Economists have known for years that cities with more immigrants have more jobs and lower unemployment. But why is that? Is it causation or just correlation? Do immigrants just move to the jobs, or do immigrants actually create new jobs for everyone?
A recent study answered that question, and found that new immigrants play an important role in building a more robust economy with more jobs for all.
In their study “Immigrants or Jobs: Which comes First to a Metro?,” business school professors Jack Strauss of the Reiman School of Finance at the University of Denver and Hailiong Qian of the John Cook School of Business at Saint Louis University analyzed data from 500 metropolitan areas and concluded that immigration caused rising job growth and lower unemployment. They found that “foreign-born inflows cause higher self-employment rates, which in turn contribute to job creation.”
Why? What’s so special about immigrants?
Here’s at least a part of the answer: Immigrants are by definition people who dare to leave everything behind to make a better life. They also tend to be hard working and are more likely than the rest of us to start their own businesses.
These conclusions were part of the message delivered recently by UNC Kenan-Flagler Business School professor James Johnson as he addressed a packed press conference in RTP sponsored by the N.C. Bankers Association. Dr. Johnson’s new study, “Demographic and Economic Impacts of International Migration to North Carolina,” co-authored with Dr. Stephen Appold, found that immigrants’ economic impact on the state reached $19.76 billion in 2010.
The study described immigrants’ vast contributions in terms of job creation, consumer spending and taxes paid. The researchers concluded “that $8 in revenue was generated for every $1 the state invested in essential services for immigrants.” They further found that:
“In comparison to the native-born, North Carolina’s immigrants are more likely to be in their prime working ages, more likely to be married and live in married couple households and more likely to be employed in the industries and occupations that propelled North Carolina’s economic growth over the past two decades. Immigrants have higher poverty rates than the native-born. But they are far more likely to be the working poor than the jobless poor.”
The study also highlighted just how hard life can be for immigrants who tend to work in difficult jobs and experience higher rates of poverty.
Taken together, these recent studies show that we have a lot to gain by creating communities that welcome and support new immigrants. Cities across the country are moving quickly in that direction and North Carolina’s cities need to keep up. Ensuring equal access to basics like education, transportation, healthcare and housing helps immigrant families improve their own lives. But it also helps them contribute to a better life for everyone by creating new businesses, new jobs and an overall stronger economy.
Despite the difficulties of learning a new language and new ways of life, immigrants have always been an important part of driving American innovation and prosperity. The better we understand this dynamic and focus on ways to support the newest Americans, the better off we will all be.
Dan Rearick is the Executive Director of Uniting NC, which has worked with city officials in Raleigh, Durham and Greensboro to consider ways to provide new immigrant residents the support they need to make our cities even better for all of us.