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Entrepreneurship
Following State of the Union, President Obama Needs to Follow Through on Immigration Reforms
01 week ago
The President’s State of the Union address this week re-iterated some of his key themes on immigration—support for comprehensive reform, dismay that DREAM Act students and foreign students educated in this country have no way to legalize their status, and a belief that he’s done enough to the secure the border. More importantly, he framed these themes in context to America’s economic recovery, innovation and growth. However, while any mention of immigration in the State of the Union is welcome, it’s what the President didn’t say that may have more of an impact on how his administration is remembered this year on immigration—and how his vision is measured by voters in the coming election.
In the State of the Union address, President Obama repeatedly signaled to Congress that he would sign sensible bills to reform our immigration system, big or small. But he quickly noted that partisan politics would make it all but impossible to pass comprehensive reform:
The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan, let’s at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.
There are plenty of bills that fit this description, from the DREAM Act to proposals offering green cards to foreign graduates in science and engineering to support for immigrant entrepreneurs, but they are just as likely to flounder in the sea of partisan politics as something grander and more comprehensive.
And while the president suggested that the ball was in Congress’s court, he didn’t mention that his Administration has moved forward on reforms that don’t require Congressional action. The Administration has become more aggressive in the last in year in fixing parts of our backward immigration system, such as overhauling immigration detention, a review of the Secure Communities program, a re-invigoration of the use of prosecutorial discretion, and attempts to promote streamlined adjudications and family unity. The latter, announced just weeks ago, has generated real excitement among immigrant communities.
Similarly, changes to the way government officials decide what cases should be prosecuted in immigration court—and what cases should be dropped—have given hope to millions of immigrants that they may be able to stay with their families, at least for a while longer. But there remains considerable uncertainty about how DHS will routinely exercise discretion, especially amidst reports that DREAM Act students and others who clearly fit the government’s low priority status are still being deported.
In the areas of detention reform and Secure Communities, however, the early enthusiasm about change has been replaced by wariness on the part of advocates who want to believe promised reforms will be made. They have been repeatedly disappointed by delays in the detention realm and a continued commitment to keep Secure Communities alive, a program that many believe undermines community safety and policing. A special task force voted out a series of necessary reforms and gave their report to Secretary Napolitano last September, but DHS has yet to announce how it will implement these recommendations.
Although these ongoing administrative reforms don’t fit tidily into the overarching vision of immigration policy the President laid out in the State of the Union, following through on them would have a lasting effect on both immigration enforcement and the consideration of benefits for those stuck in our broken immigration system. And the President shouldn’t abandon his larger vision. He has made significant strides in helping to reshape how people who don’t much care about immigration think about it and that will be critical when the time comes for comprehensive reform. But for those most directly affected by our immigration crisis, it is the most immediate details that matter most.
Photo by WhiteHouse.gov.
New Report Highlights Contributions of Immigrant Entrepreneurs to U.S. Economy
01 week ago
BY MARCIA HOHN, IMMIGRANT LEARNING CENTER
At last night’s State of the Union Address, two immigrant entrepreneurs were among the President’s guests—Japan-born Dr. Hiroyuki Fujita, founder, president and chief executive officer of Quality Electrodynamics (QED) in Cleveland, Ohio and Brazil-born Mike Krieger, co-founder of Instagram, a fast growing social mobile startup. Dr. Fijuita and Mike Krieger were rightfully recognized for their entrepreneurial drive and hard-earned success (both businesses are now worth millions of dollars), but they are just two examples of immigrants who came to this country and started businesses. There are many more unsung immigrant entrepreneurs whose U.S. businesses continue to create jobs for Americans and strengthen the U.S. economy.
Many are aware of the giants among immigrant entrepreneurs such as Sergey Brin of Google or Jerry Yang of Yahoo. But there is little recognition of the role important immigrant businesses play in neighborhood revitalization, growth businesses, and transnational businesses. A new report, Immigrant Entrepreneurs: Creating Jobs and Strengthening the Economy, released today by the Immigrant Learning Center, U.S. Chamber of Commerce and Immigration Policy Center highlights the vital role immigrant entrepreneurs play across the U.S. economy.
The report focuses on small businesses such as neighborhood storefronts—grocery stores, restaurants, gift shops and real estate firms—which make up the fabric of many neighborhoods. Immigrants are often attracted by low rents available in neighborhoods that have been blighted by economic decline. The arrival of their businesses revives commerce in these areas and provides needed goods and services for residents. As one immigrant storefront owner in Boston said:
Of course my business makes the neighborhood better. It makes this neighborhood more beautiful. The community ignored this neighborhood before. People did not want to move here because it was desolate and unsafe. Now, people want to come here.
The report also mentions growth businesses which, like many small businesses, often hatch from a living room or kitchen. The result of ambition, hard work and vision, these immigrant growth businesses have a strong presence in food and food distribution, transportation, leisure and hospitality as well as building services. One Boston-based entrepreneur, Jill Cheng, had a vision to bring Asia to the world. She began with a small collection of books in Chinese and Japanese, but with the explosion of business with China, her company (Cheng & Tsui Publishers) is now a multi-million dollar business.
Technology and science companies continue to be founded by immigrants at unprecedented numbers—leaping to 46% in venture-backed companies—as documented in a very recent study by the National Foundation for America Policy. These companies are keeping America on the cutting edge of innovation in technology and improving human health—as well as keeping America internationally competitive. Not only do these immigrant founders bring talent and skill but are also likely to have qualities such as a willingness to take risks, a deep appreciation for the opportunities that America gives them and perseverance. Sonny Vu from Vietnam and Sridhar Iyengar, 2nd generation from India, are convinced it was their immigrant backgrounds that made it possible for them to take an idea born in a cramped Boston apartment to a $20 million American company called AgaMatrix that manufactures mobile health monitoring devices.
Immigrant-run transnational businesses are also keeping the U.S. globally competitive. These are businesses that have a “foot in both worlds” and have a variety of business relationships here in the U.S. and their homelands that provide import-export, transfer of goods and remittances across countries or special goods for specific communities groups here and abroad. Transnational businesses also help America companies understand how to do business in other countries, build bridges of communication and bring diversity to the goods and services available in America.
Countless economists and business experts have highlighted the economic contributions of immigrant entrepreneurs to the U.S. economy. Now, it’s Congresses turn. National immigration policies must reflect the economic and social contributions of immigrant businesses and—equally important—that immigrant entrepreneurs come from all backgrounds.
New Report Finds that Immigration Creates U.S. Jobs
01 month ago
Immigration creates jobs for native-born Americans. That is the fundamental finding of a new study from the American Enterprise Institute and the Partnership For A New American Economy, entitled Immigration and American Jobs. The study—authored by Madeline Zavodny, a professor of economics at Agnes Scott College—reinforces the findings of numerous other studies which have demonstrated that there is no correlation between immigration and unemployment. Specifically, Zavodny analyzes Census data with the aim of answering one pivotal question: “In states with more immigrants, are US natives more or less likely to have a job?” Zavodny focuses on two groups in particular: immigrants with advanced degrees, and immigrants of any skill level who are in the country on temporary visas.
The four principal conclusions of Zavodny’s study are unequivocal:
- Immigrants who hold advanced degrees create jobs for native-born workers. The biggest job boost comes from those immigrants with advanced degrees from U.S. universities who work in the science, technology, engineering, and mathematics (STEM) fields. According to Zavodny, “data comparing employment among the fifty states and the District of Columbia show that from 2000 to 2007, an additional 100 foreign-born workers in STEM fields with advanced degrees from US universities is associated with an additional 262 jobs among US natives.”
- Both highly skilled and less-skilled temporary workers create U.S. jobs. Zavodny finds “that states with greater numbers of temporary workers in the H-1B program for skilled workers and H-2B program for less-skilled nonagricultural workers had higher employment among US natives.” Specifically, the addition of 100 H-1B workers was associated with an additional 183 jobs for native-born workers, while the addition of 100 H-2B workers was associated with an additional 464 jobs for native-born workers.
- Immigrants don’t take jobs away from native-born workers. According to Zavodny, there is “no evidence that foreign-born workers, taken in the aggregate, hurt US employment. Even under the current immigration pattern—which is not designed to maximize job creation, has at least eight million unauthorized workers, and prioritizes family reunification—there is no statistically significant effect, either positive or negative, on the employment rate among US natives.”
- The taxes paid by highly educated immigrants more than cover the cost of the benefits they receive. Zavodny finds that “in 2009, the average foreign-born adult with an advanced degree paid over $22,500 in federal, state, and Federal Insurance Contributions Act (FICA, or Social Security and Medicare) taxes, while their families received benefits one-tenth that size through government transfer programs like cash welfare, unemployment benefits, and Medicaid.”
According to Zavodny, the findings of her study suggest three reforms to the U.S. immigration system which would benefit the U.S. economy and native-born workers. First, she calls for a reorientation of permanent and temporary immigration policies to favor immigrants with advanced degrees from U.S. universities in STEM fields. Second, she advocates an increase in the number of “green cards” (permanent visas) available to highly educated immigrant workers. And third, she recommends an increase in the number of temporary visas for both highly skilled and less-skilled immigrant workers. Zavodny notes that these reforms would create new jobs while requiring “neither new taxes nor new spending cuts.”
Zavodny concludes that “immigration policy can, and should, be a significant component of America’s economic recovery.” Yet the reality is that even the most basic of immigration reforms are deadlocked in the U.S. Congress. And, while the United States dawdles, “the rest of the world competes for talent.” According to Zavodny, “every major developed country is more focused than the United States on admitting immigrants to meet economic needs.” In other words, whether they realize it or not, opponents of immigration reform are needlessly undermining the U.S. economy.
Photo by thekevinchang.
New Report Shows Immigrant Women Entrepreneurs Create Jobs and Contribute to Economy
02 months ago
Economists readily acknowledge the economic contributions of immigrant entrepreneurs to the U.S. After all, we wouldn’t have one-quarter of all public companies in the U.S.—companies like Google, Yahoo!, and Intel which employed 220,000 people and generated more than $500 billion in one year—without them. But lost in that acknowledgement are the contributions of immigrant women entrepreneurs who last year made up 40% (or 980,575) of all immigrant business owners in the U.S. This week, a new report, Our American Immigrant Entrepreneurs: The Women, takes a closer look at these women and examines the obstacles and pathways to establishing successful businesses—businesses that have created American jobs and generated millions in taxable revenue.
According to the report, there was a significant rise in immigrant women entrepreneurship over the last 10 years. According to the Census, 575,750 foreign-born women who immigrated as adults claimed to be self-employed in their own business as of 2000. Ten years later, however, that number has increased to 980,575 or 40% of all immigrant business owners in the U.S.
But that success isn’t always easy to come by. Of the immigrant women interviewed, many faced gender bias and difficulties securing start-up capital. Many women also reported that banks were hesitant to provide start-up funds due to the small size of their businesses. Yet, through their own determination and help from friends, associations, networks, colleagues and families, these women were able to establish successful businesses.
Maria Sobrino, for example, came to the U.S. from Mexico and started her own dessert company, Lulu Desserts. She noticed the absence of a Mexican comfort food, gelatinas or flavored gelatins, and began experimenting with samples. Due to difficulties securing capital, Sobrino had to start small and constantly reinvest in her business. “Do you know how many people laughed at my idea of having gelatinas and selling them with a little jar three hundred cups a day that I was doing?” Sobrino asked. “Today we sell about fifty million cups a year of gelatin, and we distribute to supermarkets.” Lulu Desserts currently generates $9.2 million and employs a host of marketing, sales, and delivery personnel.
Sheela Murthy, an immigration attorney from India and graduate of Harvard Law School, agrees that a passion to succeed was essential in establishing her own law firm—a firm which today generates $4-5 million a year and employs 70 people. Rubina Chaudhary, also of India, had trouble securing capital for her engineering management firm at first. Now, however, as president of MARRS Services, Inc., she manages multimillion dollar public contracts, employs 50 full time staff, and consults with large public and private clients.
These are just some of the many stories of immigrant entrepreneur women who, despite gender and racial discrimination, started their own businesses. And they want nothing more than to create an easier path for other immigrant women to do the same. They recommend easier access to start-up capital and federal loans for women- and minority-owned business, reform of bureaucratic hurdles, access to clearer information on state and federal regulations, and a continued discussion on how to address the barriers women face in the workplace.
In fact, making it easier for all entrepreneurs—including immigrant women—to start businesses which create American jobs, stabilize communities, and generate millions in taxable revenue seems like something every American would be wise to support.
Children of Immigrant Entrepreneurs Excel Educationally, Report Finds
02 months ago
The contributions of immigrant entrepreneurs—innovation, job creation and economic growth—are often cited by economists as strong reasons to reform our outdated immigration system. However, the kids of immigrant entrepreneurs receive relatively little attention. Delving into the experiences of these adult children of immigrants provides a new lens through which to witness the struggles and triumphs of parents and their children as they pursue the American Dream.
A new report by the Immigrant Learning Center (ILC) puts a human face on the children of immigrant entrepreneurs. Adult Children of Immigrant Entrepreneurs: Memories and Influences shares the stories of 36 children of immigrants representing a wide variety of countries of origin and family businesses. Some were born in the U.S. and others immigrated here in childhood. While their stories differ, they all have one thing in common: their immigrant entrepreneur parents and experiences growing up around the family business heavily influenced their desire to pursue an education and the American dream.
All of the young adults interviewed witnessed firsthand their parents’ struggles as they integrated into their new home in the U.S., ingraining them with a strong work ethic. They spent long hours along side their parents in their place of business. While most gained valuable experience taking on various activities, many parents shielded their kids from manual labor, encouraging them instead to interact with customers, keep the books, or other business-related tasks. Because they often had better English language skills than their immigrant parents, many of them served as de facto language brokers. Spending time working alongside their parents provided them with valuable business and social skills, giving them the confidence that allowed them to excel in school.
Pen Khek Chear, whose parents came to the US as Cambodian refugees, said:
“My dad did not want to teach me to be a jeweler [like him] because he was afraid I would like it. My parents wanted me to get an education and be a ‘respectable professional’ and not have to do ‘hard labor.”
Pen obtained a Master’s in Social Work from Boston University.
Because of their own struggles, education is very highly valued by immigrant entrepreneur parents, and the young adults interviewed had achieved high education levels. Many of the people interviewed had pursued graduate school after graduating from college. They related how their immigrant parents wanted them to excel educationally, get good, stable jobs, and live more comfortable lives than their parents had. The kids recognized that their parents had performed difficult manual labor, and had sacrificed their weekends and worked all the time so that they could pursue higher education. ILC found that “there is an inherent appreciation among the adult children of immigrant entrepreneurs for the sacrifices their parents made to ensure that they have successful careers and lead normal lives in their adopted homeland.”
Like many American families, the immigrant entrepreneurs highlighted in this study want their children to excel and have opportunities that they themselves did not have. While their children may not always get along with their parents, they recognize the tremendous sacrifices their parents have made for them. Not only did the young adults interviewed excel in school and in their careers, but they also chose careers that allow them to give back to the community. The American Dream is alive and well in these immigrant families.
Photo by leungchopan.
Report Debunks Myth that High-Skilled Immigrants Steal American Jobs
02 months ago
It is an article of faith among anti-immigrant activists that immigration results in fewer jobs and lower wages for native-born workers. For instance, the Federation for American Immigration Reform (FAIR) recently released a report in which it claims that native-born workers with science and engineering (S&E) degrees are being driven en masse into non-S&E occupations due to competition from foreign-born workers willing to accept lower wages. However, in its rush to blame immigrants, FAIR misses a highly salient detail: a growing number of jobs in non-S&E occupations require or reward S&E skills. In other words, native-born workers with S&E degrees aren’t being driven out of S&E occupations by immigrants; they are being lured into non-S&E occupations where their S&E skills are in high demand and command higher salaries.
These are among the findings of a report released last month by Georgetown University’s Center on Education and the Workforce. The report, entitled STEM, presents a comprehensive analysis of Science, Technology, Engineering, and Mathematics (STEM) occupations in the United States that is a far cry from the grim portrait painted by FAIR. Where FAIR sees an immigration-induced glut of S&E workers who earn low wages, the authors of the Georgetown report see just the opposite. According to the report: “High and rising wage premiums are being paid to STEM workers in spite of the increasing global supply. This suggests that the demand for these workers is not being met.”
Moreover, this demand is not only coming from industries that traditionally hire STEM workers. It’s coming from industries like Professional and Business Services, Healthcare Services, Advanced Manufacturing, Mining, and Utilities and Transportation. Employers in these industries are willing to pay top dollar for workers with STEM backgrounds, which has the effect of “diverting” many STEM graduates into non-traditional career paths.
According to the Georgetown report, native-born STEM graduates are the most likely to be “diverted” into non-traditional career paths for a variety of economic, social, and cultural reasons. And this “diversion” of native-born STEM graduates “will continue and likely accelerate in the future.” As a result, there is likely to be “an increasing reliance on foreign-born STEM talent among American employers.” But this is a reflection of high labor demand, not low demand, as FAIR would have us believe.
The findings of the Georgetown report cast serious doubt upon those of the FAIR report. It would seem that FAIR is misreading the nature of the S&E, or STEM, workforce. Native-born S&E workers and recent graduates are moving into non-traditional industries because S&E skills are valued by so many different employers. In other words, they face a wide range of opportunities, not a shortage of options.
Even Facebook Feels Brunt of Broken U.S. Immigration Policy
02 months ago
You know things are bad when a company as popular as Facebook has problems finding qualified talent. In a recent interview, Facebook’s chief operating officer, Sheryl Sandberg, remarked that our outdated immigration policy is a big reason Silicon Valley tech companies are fighting each other for highly skilled workers. Current immigration policy limits high-skilled worker visas (H-1B) to only 65,000 per year—a number that hardly meets demand. Even technology giant Microsoft recently testified before Congress that current immigration policies make finding talent a serious challenge. Until lawmakers revamp our outdated immigration system, technology companies like Facebook and Microsoft will continue to lose out on the foreign talent they need to stay ahead of the curve.
It doesn’t help that the U.S. sends home the best and the brightest foreign students, many of whom create their own companies that compete with the U.S. Instead, Sandberg argued, American universities should attach visas to every high tech diploma so they can stay here and create businesses that employ American workers.
Critics of immigration reform complain that U.S. companies shouldn’t be recruiting foreign-born workers when we have such a high unemployment rate, but economists consistently show that that highly skilled foreign born workers do not take jobs away from Americans. They create jobs for other Americans.
According to the National Foundation for American Policy, “for every H-1B position requested, U.S. technology companies increase their employment by 5 workers,” on average, the following year. For technology companies with fewer than 5,000 employees, “each H-1B position requested in labor condition applications was associated with an increase of employment of 7.5 workers.”
Highly skilled foreign-born workers also contribute to U.S. innovation and growth. According to the Harvard Business School, the H-1B visa program “has played an important role in U.S. innovation patterns” over the past 15 years. Data shows that the number of inventions, as measured by patents, has increased when H-1B caps are higher due to “the direct contributions of immigrant inventors.”
Without this talent, American companies are at a serious disadvantage. As a Microsoft executive said in a recent hearing:
Our continued ability to help fuel the American economy depends heavily on continued access to the best possible talent … We need to be able to attract—and have adequate access through the immigration system to—skilled workers from abroad.
Despite overwhelming evidence that highly skilled foreign-born workers create jobs for American workers, add to U.S. innovation and growth and keep American companies competitive in the global marketplace, little about our employment-based immigration system has changed in the last twenty years. The cap on employment-based visas was set by Congress without regard to real labor needs or the flexibility to conform to our evolving economic reality. Although Congress and the Administration acknowledge the need to attracted foreign-born talent, no major adjustments to the overall number of available visas have been made.
Until the U.S. makes significant strides towards reforming employment-based visa policies and our entire outdated immigration system, U.S. companies will continue to lose their competitive edge as highly skilled foreign-born workers migrate to more immigrant-friendly countries to start businesses—taking their talent and potential contributions to U.S. economic growth with them.
Photo by techxav.
Dayton, Ohio Passes Plan to Revitalize Economy through Immigrant Integration
03 months ago
Shortly after Alabama began implementing their anti-immigration law (HB 56), Dayton, Ohio passed legislation that welcomes and integrates immigrants with the hope that they will revitalize their slowing economy. Faced with a declining population, Dayton’s City Commission voted unanimously last week to adopt the Welcome Dayton Plan—a plan that is tapping into the very economic stimulus that Alabama is driving out.
The Welcome Dayton Plan focuses on four aspects crucial to attracting and integrating immigrants—business and economic developments, increased government participation, improved access to health services, and involvement in the culture, arts, and educational opportunities. Specifically, the Welcome Dayton Plan seeks to:
- Create an inclusive community-wide campaign around immigrant entrepreneurship that facilitates startup businesses, opens global markets and restores life to Dayton neighborhoods.
- Offer language services to access government and health services, and educate immigrants about government participation and laws.
- Issue “municipal identification cards for community residents who are not eligible for any other accepted identifying document.”
- Advocate for immigrant friendly laws at the state and federal levels through the City and County lobbying efforts.
By welcoming immigrants, Dayton expects to grow their local economy, increase the number of small business and integrate immigrants into their communities—a far cry from the current chaos in Alabama. In a survey leading up to the plan, officials asked residents how the arrival of immigrants has impacted Dayton. The response? “Businesses were started. Jobs were created. Houses were rehabilitated. Underused buildings were reused and rejuvenated.”
Dayton City officials based the plan on nation-wide studies that show immigrants create new businesses and complement the American workforce. For example, a White House report noted that immigrants started 25% of the highest growth companies between 1990 and 2005, companies which supported 220,000 jobs in the U.S. and generated $67 billion in U.S. business income. A Brookings Institute study also indicated that “U.S. global competitiveness rests on the ability of immigrants and their children to thrive economically and to contribute to the nation’s productivity.” Dayton officials have done their homework and are not acting in response to fear. Rather, they are building a plan based on economic facts.
Alabama, on the other hand, has voted to alienate immigrants through harsh enforcement policies that drive out those who add to their economy. The Welcome Dayton Plan, however, recommends that police perform immigration status checks only for the suspects of serious crimes. According to a CNN report, “such a policy could protect undocumented immigrants stopped for minor offenses from fearing deportation.”
According to the Dayton Daily News, city residents, business owners, and scholars support the plan. University of Dayton professor Linda Majka summed up Dayton’s attitude well: “One reason the American Dream is still alive is that people keep coming to us who believe in it. Dayton has the opportunity to get this right.”
Photo by joe gauder.
Declining Cities Look to Immigrants to Revitalize Economies and Increase University Enrollment
04 months ago
In a recent speech to the U.S. Chamber of Commerce, New York City Mayor Michael Bloomberg highlighted the vital role immigrants play in stimulating economic growth. Bloomberg called for immigration policies that “spur innovation, increase the number of entrepreneurs who start businesses here, and create jobs for Americans on every rung of the economic ladder.” With U.S. unemployment still hovering around 9%, some declining U.S. cities are also looking to harness the economic and entrepreneurial power of immigrants. Small towns, particularly in America’s rust belt, are contemplating programs that attract immigrant growth in hopes of revitalizing their towns and universities.
Take Dayton, Ohio, which is facing its lowest population level since 1920. State legislators are voting this week on whether to pursue the “Welcome Dayton Plan”—a new campaign designed to encourage immigration and economic growth. The plan includes the expansion of integration services, like interpretation services at city departments, as well as public events geared toward immigrants. Tom Wahlrab of Dayton’s Human Relations Department believes the city should welcome such a campaign.
“I believe the city of Dayton is at a crossroads,” said Wahlrab, according to the Dayton Daily News. “We can either welcome them, help integrate them, help them on the path to citizenship, or we can let old stereotypes and fears and preconceptions hinder our success.”
Ohio isn’t alone. Over a decade ago, Iowa faced a declining population and passed proposals to make Iowa an “immigration enterprise zone.” According to the New York Times, “in recent years, immigrants from Bosnia, Sudan, and especially Mexico have been the only reason Iowa’s population has had any net growth.”
These new immigration initiatives also focus on increasing college and university enrollment. In early 2011, Michigan’s governor organized a program called “Global Michigan,” an effort to target international students and skilled immigrants in response to population decline. And for good reason. Back in 2002, the struggling mill town of Lewiston, Maine saw the influx of roughly 3,500 Somali immigrants—a population who not only opened new businesses and contributed to the local economy and job growth, but increased university enrollment by nearly 16% from 2002 to 2007.
As small towns across America continue to face high unemployment rates, sluggish economies and decreasing populations, campaigns that welcome and integrate immigrants rather than drive them away may result in the new business, job and economic growth these declining cities so desperately need.
Photo by Brandon Florkey.
Immigrant Laborers Continue to Strengthen American Workforce, Economy
05 months ago
This Labor Day, we reflect on the many contributions workers make to the U.S.—including those of immigrant workers. While immigration restrictionists have long tried to demonize immigrant workers and blame them for high unemployment rates and other economic woes, the facts make it clear that immigrants actually create jobs and businesses and boost the wages of native-born workers. Research shows time and time again that immigration levels are positively correlated with economic output and growth.
According to the Fiscal Policy Institute, economic growth of the top 25 metropolitan areas and growth in the immigrant share of the workforce are closely connected. In the period studied, from 1990 to 2006, Phoenix, Dallas, and Houston saw the fastest growth in immigrant share of the labor force and had well above-average economic growth. The three metropolitan areas with the slowest economic growth—Cleveland, Pittsburgh, and Detroit—had among the smallest increases in immigrant share of the labor force.
Immigrants add to the economy in a number of ways:
- They increase the overall number of workers, which makes the economy larger and increases gross domestic product (GDP).
- They complement the U.S. workforce which today is older and more educated than ever before. Immigrant workers tend to be concentrated at the top and the bottom of the educational scale, while most Americans fall somewhere in the middle. In other words, immigrants and native-born workers have different levels of education, work in different occupations, and live in different areas of the country.
- Immigrant workers spend their wages in U.S. businesses—buying food, clothes, appliances, cars, etc.—which sustains the jobs of the workers employed by those businesses. Moreover, businesses respond to the presence of new workers and consumers by investing in new restaurants, stores, and production facilities. The end result is more jobs for more workers
- Finally, immigrants are entrepreneurial and more likely than natives to start their own businesses. According to a report from the Kauffman Foundation, “immigrants were more than twice as likely to start businesses each month than were the native-born in 2010.”
Contrary to what many Americans believe, there is no evidence that immigrants work and contribute at the expense of wages for native workers. In fact, a February 2010 report from the Economic Policy Institute (EPI) finds that the “effect of immigration from 1994 to 2007 was to raise the wages of U.S.-born workers, relative to foreign-born workers, by 0.4% (or $3.68 per week).” Even the small (and shrinking) number of “U.S.-born workers with less than a high school education saw a relative 0.3% increase in wages (or $1.58 per week)” as a result of immigration during this period.
This isn’t to say that the current system functions perfectly—far from it. The employment-based immigration system created in 1990 hasn’t been updated for 21 years, and the antiquated and burdensome laws and regulations make it difficult for foreign workers to immigrate to the U.S. There is evidence that more and more highly-skilled immigrant workers and entrepreneurs have decided to take their investments and skills to other countries that offer more attractive incentives.
This Labor Day, it’s important to think about how immigrants have and continue to contribute to our economy, but also about how our immigration system needs to change if America is to remain competitive in the global economy in the long run.
Photo by wallyg.