By using American state-level data from 1999 to 2008, this article explores how the recent immigrant influx has influenced public welfare spending in the American states. By integrating the race/ethnicity and globalization compensation theory, I hypothesize that immigration will increase welfare spending in states with a bleak job market and exclusive state immigrant welfare policy; in contrast, immigration will decrease welfare spending in states with a good job market and inclusive state immigrant welfare policy. Empirical tests show evidence for both hypotheses, suggesting that the applicability of general political science theories depends on a combination of state policy and economic contexts.