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Immigrants – Creating the Jobs Americans Want to Do

March 05, 2010 - Posted by Maurice Belanger


The Christian Science Monitor the other day published a story, "Who's creating US jobs? Mexicans."  The story noted an increase in Mexican entrepreneurs coming to the U.S. in order to escape drug cartel violence and kidnapping.  There are special visas available to immigrant entrepreneurs willing to come to the U.S. to create jobs.  In the last decade, there has been a steady increase in the number of Mexicans who have been transferring their businesses here, buying and renovating businesses here, or starting new ones.

In the immigration debate, we hear a lot (from anti-immigrant groups) about immigrants "taking" American jobs.  Not enough is said about immigrant entrepreneurs and the jobs they create for Americans.

Each year, the Kauffman Foundation puts out an Index of Entrepreneurial Activity. The index "is a leading indicator of new business creation in the United States." 

Their latest, the Kauffman Index of Entrepreneurial Activity, 1996-2008, reveals some important "shifts in the demographic and geographic composition of new entrepreneurs across the country."  

For a number of years, researchers have found that immigrants have a greater rate of entrepreneurial activity than the native-born.  According to the latest Index, the difference between immigrant and native-born entrepreneurial activity is growing.

The immigrant rate of entrepreneurial activity increased from 0.46 percent in 2007 to 0.51 percent in 2008, further widening the gap between immigrant and native-born rates. Native-born rates increased only slightly, from 0.27 percent to 0.28 percent.

The increase in entrepreneurial activity among immigrants in 2008 from the year before, the report notes, is driven by startups in “low- and medium-income-potential” types of businesses, such as grocery stores, child care services, and restaurants.  However, the report notes that immigrants are “also more likely to start high-income-potential types of businesses than the native born.”  That list includes various types of manufacturing, wholesalers, and medical and legal services. 

Looking at ethnic groups, in 2008 Latinos (.48 percent) and Asians (.35 percent) had a higher rate of entrepreneurship than non-Latino whites (.31 percent).  The report also notes that it doesn’t take a college degree to start a business.  In fact, 

While business-creation rates increased for less-educated individuals, the college-educated experienced a decline in entrepreneurial activity rates, from 0.33 percent in 2007 to 0.31 percent in 2008.

The Kauffman report and others such as this one from the Immigration Policy Center estimating that comprehensive immigration reform will boost our economy by $1.5 trillion over ten years, make it increasingly clear that, as we grapple with ways to pull out of the current economic slump, immigration reform must be part of the solution.

Photo by Flickr user Sugi

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