Immigrants will be key to our economic recovery
The novel coronavirus, undeniably, is a human tragedy. In response, the Trump administration halted all immigration recently, suspending almost every visa program, to stave off “risk to the U.S. labor market during the economic recovery following the COVID-19 outbreak.” Yet, all economic data would indicate that these very immigrants are key to how we rebuild cities and communities.
As businesses shutter and a record 42 million have filed for unemployment, immigrants have been revealed as the linemen, with an estimated 6 million taking care of patients or delivering our groceries.
The scale of immigrant participation — and their economic precariousness — is compounded by the fact that small businesses are the real job creators, comprising 99.7 percent of U.S. employer firms. Immigrants are behind many of them, and it’s impossible to rebuild without them.
Effectively, the most entrepreneurial group in America wasn’t born here. According to the Historical Kauffman Index, immigrants are twice as likely to start a business compared to someone born in the United States. This also means they generate jobs. Each immigrant-founded company valued at more than $1 billion created at least 760 jobs. Back in 2007, all immigrant businesses’ payroll totaled a sizable $127 billion.
Foreigners have always been disproportionately entrepreneurial. According to Peter Vandor and Nikolaus Franke, researchers at the Vienna University of Economics and Business, this drive is born in part from cross-cultural experiences that stem from encountering new products, services, challenges and communications strategies.
I echo this from my vantage point as a political refugee who emigrated twice — first from Cuba and years later, from Mexico — as well as an organizational psychologist. As the head of CIC Miami, I have seen how companies across sectors thrive through immigrant power, whether it’s because of their funders, founders, staff or customers. My last decade identifying, planning and deploying economic development drivers in the United States and Latin America has shown how diversity enhances resilience.
Without question, COVID-19 has reopened wounds of the 2008 economic crisis. As Anneken Tappe, of CNN Business, said, the pandemic stings “because it wiped out nearly a whole decade of job gains in just two months.” To put this into greater context, 2020 will be the first time this century that the number of poor people will rise.
This is where immigrantpowered businesses come in.
Ingenuity and crosscultural growth mindsets, which are intrinsic to the immigrant entrepreneur’s ethos, will be essential to restarting our economy. This is part of America’s exceptionalism if not, in fact, its main driver.
The past two decades have been marred in hyper-politicized debates about immigrant labor as inequality gaps get bigger nationally, precluding us from widening our framing.
When we say this is a nation built by immigrants, it’s not an allegory; it’s ubiquitous throughout our history. During the Mass Migration of the 1800s, the immigrant population quadrupled. Economists have tracked the long-term effects, proving that, compared to places in the United States that didn't take in as many immigrants, salaries were 20 percent higher overall for the following 200 years and well into our lifetimes, the year 2000.
More recently, between 2007 and 2011, foreignborn entrepreneurs and the jobs they created were instrumental in recovering from the Great Recession. Immigrant-owned businesses generated more than $775 billion in sales and $109 billion in income in 2010. What’s more, they outpaced the increase in business income generated by native-owned firms, whose 14 percent rise in income failed to eclipse the rate of inflation.
While advocates believe fixing the immigration system may be a departure point, there are other valid considerations. Fomenting new public-private partnerships that give smaller players a central role, facilitating access to credit and alternative financing for small businesses, and providing shared services must all form part of a cohesive strategy.
Our world has changed. The pandemic has made that clear. In order to rebuild the economy, this can no longer be a conversation solely about the representation of immigrants nor the challenges of small businesses dissociated from the reality that many are immigrant owned or operated.
Our economic prosperity cannot be decoupled from a thorough acknowledgment of our identity, beyond partisan discourse, as a nation underpinned, in sizable ways, by immigrants.
To wrangle the threats posed by the coronavirus, we Americans need to do more than secure our own safety or get back to work; we must start by looking at ourselves in the mirror.