In the American debate over immigrants, one question comes up often: What does it cost the government to help them? Alongside that question, we should ask another: Who benefits from their labor? That missing question matters. The same person can be an essential employee for a business and still be unable to cover their family's basic expenses.

They have a job and earn a paycheck, but cannot build savings. Moving into a better job may require learning the language or updating their qualifications, both of which take time and money. Leaving their current job is difficult, too: A few weeks of lost income could mean missing the rent. Work continues while progress stalls.

This problem isn't unique to immigrants. But for them, low wages may come with language barriers, difficulty using an education earned abroad, and choices limited by immigration status. An immigrant and an undocumented person are not the same thing; their access to employment and social protections can differ as well.

When we assess cheap labor, then, the wage itself is only the starting point. What matters is how benefits and costs are divided: the business gets the work, while the employee's unmet needs fall on the family and, in some cases, the public budget.

Wages and the Cost of Living

As of January 1, 2026, New York City's general minimum wage is $17 an hour. At 40 hours a week for 52 fully paid weeks, that produces $35,360 a year before taxes. At $18 an hour, annual earnings are $37,440. [1]

Imagine a family with two adults and one child. One parent works, while the other cares for the child. At $17 an hour, the family's entire annual income would be $35,360. This is an illustration, but the question behind it is real: How far does that income go in New York?

The Massachusetts Institute of Technology (MIT) Living Wage Calculator estimates that a family of two adults and one child, with one working adult, needs $99,579 a year before taxes in Staten Island, Richmond County. The model was updated on February 15, 2026. The income in our example is about 36% of MIT's estimate. [2]

Housing makes the gap especially clear. In the same model, the family's annual housing expense is $32,383, about 92% of the pretax income in our example. That, too, is a modeled expense, not every family's actual rent. [2]

Costs differ across counties, and not every household lives according to this model. Some pay less in rent, some receive help from relatives, and some use public programs. MIT's estimate is neither a legally required wage nor an exact budget for every family. But the comparison shows how far a legally permitted wage can fall short of a family's needs.

That gap shows up in everyday choices: an extra shift or a class; a doctor's visit or another essential bill; searching for a new job or protecting current income. This creates a cycle in which working more does not always create more opportunity.

Who Benefits and Where the Costs Fall

For an employer, the direct benefit of low wages is lower labor costs. When an employee finds it difficult to leave, a business can retain their labor at a relatively low price. This does not describe every employer's intention. It does show why workers' choices matter: People who can move to another job are also better positioned to negotiate working conditions.

Some of the benefits reach consumers. According to a research summary from the National Academies of Sciences, Engineering, and Medicine, immigrants' labor reduces the prices of some goods and services, including child care, food preparation, and housekeeping. Outcomes vary by market: Some savings translate into lower prices, while some remain with the business. [3]

The employee gains income and experience. But if wages do not cover essential expenses, a job's economic benefit does not fully translate into financial security. The household still faces the risks of illness, reduced hours, and lost income.

Under these conditions, needing public assistance does not mean being unemployed. A 2026 report from the U.S. Government Accountability Office (GAO) found that approximately 13.8 million wage-earning adults ages 19-64 enrolled in Medicaid worked at some point during 2024. Approximately 10.6 million wage-earning adults in the same age range lived in households receiving food assistance through the Supplemental Nutrition Assistance Program (SNAP). These groups may overlap, so their totals cannot be added together. [4]

Among the Medicaid group, 66.1% worked full time (at least 35 hours a week) for at least part of 2024; among the SNAP group, 71.3% did. In both groups, about 88% worked in the private sector. However, full-time work throughout the year was less common: 47.8% of wage-earning adults enrolled in Medicaid worked full time for 50-52 weeks, compared with 76.8% of those not enrolled in the program. [4]

These figures do not separate immigrants. They show that the need for public assistance exists alongside both low pay and unstable employment. Having a job is not the same as having uninterrupted income throughout the year.

The federal government and the states jointly fund Medicaid. If an employee meets the program's eligibility requirements, the public budget pays for covered medical services. That does not mean money is being taken from another citizen's personal “Medicaid account.” [5]

This raises a question that goes beyond the person receiving assistance: If a business benefits from an employee's labor and the public pays for part of that employee's health care, does the business also benefit indirectly from the system?

Such a mechanism is possible, but establishing its existence and size requires separate research. GAO does not claim that employers lower wages because assistance programs exist, or that they would raise pay if those programs were eliminated. The need for assistance also depends on family size, working hours, and other circumstances. “Indirect subsidy,” therefore, is an economic interpretation here, not a measured dollar amount or a proven allegation against a company.

The costs do not disappear in the other scenario, either. If an employee has neither insurance nor access to assistance, the employee and their family still face medical bills, lost working time, and possible debt.

Assistance Is Not Equally Available to All Immigrants

This is where we need to distinguish the overall situation of low-wage workers from immigrants' specific options. The fact that millions of working people use Medicaid does not mean every low-wage immigrant has the same protection.

Undocumented people generally cannot obtain full federally funded Medicaid coverage. If they meet other eligibility requirements, coverage may be available for treatment of an emergency medical condition. That is not the same as ongoing, comprehensive insurance. [6]

New York offers additional options. Child Health Plus is available to children regardless of immigration status. Pregnant people can qualify for Medicaid if they meet the relevant requirements; beginning in 2024, access was also expanded to eligible undocumented people age 65 and older. [7] For New Yorkers who cannot obtain or afford insurance, NYC Care offers one route to low-cost or no-cost services. However, it is not insurance and operates within the NYC Health + Hospitals system. [8]

The October 1, 2026, change does not affect only undocumented people. Under guidance from the Centers for Medicare & Medicaid Services (CMS), the principal noncitizen categories eligible for federal funding for full Medicaid and Children's Health Insurance Program (CHIP) benefits are lawful permanent residents (green card holders), people in the specific Cuban/Haitian entrant category, and migrants admitted under the Compacts of Free Association (COFA). Other eligibility requirements still apply. The guidance preserves exceptions, including coverage for lawfully residing children and pregnant people under a state-elected option; federal funding for emergency Medicaid remains available. [6]

The restriction also affects some lawfully present people, including refugees and people granted asylum who do not hold another qualifying status. But according to an October 1, 2026, announcement from the New York City Health Department, New York Medicaid recipients affected by this federal funding change will continue to have coverage under protections in state law, with the state paying the full cost and no federal contribution. Their health plans may change. [9]

That is an important distinction: losing federal funding does not always mean losing coverage. In this New York example, the cost shifts from one level of government to another.

The picture, then, is mixed. Public programs protect some immigrants from medical costs. Others have only limited coverage, while for some, families still bear much of the cost. The sources used here do not provide a single measure of the share of working immigrants who actually receive each benefit. Attributing all their health care costs to the public is therefore not supported by the evidence.

Americans Also Stand on Different Sides of the Equation

In this relationship, “the American people” are not a single, uniform group. One person is a consumer who benefits from lower prices. Another holds a similar job and feels pressure to compete. A third runs a business and must compete with companies that break the rules. All contribute to funding public systems in different ways.

Over periods of 10 years or more, the National Academies found that immigration's overall effect on the wages of U.S.-born workers is small. Where negative effects were found, they were more likely to affect earlier immigrants and U.S.-born workers who had not completed high school. These are findings from historical research, not a forecast for every job in today's labor market. [3]

In public finance, too, it matters which budget we examine. The Congressional Budget Office's (CBO) 2024 report did not assess immigration as a whole. It estimated the additional immigration surge over 2021-2026 at 8.7 million people, in the category “other foreign nationals.” That category included, among others, people who entered without authorization, those who remained after their authorized stay expired, and those allowed to enter temporarily through immigration parole. [10]

CBO projected that this surge would reduce federal deficits by approximately $0.9 trillion over 2024-2034. The figure did not include state and local budgets; spending determined through annual appropriations was also considered separately. CBO itself emphasized the substantial uncertainty of its estimates. [10]

Research summarized in the same report generally found that immigration increases federal revenues more than federal costs, while the reverse occurs at the state and local levels. CBO expected a similar distribution for this surge. For example, the report says New York City spent $4.3 billion between July 2022 and March 2024 to accommodate new arrivals and meet housing-related obligations. The report presents this as spending to accommodate new arrivals and meet housing-related obligations, rather than as a Medicaid expenditure figure. [10]

In CBO's model at the time, the surge slowed wage growth through 2026 for workers with 12 or fewer years of education. In later years, productivity gains strengthened average wage growth. This was a 2024 projection, not an already measured outcome or a complete assessment of subsequent policy changes. [10]

Higher federal revenues and additional local costs are not mutually exclusive. Nor are immigrants and taxpayers two separate groups. The Internal Revenue Service (IRS) Individual Taxpayer Identification Number, or ITIN, allows eligible individuals to meet tax reporting requirements but does not authorize employment or confer eligibility for Social Security benefits. [11]

Unfair competition is a separate issue. On wages generally subject to these taxes, the employer's share of Social Security and Medicare taxes totals 7.65%, subject to the applicable wage limit and exceptions. If a business conceals employment and avoids these obligations, it gains an advantage over a competitor that follows the rules. [12] That is a question of lawbreaking; low wages or cash payments alone do not establish such a violation.

Responsibility Should Follow the Benefits

Reducing assistance may lower a particular budget expense, but it cannot eliminate an employee's needs. If working conditions remain unchanged, that cost shifts to the family. The problem therefore cannot be judged solely by how many people receive assistance.

An employer's responsibility begins with transparent pay: a wage rate set out in writing, accurate records of hours worked, and clear deductions. Advance schedules, paid time for training, and clear promotion criteria let employees work toward a better future without giving up all their current income.

Enforcement agencies should identify unpaid work, unlawful deductions, and concealed employment. Complaint procedures should be clear and available in multiple languages. According to the New York State Attorney General, workers have labor rights regardless of immigration status, and unlawful retaliation for exercising those rights is prohibited. [13]

Consumers and service purchasers also have a role. An unusually low price may reflect an efficient operation, but it may also conceal unpaid labor. Assessing the price should include another question: What made the service so inexpensive?

Counting the assistance provided to an immigrant gives us only part of the picture. The other part is the value created by that person's labor, and the people who receive it. Without seeing the connection, people most easily shift responsibility back to the person with the fewest choices.

When someone else pays what a wage leaves uncovered, the savings are really a transfer.

Sources

1. New York State. New York State's Minimum Wage. General minimum wage rates effective January 1, 2026.

2. MIT Living Wage Calculator. Living Wage Calculation for Richmond County, New York. Updated February 15, 2026. Household category: two adults, one working, one child.

3. National Academies of Sciences, Engineering, and Medicine. New Report Assesses the Economic and Fiscal Consequences of Immigration. September 21, 2016. Full report: The Economic and Fiscal Consequences of Immigration, 2017.

4. U.S. Government Accountability Office. Federal Social Safety Net Programs: Millions of Workers, Including Many Employed by Large Employers, Continue to Rely on Medicaid and SNAP, GAO-26-108703. June 22, 2026; revised August 24, 2026. Work schedules: Table 1, report page 4.

5. Centers for Medicare & Medicaid Services / Medicaid.gov. Financial Management.

6. Centers for Medicare & Medicaid Services. Section 71109: Implementation of “Alien Medicaid Eligibility,” State Health Official Letter SHO 26-001. April 8, 2026. Relevant noncitizen categories: pages 3-5; changes effective October 1, 2026.

7. NYC Office of Citywide Health Insurance Access. Immigrants. Health insurance options in New York.

8. NYC Care / NYC Health + Hospitals. About NYC Care.

9. New York City Health Department. NYC Health Department Mobilizes Support for New Yorkers Impacted by New Federal Medicaid Requirements. October 1, 2026. Confirms continued coverage at state expense for the groups affected by the federal funding change.

10. Congressional Budget Office. Effects of the Immigration Surge on the Federal Budget and the Economy. July 2024. See the summary, the population-category definitions, and Box 1 on state and local budgets.

11. Internal Revenue Service. Topic No. 857: Individual Taxpayer Identification Number (ITIN).

12. Internal Revenue Service. Publication 15 (2026), (Circular E), Employer's Tax Guide. See “Social Security and Medicare taxes for 2026.”

13. New York State Attorney General. Immigrant Workers' Rights.