Aug 17, 2019

Immigrant-owned businesses contribute billions to U.S. economy

Illustration: Sarah Grillo/Axios

Immigrants in the U.S. are twice as likely to start businesses as their native counterparts for a myriad of reasons, generating at least $1 trillion in annual sales revenue, per the New American Economy (NAE).

Driving the news: President Trump recently issued an immigration rule that targets legal immigrants "who are likely to use public benefit programs" — positioning them as a burden on taxpayers. However, studies show that immigrant-owned small businesses in the U.S. generate billions of dollars in tax revenue each year.

The big picture: No matter where they relocate, immigrants frequently have more capital to start new enterprises than native-born citizens due to personal savings and family loans, the National Bureau of Economic Research has found.

Why immigrants are more likely to start small businesses:

  • Some economic researchers suggest that cross-cultural experience helps "internationally mobile individuals to develop skills and knowledge that augment their ability to identify entrepreneurial opportunities."
  • Other studies theorize that discrimination in the labor market pushes immigrants to start their own ventures, per the Harvard Business Review.
"Outsiders face a tough struggle fitting into a new culture. They must figure out how to deal with, and overcome, frustration, loneliness and a steep learning curve.
And that’s why immigrants make such great entrepreneurs—they’re once again outsiders facing many of the same kinds of obstacles. Been there, done that."
— Adrian Furnham, Wall Street Journal

By the numbers:

  • 1 out of every 5 entrepreneurs in the U.S. is an immigrant. Approximately 3.2 million immigrants run their own businesses, says NAE, a group that supports immigration.
  • These businesses generate $1.3 trillion in total sales and $405.5 billion in tax revenue annually.
  • Almost 8 million Americans are employed at immigrant-run businesses, according to NAE.
  • Nearly half of all immigrant-owned startups are in accommodation and food service, retail trade, professional and technical services, says the National Bureau of Economic Research.
  • In 2012, immigrants started 40% of new businesses in California, New Jersey and New York. These states have some of the largest immigrant populations in the country, the National Bureau of Economic Research found.

Plus, Latino immigrants are more likely to start small businesses than American-born Latinos, according to the U.S. Small Business Administration.

Go deeper... Study: Immigrants and their kids founded 45% of U.S. Fortune 500 companies

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Photo: Joe Raedle/Getty Images

Private companies shed 2.8 million U.S. jobs last month, according to a report from payroll processor ADP and Moody’s Analytics.

Why it matters: It's way less than the nearly 9 million private sector jobs economists estimated would be lost in May, suggesting layoffs during the coronavirus crisis could be slowing sooner than Wall Street expected.

The growing focus on environmental justice could influence Biden's platform

Illustration: Aïda Amer/Axios

The killing of George Floyd in police custody and protests against systemic racism are prompting many green groups to declare their support for racial justice, and one thing to watch now is how this all might influence Joe Biden's platform.

Driving the news: Even before the recent mass upheaval in response to Floyd's death, Biden said he was expanding outreach and eyeing wider plans around environmental justice, or the disproportionate pollution burdens facing poor communities and people of color.

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Illustration: Aïda Amer/Axios

President Trump's call to treat antifa supporters like terrorists could be a green light for high-tech surveillance of dissidents.

Why it matters: It's unlikely the Trump administration can designate antifa as a terrorist group in any legally meaningful way, but the declaration gives law enforcement tacit approval to use a plethora of tech tools to monitor protesters and left-leaning activists.