New York included undocumented immigrants in pandemic aid, and 290,000 workers will benefit: Other states should replicate the program

Key takeaways:

  • Congress and both recent presidential administrations excluded undocumented immigrants from key sources of pandemic aid: unemployment insurance and stimulus checks.
  • In April, New York became the first state in the nation to give undocumented immigrants aid that approaches what others got in unemployment insurance, benefiting an estimated 92,000 people. And New York will give undocumented workers who don’t qualify for the higher level of compensation what others got in stimulus payments, benefitting an additional 199,000 people.
  • It hurts all of us if any of us are left out of programs intended to get us through the recession and through a health care crisis. New York’s program could readily be replicated in other states.

This April, New York committed an unprecedented $2.1 billion of the state budget to make up for the exclusion of undocumented immigrants from federal aid during the COVID-19 pandemic.

Over a year ago, the pandemic hit New York early and brutally hard. Hospitals were full, and there were heart-wrenching backlogs in burying the dead as its limit. It quickly became clear that immigrants and people of color were disproportionately among those falling sick and dying. At the same time, the notion of “essential workers” took hold, and New Yorkers applauded the people keeping life going for the rest of us, knowing that many were immigrants, including large numbers who were undocumented. The unemployment rate spiked to 16% and was even higher for people of color and immigrants.

Yet, the first round of desperately needed federal aid very specifically excluded many immigrants. Future rounds of aid under both the Trump and Biden administrations continued to exclude undocumented individuals from expanded unemployment insurance and stimulus checks.

The exclusion of undocumented immigrants, and in some cases their families, came as a slap in the face to community groups and immigrant advocates. Make the Road New York—an immigrant-led workers’ rights advocacy group—conducted a survey that showed overwhelming job loss and loss of life among the communities they serve. In the end, 90 members of Make the Road alone passed away because of COVID-19.

“They don’t see my desperation,” Angeles Solis, lead organizer for Make the Road, said her members were saying about New York’s elected officials. “Let’s take this fight to the streets.”

Out of this sense of outrage came the Fund Excluded Workers Coalition, which quickly gained over 200 member organizations and moved forward powerfully under the leadership of Make the Road, New York Communities for Change, and other groups with deep roots in immigrant communities and communities of color.

The coalition led an escalating campaign with rallies, a protest outside the governor’s office, a day when two New York City bridges were shut down, and a moving hunger strike that lasted for 23 days. The Fiscal Policy Institute’s (FPI) Immigration Research Initiative was a part of the coalition.

To help state lawmakers understand the need for the program, we at FPI stressed early on how federal aid was excluding immigrants, and provided initial estimates of the cost and benefits of creating an Excluded Worker Fund to help those left behind—addressing the needs of both undocumented immigrants and people leaving incarceration during the pandemic. When the state was facing a $15 billion budget gap, FPI’s chief economist Jonas Shaende and I wrote about how the Excluded Worker Fund could be paid for with a tax on the income from wealth—a Mark-to-Market tax.

When the New York Assembly and Senate each put $2.1 billion in their budget proposals, we kept the pressure on by bringing media attention to the fact that the real need was even higher, helping ensure that negotiations didn’t whittle that number down. When there was a pause between campaign actions, we helped keep the issue in the news by showing the recession’s devastating impact on people of color and immigrants. And, when the deal was finalized, we showed how many workers would benefit, and what the boost would be to local economies.

The Excluded Worker Fund is a landmark program.

Under New York’s program, undocumented immigrants who qualify for Tier 1 benefits will get a flat rate of $15,600. That’s less than the average of $34,000 that other New York workers got in unemployment insurance (UI) if they were unemployed for all of the past year, but it is the first program in the nation to provide undocumented immigrants with financial support approaching what other workers get in UI.

We project that about 92,000 people across the state will qualify for those Tier 1 benefits. And, we expect another 199,000 undocumented immigrants to get Tier 2 benefits, which are $3,200—the equivalent of what other people got in stimulus payments. In all, we expect 290,000 workers to benefit from the fund.

Table 1

290,000 undocumented workers projected to benefit from Excluded Worker Fund

Region Tier 1
($15,600 per Worker)
Tier 2
($3,200 per Worker)
How Many Workers Benefit (Total)
New York City 67,000 146,000 213,000
Long Island 11,000 24,000 35,000
Nassau 6,000 12,000 18,000
Suffolk 5,000 12,000 17,000
Lower Hudson Valley 6,000 14,000 20,000
Mid Hudson Valley 3,000 6,000 9,000
Capital Region 1,000 3,000 4,000
Northern and Western NY 3,000 6,000 9,000
Central NY 400 1,000 1,000
Finger Lakes 1,000 2,000 2,000
Mohawk Valley 200 400 1,000
North Country 200 400 1,000
Southern Tier 400 1,000 1,000
Western NY 1,000 2,000 2,000
New York State 92,000 199,000 290,000

Source: Fiscal Policy Institute analysis of data from the Center for Migration Studies and the American Community Survey. Numbers are independently rounded. Indented regions are approximations (see methodology in https://fiscalpolicy.org/wp-content/uploads/2021/04/Excluded-Worker-Fund-Statewide-Benefits-April-2021.pdf for details).

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In addition to the direct benefit to families, there is a clear ripple effect across local economies. As Dean Baker at the Center for Economic and Policy Research said recently, giving money to unemployed undocumented workers—and to undocumented workers in general—is about as well-targeted a program as you could imagine for creating maximum economic stimulus during this recession. The funding will go disproportionately to lower-income communities and areas that have been hit hardest by the pandemic, and undocumented workers will put the money quickly back into circulation by buying food and necessities for their families.

There has been opposition, of course. One common counterargument is the false and harmful belief that undocumented immigrants don’t pay taxes.

Everyone pays taxes. When you walk into a store, you pay sales tax. If you own a home, you pay property tax. If you rent a home—as many undocumented immigrants do—your rent helps the landlord pay property tax. And, although this country has not made it easy recently, about half of undocumented immigrants also file income tax returns using Individual Taxpayer Identification Numbers, or ITINs.

With help from the Institute on Taxation and Economic Policy, we estimate that undocumented immigrants pay about $1.1 billion each year in state and local taxes in New York. In fact, in our upside-down tax system, undocumented immigrants—like all low-wage New Yorkers—pay a higher effective tax rate than the top 1% of taxpayers.

Finally, about half of undocumented immigrants work on formal payrolls—using incorrect Social Security numbers—and as a result, they have payroll taxes withheld. Most payroll taxes go to the federal government, which are not included in the analysis above.

Parallel to payroll taxes are unemployment insurance taxes that employers pay for workers on their payroll. These funds paid on behalf of undocumented immigrants amount to $1.4 billion since the last recession, yet these workers were not eligible for the funds.

It hurts all of us if any of us are left out of programs intended to get us through the recession and a health care crisis. New York’s program could readily be replicated in other states—policymakers simply need the will and the humanity to recognize that undocumented immigrants are essential members of our communities.

David Dyssegaard Kallick is the Director of the Immigration Research Initiative at the Fiscal Policy Institute in New York, a member of the Economic Analysis and Research Network (EARN).