The saga of federal benefits fraud in Minnesota continues to be told. Democrat Gov. Tim Walz withdrawing from his bid for re-election to a third term is just the latest chapter.
Reports of fraud in childcare operations and the connection to Twin Cities’ Somali immigrants go back nearly a decade. But state politicians and the traditional media initially ignored or downplayed the story, likely because most perpetrators belonged to a minority that had “intersectional” influence in woke circles and electoral clout for Democrats.
In 2025, County Highway magazine reported extensively on the scam, followed by the City Gazetteand finally even The New York Times. Walz, who has been in power for nearly eight years, tried to shift the blame from himself and the Somalis to President Donald Trump and conservatives for taking notice. It didn’t work.
But there is an underlying story that is no less important: the much greater cost of absorbing millions of low-skilled immigrants.
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A demonstrator waves the flag of Somalia as a vehicle passes a demonstration protesting Immigration and Customs Enforcement (ICE) in Minneapolis, Minnesota, December 8, 2025. (Tim Evans/Reuters)
In 2016, Harvard’s George Borjas wrote that “the higher costs of all services provided to immigrants and the lower taxes they pay (because they have lower incomes) inevitably imply that immigration creates a budget gap of at least $50 billion annually.”
Because most Somali immigrants subsequently came to the US as refugees or on family reunification visas, they are an interesting subgroup to study. At a news conference, Minnesota Democratic Rep. Ilhan Omar said of her Somali constituents that “we have become… nurses, doctors and engineers.”
Some, but not many. From 2019 to 2023, the average Somali household in Minnesota had an income of $43,600, compared to a national average of $78,538. That means they are eligible for many federal benefits available to citizens and some immigrants.
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In a 2024 report, Daniel Di Martino of the Manhattan Institute looked at the net fiscal impact of immigrants over their lifetime. Immigrants without a college education pose a net budget burden of as much as $400,000, DiMartino estimates, while “each immigrant under age 35 with a college degree reduces the budget deficit by more than $1 million in net present value over their lifetime.”
Somali refugees fall more into the first category. According to a recent report from the Center for Immigration Studies (CIS), 58% of them do not speak English well and 39% do not have a high school diploma. This translates into intensive use of welfare programs.
Among Somali immigrant households with children, CIS reports, 89% are on some form of welfare – 86% of these families are on Medicaid, compared to just 28% of Minnesota households headed by native-born citizens. More than one in five Somali men of working age is unemployed. More than half of children in Somali immigrant households live below the poverty line, compared to only 7.6% of children in native families.
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Studies in Europe have shown that immigrants from some countries are net recipients of the budget pot over their lifetime, while others are net givers.
In Denmark, the net budget contribution of the average native Dane is positive throughout his life. During their working years, native Danes pay more into the system than they receive. That is the only way the budget can be balanced. But the average immigrant from the Middle East, North Africa, Turkey and Pakistan never pays more to the government than they receive.
From 2019 to 2023, the average Somali household in Minnesota had an income of $43,600, compared to a national average of $78,538. That means they are eligible for many federal benefits available to citizens and some immigrants.
A Finnish study had similar results. On average, people from Somalia and many other places suffered net lifetime losses.
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Mass migration was sold to the Europeans as a solution to their declining fertility rate. To pay for comprehensive socialist benefits, the thinking went, they would have to import millions of younger workers. Unfortunately, they didn’t get the kind of migrants who are net contributors.
The countries that produce the most economically desirable immigrants have low fertility and do not export people. Meanwhile, emigrants from countries whose populations are growing and which, on average, face a lifelong budget dip, are the ones who export people.
Liberals like to quote a line from Emma Lazarus’ poem about the Statue of Liberty: “Give me your tired, your poor. Your huddled masses long to breathe free.” This is a sentimental expression from a 19th century context very different from today’s. Notice that she doesn’t say she longs for free food, free sleep, free education for your children, and free health care, legal aid, and a host of other benefits that weren’t available in 1890.
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The Trump administration has reduced the number of refugees for the 2026 budget year to 7,500. But a future president could choose to increase the number of refugees and also open up connections to other Biden-era tools to facilitate mass migration.
American voters must understand that accepting refugees and low-skilled migrants means taxpayers writing a check for hundreds of thousands of dollars to support them for life.
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Their children? Some will succeed and help balance the budget. Others don’t. It will take generations before we can determine the long-term results of American mass migration.
But in the short term, our budget hole will become much deeper, and the politics of closing it will be impossible. If we accept the fiction that all migrants are the same, and that mass migration is always a net benefit to the receiving population, we will be left with a staggering bill that we may never be able to pay.
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