Filling a vacuum: the fiscal impact of refugees on Utica, New York

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Filling a vacuum the fiscal impact of refugees
on Utica, New York

• Paul Hagstrom
• Associate Professor of Economics
• Hamilton College

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MSA Population Changes
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The Economy of Utica, NY

• Shrinking population - down by about 7 in 90s
• Growing employment -
• Manufacturing jobs down 15
• Transportation/util down 11
• Service jobs up 38

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Facts about Uticas Refugees

• Since 1975
• 32 countries
• 11,000 so far
• Three waves
• 40 Bosnia
• 21 Soviet
• 14 Vietnam
• 11 recent African countries

• Averages ---
• Tenure 5 yrs
• hh size 3.23
• Children 1.27
• Age 30
• Elderly 5

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Visualizing the Vacuum
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What Jobs do they take?

• Assembler (26.7)
• Sewer (14.9)
• Production (6.9)
• Machine Oper (5.5)
• Presser (3.8)
• Nurse Aid (3.3)

• Greenhouse (3.3)
• Folder (3.2)
• Meat Cutter (3.0)
• Laborer (2.9 )
• These total 74
• Starting Pay 7.18

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Where do the refugees work?

• 236 Employers
• Most in Utica, some Rome, some Herkimer
• 5 employers with 100 refugees
• 8 with 50-99 refugees
• 11 with 20-49 refugees
• 15 with 10-19 refugees
• 197 with fewer than 10

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The key costs to local taxpayers are

• Medicaid
• 25 from local
• workers get health insurance but often not for
  family
• diminishes slowly over time
• TANF 25 from local
• participation diminishes rapidly
• Education largest cost is education of refugee
  children

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What are the main costs? Who pays?

• Resettlement costs -- State Department, refugee
  pays for flight
• Education
• ESL largely federal/state funding
• Childrens schooling state and local
• Job placement - state grant
• All receive Medicaid (.25 local), TANF (.25), and
  Food Stamps (federal)
• Others- (SSI is federal)?

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Primary Benefits

• Jobs lead to SALES TAX
• Local share of 8 tax is 2
• Not all goods are taxable (save)
• some leakages from transfers
• Home Buyers pay PROPERTY TAX
• Home buyers and renters affect property values
• Renters keep some properties on tax rolls
• Workers encourage businesses to stay

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Simulation 2A Single Cohort
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Simulation ResultsOverlapping Cohorts
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Conclusions

• Net cost in early years and then yield benefits
  for many years to come
• Annual benefits become positive after 14 years
  while the cumulative benefit becomes positive in
  year 23.
• The first year net cost of a single refugee
  household is about 4,413, (education 40, TANF
  34, and Medicaid 26).
• The primary fiscal benefits accruing from
  participation in labor markets and real estate
  markets.

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More Conclusions

• The costs and benefits depend on the composition
  of the households and on their willingness to
  stay in the Utica area.
• Most, but not all, refugees first jobs are in
  traditionally low-wage jobs requiring little
  formal training and relatively low levels of
  English proficiency. There is little evidence
  that refugees have hurt the employment
  opportunities of native workers.