‘Immigrants Drive Economic Progress’

The U.S. must fix the “broken immigration system” to allow small businesses — about 25 percent of all enterprises and sparked by entrepreneurial newcomers — to thrive.

Kathy Ko Chin, CEO and president of the Asian & Pacific Islander American Health Forum, is a graduate of the Harvard School of Public Health and Stanford University. 
National Journal
Kathy Ko Chin
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Kathy Ko Chin
Dec. 26, 2013, midnight

From New York to Miami to Los Angeles, it is clear that Amer­ica’s demo­graph­ics, spurred in sig­ni­fic­ant part by im­mig­ra­tion, are rap­idly chan­ging. With an im­mig­rant pop­u­la­tion of 40 mil­lion — and grow­ing — the U.S. must do more to sup­port im­mig­rant-owned small busi­nesses.

Im­mig­rants and eco­nom­ic growth go hand in hand. It is a stat­ist­ic­al truth that im­mig­rants drive eco­nom­ic pro­gress. Even the liber­tari­an Cato in­sti­tute and Grover Nor­quist of the con­ser­vat­ive Amer­ic­ans for Tax Re­form agree: Im­mig­rants boost Amer­ica’s eco­nomy in tan­gible and sub­stan­tial ways. They add to the labor force, cre­ate jobs, re­vital­ize oth­er­wise shrink­ing cit­ies, and bol­ster hous­ing prices.

Im­mig­rant-owned and -op­er­ated small busi­nesses ex­em­pli­fy this eco­nom­ic vi­tal­ity. Im­mig­rants are twice as likely to start busi­nesses than their U.S.-born neigh­bors. They run nearly one in five small busi­nesses and are re­spons­ible for more than 25 per­cent of all new busi­ness cre­ation and re­lated job growth. They come with the age-old Amer­ic­an Dream and a pas­sion for suc­cess. Un­like lar­ger busi­nesses, they start small, of­ten pool­ing per­son­al and fam­ily sav­ings to open shop.

In city after city, grow­ing im­mig­rant com­munit­ies have sparked re­vital­iz­a­tion and en­riched loc­al cul­ture. Ac­cord­ing to the Great­er Clev­e­land Refugee Ser­vices Col­lab­or­at­ive, new refugees in Clev­e­land gen­er­ated $2.7 mil­lion in taxes to boost loc­al gov­ern­ment and cre­ated 650 jobs — a ma­jor con­tri­bu­tion that has helped the city sur­vive dur­ing tough eco­nom­ic times.

In Lewis­ton, Maine, an in­flux of roughly 3,500 Somali im­mig­rants brought with them new busi­nesses and in­creased uni­versity en­roll­ment by nearly 16 per­cent. The story in Phil­adelphia is sim­il­ar, with im­mig­rants re­vital­iz­ing the city by open­ing busi­nesses in low-in­come areas. For­eign-born new­comers are re­spons­ible for a whop­ping 75 per­cent of Phil­adelphia’s labor-force growth since 2000.

The in­flux of im­mig­rants comes at an op­por­tune time as many cit­ies are still re­cov­er­ing from the 2008 re­ces­sion. They bring much-needed cap­it­al and help grow the pop­u­la­tion. Giv­en that for every 1,000 im­mig­rants who move to an area, the U.S.-born pop­u­la­tion grows by 270, it’s no won­der that cit­ies such as St. Louis are work­ing to at­tract im­mig­rants of all skill levels.

The be­ne­fits are huge and, with 30 per­cent of small-busi­ness growth in the past 20 years driv­en by im­mig­rants, only slated to grow more.

Un­for­tu­nately, polit­ics could pre­vent Amer­ica from real­iz­ing the full con­tri­bu­tions of im­mig­rants.

What the fu­ture brings de­pends on fed­er­al policies, par­tic­u­larly real im­mig­ra­tion re­form. Con­gress is un­sur­pris­ingly at an im­passe, and the choice is really in the hands of the House: to act or not act in the face of grow­ing mo­mentum for change around the coun­try.

So how can we help small busi­nesses thrive?

First, fix our broken im­mig­ra­tion sys­tem to at­tract new en­tre­pren­eurs and star­tups in­stead of driv­ing them away. Re­form must in­clude more visas for spe­cial­ized work­ers and policies that re­tain for­eign-born U.S. gradu­ates so they can start busi­nesses and in­vest in their loc­al com­munit­ies.

Then, lastly, any re­form ef­forts should pro­mote fam­ily unity and not dis­mantle ex­ist­ing fam­ily im­mig­ra­tion cat­egor­ies. For ex­ample, keep­ing fam­il­ies to­geth­er — in­clud­ing sib­lings and chil­dren — cre­ates stronger fam­il­ies that, in set­tling in the U.S., provide great­er re­sources to start busi­nesses in­volving fam­ily or oth­ers in their lar­ger com­munit­ies.

Of course, get­ting here is not the whole battle. Faced with health in­sur­ance premi­ums that are of­ten 18 per­cent high­er than lar­ger busi­nesses, many small em­ploy­ers want to but can­not af­ford to of­fer cov­er­age.

The pic­ture in Cali­for­nia, which has the highest con­cen­tra­tion of small busi­nesses, is par­tic­u­larly telling. Nearly two-thirds of small busi­nesses in the state don’t of­fer cov­er­age, and a re­cent sur­vey of Asi­an-Amer­ic­an small-busi­ness own­ers and em­ploy­ees found that al­most one-third were un­in­sured, a sig­ni­fic­antly high­er rate than work­ers at lar­ger busi­nesses.

The Af­ford­able Care Act of­fers a res­pite for many small-busi­ness own­ers by of­fer­ing them more cost-ef­fect­ive health in­sur­ance op­tions. The law al­lows them to com­pete for bet­ter plans and prices, just as lar­ger busi­nesses al­ways have done, and provides new tax cred­its to re­duce cost.

Im­mig­ra­tion re­form and solu­tions to small busi­nesses’ health care woes, however, are only part of the equa­tion. To re­spond to the 21st cen­tury eco­nomy and demo­graph­ics, we must fully har­ness the eco­nom­ic po­ten­tial im­mig­rants of­fer. Do­ing so re­quires policies that be­ne­fit not only new Amer­ic­ans but the na­tion over­all, and a com­mit­ment to in­vest­ing in im­mig­rant small busi­nesses.

Kathy Ko Chin is pres­id­ent and CEO of the Asi­an & Pa­cific Is­lander Amer­ic­an Health For­um, a na­tion­al health-justice or­gan­iz­a­tion that works to im­prove the health of Asi­an-Amer­ic­ans, Nat­ive Hawaii­ans, and Pa­cific Is­landers.

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