ARBOR WEALTH: Huddled masses: The power of immigrant entrepreneurs
Our son’s college roommate’s family is from India, where the boy’s father attended medical school. The doctor and his wife immigrated to the U.S., where he now practices and provides employment for others. His wife is an accountant. Both pay into Medicare and Social Security and both pay income taxes. The doctor pays business payroll and unemployment insurance taxes as well. The couple also paid tuition bills to American universities. My son’s roommate is also becoming a physician and the young man’s brother an engineer.
Immigration is a fascinating and controversial issue, fraught with economic overtones. Various regions of the country harbor different feelings about immigration, depending on their local experiences. Current studies show that immigrants, owing to their entrepreneurial efforts, are serving as significant job creators in the modern American economy.
My own mother and father are classic examples of immigrant entrepreneurs. Born and raised in Limerick and Dublin, Ireland, respectively, they immigrated separately to Canada, met and married, and settled in Chicago. My father labored with the carpenter’s union. My mother originated several successful businesses.
My parents bought property in and eventually moved to Florida, where they opened an Irish import business. The enterprise provided gainful employment for many and is still in operation. They paid into Medicare and Social Security, paid payroll, corporate and income taxes, and as consumers, were contributors to our country’s GDP.
Theirs is not an unusual story. In fact, according to a study by the Fiscal Policy Institute, it’s becoming even more common today. The study reveals that the immigrant share of U.S. small businesses has risen from 12 to 18 percent in the last 20 years.
“That translates into more than one in six small business owners in the U.S. being immigrants,” says Mark Koba, a senior editor at CNBC.com, “even though they make up just 13 percent of the overall population.”
“It’s not that they are ‘super entrepreneurs’ or anything, but they do come here as risk takers as they pull up roots from their own country and look for a fresh start,” says David Dyssegaard Kallick, senior fellow at the Fiscal Policy Institute and main author of the report.
“With immigrant business ownership come jobs and income,” says Koba.
Naveen Jain, a native Indian who came to the U.S. in 1983 and started several companies, including Infospace, agrees wholeheartedly. “The popular belief is that immigrants, legal or otherwise, take away American jobs. They really don’t,” Jain argues. “They create jobs and make the economy bigger.”
“An estimated 4.7 million U.S. workers are employed by immigrant-owned firms gathering some $776 billion in revenues, according to the most recent figures in the FPI report,” says Koba. He lists “Mexico, India, South Korea, Cuba, China, Vietnam, Canada and Iran” in that order, as the countries supplying the largest number of U.S. immigrant owned businesses.
Most immigrant-owned businesses are in the professional and business sector, followed by retail and construction, educational and social services and leisure and hospitality. Koba mentions restaurants, real estate firms, grocery stores, and physician’s offices as the most common type of enterprises. Examples of each genre are integral to our local business culture, from the Destin Commons to the far reaches of 30A.
According to Koba’s research, the U.S. allows some 140,000 immigrants into the U.S. each year for permanent residence. But a Duke University study says there may be as many as a million immigrants “waiting for visas that would allow them to stay” and become “business owners and workers.”
Immigrants certainly do compete for American jobs. And illegal immigration is problematic in certain regions of the U.S. What we are witnessing, though, with America’s relatively welcoming immigration policy, is the creation of more jobs through entrepreneurial enterprises than are lost through traditional competition. The numbers indicate that more and not less legal immigration may be a factor in building economic wealth in the future.
Equally as important is the fact that immigrants who become citizens and business owners, through contributions to Medicare and Social Security, help fund these programs for U.S. retirees.
Studies of Japan’s economy point to its strict immigration policy as one of the largest impediments to economic growth, especially when combined with an aging population.
Margaret R. McDowell, a chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (850-608-6121~www.arborwealth.net), a fee-only registered investment advisory firm located near Sandestin.