How States And Local Economies Benefit From Immigrants

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Detroit usurped Jefferson County, Alabama’s place last week as the largest municipality in the United States ever to file for bankruptcy. And as signs increasingly pointed toward the city’s financial issues, local leaders in Southeast Michigan have been exploring ways in which to stabilize or strengthen Detroit’s economy. One way to do that is to encourage more immigrants to settle there. New restaurants, shops, and residents already have helped to revitalize one area in Southwest Detroit called Mexicantown. And there is no doubt that immigrant entrepreneurs and innovators play an important role throughout Michiganas well. Immigrant entrepreneurs create jobs, bring in additional revenue, and contribute significantly to the state’s economy. Highly skilled immigrants are vital to the state’s innovation activities, spurring further growth. As such, local leaders and advocates recognize the importance of immigrants in their communities and support immigration through local “welcoming” and integration initiatives.


Indeed, immigrant entrepreneurs make contributions throughout the U.S.:

  • In Alabama, immigrants are 10 percent more likely than their U.S.-born counterparts to be small business owners.
  • Several California metro areas have relatively high levels of immigrant business ownership relative to the foreign-born share of their populations. In 2010 the foreign-born share of business owners was 44 percent in Los Angeles, 35 percent in San Francisco, and 32 percent in San Diego.
  • In Florida, new immigrant business owners had total business revenue of $13.3 billion in 2010—almost a quarter of all business revenue in the state.
  •  In North Carolina, two of the state’s largest companies, Bank of America and Relativity Technologies, were founded by immigrants or their children, and the companies combined employ almost 300,000 people.
  • In Ohio, immigrant entrepreneurs have founded such companies as Proctor & Gamble and Eaton Corporation.
  • Across Iowa, in cities such as Ottumwa and Marshalltown, immigrants are reviving small towns that might otherwise have disappeared.
  • In South Carolina, foreign-affiliated companies (majority-owned) employ 104,300 people, which translates to 7.0 percent of the state’s private industry employment
  • In Indiana, 5.2 percent of all business owners in Indiana were foreign-born in 2010.
  • Arkansas has had a 160 percent increase in Hispanic-owned businesses, growing from 2,094 businesses in 2002 to 5,457 in 2007.

Back in Detroit, the communities to which immigrants have moved have become more stable, according to Steve Tobocman, director of Global Detroit. Tobocman described increased immigration to Detroit as “the single great urban revitalization strategy in modern-day America, and it’s one that doesn’t cost tax dollars.” He further noted that, for cities like Detroit, “international immigration seems to be by far the most important population growth or population stabilization strategy.”

Without a doubt, local leaders in cities and metro areas around the country recognize the important role immigrants and immigrant entrepreneurs may play in helping to stabilize, revitalize, and strengthen their local communities. Welcoming and encouraging immigrants is an important component of a place’s broader strategy for growing their economy and strengthening their community, and it further shows how immigration reform would boost state and local tax revenues along with helping the U.S. economy.

by Paul McDaniel

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