Studies find immigrants essential to filling Minnesota jobs

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When it comes to workforce replenishment, immigrants are not only important: they are essential. That’s the conclusion of several studies, with findings that challenge a common perception that immigrants are stealing jobs from U.S.-born citizens at a time when jobs are scarce.

Based on figures from State Economist Tom Stinson and State Demographer Tom Gillaspy, a 2009 report produced by the Minnesota Chamber of Commerce and other members of the Minnesota Business Immigrant Coalition, explains that, “Unlike native-born Americans, who are aging rapidly and creating what some have called a ‘silver tsunami,’ immigrants are generally in their prime working years when they come to the United States, thus providing a crucial infusion to the work force.” The report adds that without new, young workers, “certain sectors of the economy will continue to contract.”

“Obviously, one of the ways to increase the size of our future workforce is to welcome and educate young immigrants coming to our region,“ writes Craig Helmstetter, a Wilder Foundation researcher, in Immigration In the Twin Cities: 10 Things to Know.

There are several far-reaching implications if the workforce is not replenished. According to A New Age of Immigrants: Making Immigration Work for Minnesota, a study commissioned by Wilder and the Minneapolis Foundation, “Many policymakers and economists warn that the entitlement systems of Medicare and Social Security will topple and fall if they are not supported by the labor of younger workers, both immigrants and native-born alike.” The League of Minnesota Cities points to National Research Council and Social Security Administration reports, both of which show that younger immigrants “have a positive impact on the financials of government programs, including Social Security.”

Facts and figures illustrate immigrants’ impact on the state’s economy

  • In southwest Minnesota alone, Latino workers generated about $45 million in state and local taxes in 2000.
  • Immigrants owned approximately 3 percent of Minnesota’s businesses in 2002, with annual sales exceeding $2 billion.
  • As of 2002, 138 immigrant-owned businesses had created 386 new jobs, and spent $5.6 million on payroll, rent, supplies and other expenses.
  • Asian Americans and Latinos in Minnesota account for approximately $7 billion in purchases annually.
  • Latinos add nearly $500 million to the economies of south-central Minnesota, through their labor force contributions, their spending as consumers, and the increased demand by employers for regionally supplied goods and services.

Source: A New Age of Immigrants: Making Immigration Work for Minnesota, a study commissioned by the Amherst H. Wilder Foundation and the Minneapolis Foundation, 2010.

“On net,” a study commissioned by the Federal Reserve of San Francisco concludes, “immigrants expand the U.S. economy’s productive capacity, stimulate investment, and promote specialization that in the long run boosts productivity.” The Fed adds that, “Consistent with previous research, there is no evidence that these effects take place at the expense of jobs for workers born in the United States.”

As a result of such findings, many analysts find it encouraging that the region’s immigrant population is not only growing, but growing rapidly, at ten times the rate of the native-born population. More than 130,000 new immigrants came to Minnesota between 2000 and 2009, from every corner of the globe. Somalia, Ethiopia, and Mexico were the three largest sources.

Compared to immigrants of the late 19th and early 20th centuries, the Minnesota League of Cities points out, today’s immigrants are learning English faster, and are less likely to return to their country of origin.

Significantly, immigrants coming to Minnesota tend to be well-suited for the types of jobs that most need filling. People born in the U.S. either have too much or too little education to meet urgent workforce demands. On the one hand, those with higher levels of education are unwilling to take low-wage, low-skill jobs. On the other hand, there are not enough native-born workers with advanced degrees to fill professional health care, engineering, and high tech positions. Because immigrant workers are concentrated at the very-low and very-high skills end of the spectrum, they fill the gap, according to Wilder’s research.

Findings published by Wilder and the Minneapolis Foundation reveal that regional economic benefits of immigration outweigh costs by a ratio of two to one. Pointing specifically to the amount of net income immigrant-owned businesses generate for the state, the Minnesota Department of Employment and Economic Development concludes that those businesses “not only benefit the local community, but are a source of economic growth.” In part this is because immigrants are almost twice as likely to start a business as native-born Americans.

So what would happen if immigrants suddenly disappeared? The Minnesota Business Immigrant Coalition says that by one estimate, the state would lose over 24,000 permanent jobs and $1.2 billion in personal income. In its view, anything that shrinks the number of immigrants is detrimental to the economy.

“The question that the state of Minnesota and the nation should be addressing is what will be done if economic conditions and harsh immigration policies further reduce the number of foreign-born workers.” Citing “dire consequences,” the Minnesota Chamber of Commerce has become a staunch advocate of comprehensive reform.

The Chamber and fellow Coalition members have called for increases in visas to match the demand for labor, and a path to legalization for those who remain undocumented. The Coalition has also cited “a critical need for local efforts that insure the full social and economic integration of immigrants.” Primary among the efforts called for are state-sponsored initiatives to improve high school graduation rates for immigrant youth, and employer-sponsored programs that provide opportunities for job training and advancement. “Absent such educational initiatives, immigrant youth will be unprepared to fill the jobs of retiring, native-born workers.”

To those who charge that such initiatives are cost prohibitive, the Coalition responds that immigrants are most “costly” when they first arrive, or—like U.S.-born residents—when they are in school or retire. “Analyses that focus exclusively on short-term costs greatly underestimate the fiscal benefits and the fact that, over the course of their lifetimes, immigrants provide a net benefit to state and national economies.” Economic contributions increase as immigrants gain experience and earn higher wages, which in turn translates into higher levels of consumer spending and taxes.

Across the state, immigrant workers have proven to be crucial to the survival and vitality of communities, observes Minnesota Compass. “Particularly in smaller communities, the arrival of new immigrant families has helped to prevent the closing of some schools due to dwindling numbers and also has helped to reinvigorate main streets through new businesses.”

Taxes paid, jobs created, and consumer dollars spent are all quantifiable. However, the Chamber of Commerce and its partners stress that with diversity come a number of less tangible, but equally important benefits of immigration. “Diversity in the labor force, in our communities, and in our schools brings energy, ideas, and skills that spark innovation and that will help Minnesotans prepare to live in a globalized world.”

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