Last night’s State of the Union, as well as the rebuttal, spoke to a bilateral desire to achieve immigration reform. As legislation moves forward, facts and figures continue to be presented about immigrants and their contributions to the U.S. economy. This immigrant fact sheet—the first in our series on immigrants and the economy—provides key data points and is intended to be a resource for journalists, policymakers, business leaders and others. It is a product of the AS/COA Hispanic Integration and Immigration Initiative, which promotes positive dialogue around the economic contributions of immigrants and Latinos across the United States.
The immigrant fact sheet provides key data points on these five reasons why the U.S. economy needs immigrants:
Immigrant fact sheet: Immigrants and the economy
1. Immigrants are more likely to be entrepreneurial and to start new businesses, which, in turn, create jobs for U.S.-born workers.
- Immigrants started 28 percent of all new U.S. businesses in 2011, employing one in 10 U.S. workers.
- Immigrants represent 18 percent of small business owners in the United States—exceeding their share of the overall population (13 percent)—and are more likely than those born in the U.S. to start a small business. Immigrant-owned small businesses employed an estimated 4.7 million people and generated an estimated $776 billion in receipts in 2007. More small business owners are from Mexico than any other country.
- Over the past two decades, immigrants made up 30 percent of the growth in small business creation.
- Immigrants founded 18 percent of 2010 Fortune 500 companies, creating jobs for 3.6 million people. When including immigrants and their children, the number of Fortune 500 companies with immigrant roots jumps to 40 percent, employing more than 10 million people.
2. Both high-and-low-skilled immigrant labor creates additional jobs across the U.S. economy.
- With immigration reform, newly authorized immigrant workers would produce enough new consumer spending to support 750,000 to 900,000 jobs.
- Every additional foreign-born student who graduates in science, technology, engineering or mathematics (STEM) and remains in the U.S. creates an estimated 2.62 American jobs.
- Every low-skilled, non-agricultural, temporary worker who comes to the U.S. to fill a job that may otherwise be left open creates an average of 4.64 U.S. jobs. These low-skilled jobs are the necessary backbone to support higher-skilled positions.
- Passage of the DREAM Act would add $329 billion to the U.S. economy and create 1.4 million new jobs by 2030.
3. Immigrants boost tax revenue, enlarge the taxpayer base, and help to keep down the price of goods.
- On average, immigrants, including the undocumented, pay nearly $1,800 more in taxes than they receive in benefits.
- Households headed by undocumented immigrants paid $11.2 billion in state and local taxes in 2010. That included $1.2 billion in personal income taxes, $1.6 billion in property taxes and $8.4 billion in sales taxes.
- Immigrants lower the price of products used by highly educated consumers by 0.4 percent of GDP and for less-educated consumers by 0.3 percent.
4. As baby boomers retire, immigrants will increasingly be critical for continued economic growth and for ensuring a steady flow of new workers.
- Without immigrants, the U.S. will not have enough new workers to support retirees. Seventy years ago, there were 150 workers per 20 seniors; 10 years ago, there were 100 workers per 20 seniors. By 2050, there will be only 56 workers for every 20 seniors. The U.S. needs new taxpayers to help fund Social Security and Medicare and new workers to fill retirees’ positions and provide their health care services.
- Current levels of immigration will temper the aging of the U.S. population over the next two decades, slowing the increase in the old-age dependency ratio by more than one-quarter.
- Nearly 65 percent of Latino immigrants in California who stayed more than 30 years are homeowners, making them a critical pool to buy the homes of baby boomers as they downsize.
5. The majority of immigrants in the U.S. today are from Latin America, representing a huge potential economic opportunity due to the region’s burgeoning economic standing.
- Immigrants are a vital link with their home countries and offer new prospects for the U.S. to capitalize on Latin America’s economic expansion, which saw three percent growth in 2012—double the 1.5 percent growth in the United States. In addition, 11 of the 20 U.S. free-trade agreements in force are with Latin American countries. Immigrant-owned small businesses have a unique opportunity to connect to the global marketplace.
- Immigrant-owned small businesses are more likely to be able to connect to the global marketplace. Over seven percent of immigrant firms export their goods and services, whereas just over four percent of non-immigrant firms export.
- Mexico boasts the second largest economy in Latin America and grew at a rate of 4.0 percent in 2012, with a projected 3.5 percent growth in 2013. With 29 percent of all immigrants and 58 percent of undocumented immigrants coming from Mexico, this demographic represents a human gateway to one of Latin America’s fastest-growing economies.