences of immigration for the native-born population of Green Bay in terms of employment and earnings.

These data present a complex picture of the impact of immigration on Green Bay and Brown County, Wisconsin. Our hope, though, is that this analysis will give residents and public officials in these areas a more concrete sense of the costs and benefits of the recent years’ wave of immigration.

Green Bay Demographics—Past, Present, and Future

Recent demographic trends among Hispanics and the foreign-born

Table 1 presents some basic demographic data for the city of Green Bay and the United States as a whole, derived from the 2006 American Community Survey (ACS), which is administered by the United States Census Bureau.[iii]

The table indicates that, consistent with popular understanding, Green Bay’s population is much less diverse—at least in racial and ethnic terms—than that of the country as a whole. Green Bay has a higher percentage of whites, and lower percentages of Asians, Hispanics, and foreign-born persons than the U.S. does.

Consider Table 2, however. Using ACS data again, this table replicates Table 1’s data for Green Bay, but replaces the U.S. data with data for the state of Wisconsin:

Notice here that Green Bay exhibits considerable differences from the state of Wisconsin as a whole. As a state, Wisconsin is whiter than Green Bay, and also has a smaller percentage of Asians, Hispanics, and foreign-born residents. The differences in the Hispanic percentages are particularly noteworthy, with more than one in ten residents of Green Bay falling into this category, but fewer than one in twenty for the state of Wisconsin.

Things were not always this way in Green Bay. Figure 1 illustrates the changing proportions of Hispanics in the city over time.

Figure 1  Population Percentage of Hispanics in the City of Green Bay: Various Years[iv]

Figure 2 covers the same time period, but in this case shows the foreign-born population percentage in Green Bay.

 

Figure 2  Foreign-Born Population Percentage in the City of Green Bay: Various Years[v]

The two charts depict very similar trends. In 1980, both Hispanics and the foreign-born were a negligible proportion of the Green Bay population. Their percentages grew very modestly between 1980 and 1990, but thereafter began to increase significantly. There is a noticeable jump in both trends between 1990 and 2000, and continued strong growth (particularly in the Hispanic population series) through the mid-2000s.[vi] Thus, during the roughly 25-year period covered in these two charts, both Hispanic and foreign-born residents grew from a trivial presence in Green Bay to a relatively significant portion of the local population.[vii]

Figures 3 and 4, respectively, compare the trends in Hispanic and foreign-born populations in Green Bay to those in Wisconsin and the United States as a whole.

Figure 3  Population Percentage of Hispanics in the City of  Green Bay, the State of Wisconsin, and the United States: Various Years[viii]  

Figure 4  Foreign-born Population in the City of Green Bay, the State of Wisconsin, and the United States Various Years[ix]

The figures clearly demonstrate why immigration has become such a hot-button issue in the city of Green Bay. During the past 15 years, the city’s Hispanic population has grown by a factor of more than four, bringing the city into much closer alignment with the U.S. as a whole. The growth of the Hispanic population in Wisconsin has been noteworthy since 1990 as well, but the rate of Hispanic growth in Green Bay has far outstripped that for the entire state.

The trends in the foreign-born population levels are similar, though not quite as dramatic. Once again, Green Bay showed significant growth in the percentage of foreign-born residents between 1990 and 2005, coming to more closely resemble the U.S. as a whole, but still lagging somewhat. The state of Wisconsin experienced some growth in its foreign-born population after 1990, but as recently as 2006 remained a much less popular destination for immigrants than Green Bay and other parts of the U.S.

What does the future hold for Green Bay?

Projecting demographic trends is as much art as science, and depends critically on one’s assumptions. This section presents projections for Green Bay’s Hispanic and foreign-born populations that assume a continuation of growth trends from the recent past. Obviously, there are many reasons why growth in these population groups might not continue at the same pace as in recent years. Local, state, or national policy changes—both in the U.S. and in the home countries of prospective immigrants—might stem the tide of immigration, or make Hispanics feel less welcome in Green Bay. A downturn in the local economy might make Green Bay a less attractive location for immigrants to settle. U.S. cities with labor shortages, particularly in the low-wage job sector, might aggressively court some of the same individuals and families who are currently settling in Green Bay, drawing them away from the city.

Because of these possibilities, and many others, the numbers that appear below should be thought of as population projections—not predictions. In other words, they do not reflect the author’s best judgment about the likely composition of Green Bay’s population in the future. Instead, they reflect fairly straightforward mathematical calculations that project the recent years’ growth in foreign-born and Hispanic populations into the future. (Appendix A provides a detailed discussion of the methodology used to make the projections below.)

Figure 5 presents data for two different groups—Hispanics and the foreign-born. The left-most part of the figure shows the 2006 Green Bay population percentages for Hispanics and the foreign-born, respectively. These are the actual numbers estimated by the Census Bureau. The next two sets of projections are for the year 2017. One is labeled as the “low” (or conservative) projection, the other as the “high” (or more liberal) projection. These labels apply only to the Hispanic population projections, however, as the foreign-born population projection is the same in both cases. The final two sets of projections are for the year 2032. Again, there is a “low” projection and a “high” projection, but for the Hispanic population only.

Figure 5  Ten and Twenty-five Year Population Projections for Hispanic and Foreign-born Residents of Green Bay[x]  

What stands out in Figure 5? First, while the Green Bay foreign-born population is projected to continue growing, that growth will be relatively modest. Even looking approximately 25 years into the future, to 2032, Green Bay is not projected to become a “city of immigrants.” Instead, if trends from recent years continue, the city would be expected in 2032 to have a foreign-born population roughly equivalent to the current percentage of foreign-born residents in states such as Massachusetts and Illinois.

The projections for the Hispanic population, however, paint a different picture. From a 2006 population percentage of 10.7 percent, Hispanics are projected to constitute at least 17 percent of Green Bay’s population in 2017, and perhaps as much as 29 percent of the city’s population in 2032. The latter figure would make Green Bay a miniature version of contemporary Arizona, where nearly one-third of the population is Hispanic. This trend would be driven in part by an absolute increase in the number of Hispanics in Green Bay and by an absolute decrease in the number of non-Hispanics. (The latter trend is already in progress, and has been since at least 1990.) The net effect would be very slow population growth in Green Bay over time, but with an ever-increasing number and percentage of Hispanic city residents.

The Fiscal Implications of Immigration in Brown County

Issues

It should not be surprising that Green Bay families, policymakers, and media outlets (including blogs and talk radio) have begun to ask, “Is all this demographic change a good thing or a bad thing?” There are many potential answers to this question, depending on one’s particular interests: cultural diversity, economic growth, tax revenues and social service expenditures, community cohesion, and so on. This part of the study, however, focuses on a fairly narrow question—the fiscal implications of immigration for Brown County.

The standard exercise in studies such as this is to tote up the taxes paid by immigrant households and compare them to the costs of the services received by those households. There are two reasons for this. First, absolute figures may not mean much on their own. If one were to learn, for example, that the immigrant population of Green Bay paid $20 million in state and local taxes in a particular year, would that be a lot or a little? It is difficult to say without some standard of comparison. Second, comparing taxes paid by immigrant households with the cost of services received by immigrant households gives some sense of the net cost, or benefit, of immigration for the community.

The decennial Census provides the only data source sufficiently large and sufficiently detailed to support the analysis in this section. Though the Census collects information on virtually every U.S. household, the full range of household- and person-level Census data is not made available to the public. Instead, researchers have access only to a relatively small sample of the much larger Census data collection effort. Unfortunately, the population of Green Bay is insufficiently large (in the context of publicly available Census data) to produce valid, reliable estimates of taxes paid by, and expenditures made on behalf of, the local immigrant population. Accordingly, the analysis below encompasses all of Brown County, where the data are available to make more valid, reliable—though far from error-free—estimates.

How much do immigrants pay in state and local taxes?

The Wisconsin Department of Revenue regularly calculates the state and local tax burden for Wisconsin households, both in the aggregate and by income level. By assigning Brown County immigrant households to the Department’s income categories, one can produce a rough estimate of state and local taxes paid by those households. (The full methodology is described in Appendix B.) This, of course, requires that income for Brown County immigrant households be determined. As noted above, the only data source large and detailed enough to provide that information is the decennial Census. Because the most recent Census was in 2000, income data from 1999 must be used.

Following the methodology in Appendix B, it is estimated that Brown County households headed by foreign-born individuals or couples paid just over $22 million in state and local taxes in 2000. Because of sampling error in the Census data, however, this figure is more usefully presented as a range of revenues based on a 90 percent confidence interval. The lower end of this range is $19.1 million. The upper end is $25.4 million. Table 3 presents the data in graphical form.

How much do immigrants consume in state and local services?

Data limitations mean that there are significant constraints on what one can reasonably conclude about immigrant households’ use of state and local services in Brown County. The approach followed in this section, then, is to discuss only those services and dollar amounts of which one can be relatively confident. Government services for which costs cannot be allocated with confidence are noted, but are not expressly included in the analysis.

Fortunately, the single most expensive service consumed by immigrant households is also the one on which the best data are available—public education. Census 2000 data indicate that Brown County immigrant households had an estimated 4,021 students enrolled in kindergarten through 12th grade public schools. Department of Public Instruction statistics show that state/local spending per student in Brown County in the 1999/2000 school year was $8,163.[xi] Multiplying this figure by the number of students yields a one-year cost estimate of $32,823,423. Because of sampling error in the Census data, though, the estimated number of students (4,021) may be low, or may be high. As above, the spending number is best presented as a range, based on a 90 percent confidence interval for the number of students. This range is from $30,603,087 to $35,043,759.

The Census also includes data on individuals’ receipt of public assistance income. In the context of Census 2000, “public assistance income” meant income from the Wisconsin Works (W-2) program, the successor to the joint federal/state welfare program, Aid to Families with Dependent Children (AFDC). In 2000, W-2 provided cash benefits to qualifying Wisconsin families in exchange for participation in various work, training, and educational requirements. The program also provided supportive services such as education, job readiness assistance, and transportation subsidies.

Census 2000 data indicate that fewer than one percent of persons in Brown County immigrant households received income through W-2 in 1999. In part, this small number is probably due to sampling error. But it is also due, no doubt, to underreporting of income:

Even recognizing this caveat, the best available estimates indicate that public assistance income in 2000 constituted a trivial amount of the total state and local expenditures for immigrant households in Brown County. Consider Census data for the state of Wisconsin as a whole. In 1999, only 1.7 percent of Wisconsin households received public assistance income. The average annual payment for those households was roughly $2,500.[xiii] State data indicate that in 2000, the earliest year for which data are available, Brown County had only 118 unduplicated W-2 participants. Even if every one of these was a member of an immigrant household, the total cost of cash assistance for Brown County immigrants would have been only $295,000. Because of the way public assistance is funded in Wisconsin, however, the federal government would have been responsible for more than half of that spending. All told, then, cash assistance for Brown County immigrants on welfare in 2000 probably cost the state somewhere in the range of a few tens of thousands of dollars.

This amounts to little more than rounding error on the nearly $33 million in state and local spending on public education for children from immigrant households. Of course, along with cash assistance one could include additional costs for transportation aid, education and training, and other services available under Wisconsin Works. Even with spending on these services included, though, there is no plausible set of assumptions that leads to public assistance costs of more than a few hundred thousand dollars per year for Brown County immigrant households.[xiv]

The state of Wisconsin does, however, have a relatively generous child care subsidy that is available to families with incomes up to 200 percent of the federal poverty line, whether or not they participate in the Wisconsin Works program. In 2000, the baseline year for the fiscal analysis, total child care subsidies in Wisconsin were roughly $188 million.[xv] Allocating those funds to Brown County proportionally (on the basis of population) results in a child care expenditure of approximately $8 million. Allocating that $8 million proportionally to the foreign-born population in Brown County results in a child care expenditure of just over $300,000; much of which is paid for by the federal government. Accordingly, as with public assistance expenditures, expenditures on child care subsidies for immigrant households are relatively insignificant.

In contrast with cash public assistance income, health- and medical-related expenditures on behalf of Brown County immigrant households had the potential to be quite costly in 2000. The biggest-ticket item here was Medicaid coverage, for which the state of Wisconsin bears substantial funding responsibility. The decennial Census did not ask respondents about Medicaid coverage, so Census 2000 data cannot be used. The annual March Supplement to the Census’ Current Population Survey (CPS) did, on the other hand, ask about Medicaid. Though the sample is too small to draw inferences at the county level, or inferences about immigrant households, state-level CPS data indicate that just over 9 percent of Wisconsin households had at least one person covered by Medicaid in 1999, and that the average household value of that coverage was $4,323.[xvi]

What about immigrant households, and Brown County immigrant households in particular? Data based on the national CPS sample indicate that a substantially higher percentage of immigrant households (18.6%) relied on Medicaid in 1999 than did native households (12.1%), and that annual Medicaid expenditures for immigrant households were about 50 percent greater than those for native households.[xvii] In order to produce a reasonable, conservative estimate of Medicaid spending on Brown County immigrant households, the $4,323 average household expenditure for Wisconsin as a whole was multiplied by the 18.6 percent national Medicaid coverage rate for immigrant households in 1999. This produced a total spending estimate of $2,959,811. Because Medicaid costs are shared between the state and federal governments, however, only about $1.2 million of this would have been paid for out of state revenues. (The exact estimate is $1,221,334.[xviii]) This can serve as a very rough estimate of the cost to the state of Wisconsin in 1999 for providing Medicaid coverage to immigrant households in Brown County.

Table 4 presents the total state/local cost estimate to this point, based on the four categories of spending already discussed: K-12 education, Medicaid, public assistance, and child care.[xix]

Though education and Medicaid coverage are the most expensive items that state/local government must finance for immigrants in whole or in part, there are many other categories of expenditures that one could attempt to measure. These include:

• emergency medical services covered outside of traditional Medicaid insurance;

• higher education;

• vocational education/training outside of the W-2 program;

• unemployment insurance payments;

• workers’ compensation payments;

• costs of judicial proceedings such as arrest, detention, litigation, and incarceration;

• state and local tax deductions and tax credits, which can (and should) be accounted for as expenditures of public funds;[xx]

• substance abuse and mental health services; and

• immunizations, maternal/child health, and other public health services.

Furthermore, these are just the areas in which costs could, in theory, be directly attributed to a specific individual, family, or household. There are many other collective goods provided by state and local government in Brown County, a portion of the spending on which could be allocated to immigrant families: the cost of new school construction; basic civic services (police, fire, ambulance, sanitation); maintenance of roads and highways; public transportation; and so on.

In each of these cases, one runs into some of the same problems already seen above: lack of valid/reliable expenditure data, and/or lack of a reasonable methodology for attributing public spending to Brown County immigrant households. There are two mitigating considerations here, however. First, in the case of most of these categories of spending, the amounts that one might attribute to immigrant households in Brown County would be trivial. Second, even if one were able to manage a complete, accurate allocation of these costs, they would only provide further evidence to support the conclusion drawn below—that immigrant households do not pay sufficient taxes to cover the costs of services they receive. The calculations underlying that point appear in the next section.

What is the net result of immigration on state and local finances?

The estimates presented above indicated that Brown County immigrant households in 2000 paid state and local taxes estimated at somewhere between $19.1 million and $25.4 million. As noted in Appendix B, however, this estimate excluded some taxpayers and several consumption-based taxes, and also applied the tax structure in 2001 to income earned in 1999. The likely net effect of this for purposes of the current analysis was to underestimate taxes paid by Brown County immigrant households in 2000.

Statewide, excluding some taxpayers and consumption-based taxes from the estimates reduced total estimated tax revenues by about 10 percent. Ideally, one would like to be able to estimate the portion of that 10 percent attributable to Brown County immigrant households. Lacking any empirical basis for doing so, however, the most reasonable approach is to inflate the upper and lower ends of the current revenue estimate by 10 percent each.[xxi] This results in updated state/local revenue estimates with a lower end of $21 million and an upper end of $27.9 million.

The revenue estimates presented in Table 3 also understated total tax revenues in that they were based on Wisconsin’s tax structure in 2001, which took in a lower percentage of income than did the tax structure applicable to 1999 income. As calculated in Appendix B, this resulted in an underestimate of revenues of approximately 5 percent. Again, assuming that that 5 percent applied consistently across income levels, and to immigrant and non-immigrant households alike, Brown County immigrant household tax payments should be adjusted upward again to a range from $22 million to $29.3 million.

Recall that the spending estimates derived above ranged from a low of $32.5 million to a high of $37 million. Let us now compare estimated revenues with estimated expenditures to arrive at a net fiscal balance. Table 5 presents the relevant data.

Table 5 indicates that under every combination of revenues and expenditures, the net fiscal balance attributable to Brown County immigrant households in 2000 was negative. In other words, these households are estimated to have consumed more in state and local government resources than they paid in state and local taxes. The estimates of the magnitude of this deficit range from a low of -$3.2 million to a high of -$15 million, with an average of -$9.1 million. In 2007 dollars, that $9 million would be equivalent to a little over $11 million. Keep in mind, too, that the estimates in Table 5 exclude a number of spending categories identified in the text. Thus, according to any reasonable set of assumptions, Brown County immigrants in 2000 consumed more in state and local services than they paid in state and local taxes.

Depending on which levels of government were responsible for paying the costs identified above, and which ones received the tax revenues; either Wisconsin state government or local Brown County governments could still come out fiscal winners. (For the sake of simplicity, Brown County government, municipal governments within Brown County, and Brown County school districts are treated as a single unit of government.) This would clearly be the case if, say, the state received most of the revenue from immigrant households in Brown County, but was responsible only for Medicaid spending and a negligible portion of the education costs for those households. In that case, the state might actually see a net surplus from Brown County immigrants, while local government in Brown County would experience a large deficit.

Based on statewide totals, one can estimate that the state probably received about two-thirds of the taxes paid by Brown County households.[xxii] In turn, the state was responsible for somewhere between one-half and two-thirds of the costs associated with the spending categories identified above.[xxiii] This means that at best state government was in a break-even position relative to tax dollars received from, and spent on, immigrant households in Brown County. In this case, Brown County governments collectively would have borne the full funding deficit themselves. It is more likely, though, that both state and local government were in a net negative fiscal position with respect to Brown County immigrants.

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