William Blazar is senior vice president of public affairs and business development at the Minnesota Chamber of Commerce. He is responsible for the Chamber's public affairs program, including policy development, lobbying, and elections. He also manages Grow Minnesota!, the Chamber's business retention and expansion program. He is a past member and chair of the board of the Minnesota Government Relations Council. Prior to joining the Chamber, he was manager of government affairs for Target Corp. He has also worked as a freelance public policy analyst, specializing in state and local fiscal policy, economic development, and telecommunications. He holds a M.A. in public affairs from the Humphrey Institute of Public Affairs at the University of Minnesota. He co-convened the Minnesota Compass Immigration Advisory Group as well.
Quiz a panel of Minnesota public policy experts on the ingredients necessary for economic recovery and a familiar list is likely to surface: an educated workforce, competitive tax policy, affordable and quality health care, and access to capital – especially for small business.
Add immigration reform to the lineup. The issue typically does not generate the same degree of attention among policy experts as it does among business owners and managers – the people with daily responsibility for growing our economy. Immigrants loom large in re-energizing the state's economic engine. Immigrants as a resource – and the need for immigration reform – command the attention of the Minnesota Chamber of Commerce and the statewide business community.
Immigrants play at least three integral roles in the development and growth of the state's economy – as workers, as consumers, and as employers. Their entrepreneurial spirit is especially important as Minnesota's vitality depends heavily on the start up and success of new businesses.
Immigrants are an increasing source of workers as Minnesota, like the rest of the nation, deals with an aging workforce. A large portion of workers will retire in the next 15 years, and birth rates are insufficient to replace them. At the same time, Minnesota's foreign-born population has been increasing appreciably since 1970. Statewide, immigrants leverage 24,000 jobs and $1.2 billion in personal income.
Minnesota employers have long benefited from this worker pool. Immigrants frequently have taken jobs that native-born workers deem unacceptable, and it has proven an important economic multiplier. Filling these lower-skill and/or physically demanding jobs is key to preserving other higher-skilled jobs. For example, workers who care for dairy herds enable thousands of jobs in dairy processing plants. Furthermore, there is little evidence that immigrant workers are displacing native-born workers, other than those without high school diplomas.
As the foreign-born population increases, so does its consumer spending. There's good news on the local front, according to figures published by the Selig Center for Growth at the University of Georgia. Among all states from 1990 to 2008, Minnesota had the ninth-highest increase of buying power among Asian residents (native and foreign-born) and the eighth-highest increase among Hispanics (native and foreign-born).
Among the beneficiaries are many Greater Minnesota communities where immigrants represent a major portion of the local workforce. A recent study of nine counties in south-central Minnesota showed that 2,600 Latino workers – native and foreign-born – sustained 3,770 jobs held by non-Latinos in the region. Their purchases of goods and services translated into another 4,100 jobs in that same region.
However, the greatest impact on the economic continuum might be in entrepreneurship. At its foundation, Minnesota's economy is homegrown. More so than other states, Minnesota depends on the start-up and success of new businesses for the growth and development of its economy. Immigrants appear especially savvy at starting new businesses.
Nationally, a quarter of our engineering and technology companies have had at least one foreign-born founder, according to research cited in a 2009 study, "The Economic Impact of Immigrants in Minnesota," completed by Katherine Fennelly, professor at the Hubert H. Humphrey Institute of Public Affairs, University of Minnesota. The same report referenced that foreign nationals were inventors of 24 percent of international patent applications filed from the U.S. in 2006.
Immigrants represented 12 percent of the U.S. population in 2008 and 17 percent of all new business owners. In Minnesota's business community, immigrants comprise nearly seven percent of the state's population and three percent of the businesses. There are signs, however, that immigrants will contribute more in the future. More than 400 Asian-Indian businesses employ 4,000+ workers in Minnesota. Hispanic-owned firms are up 350 percent since 1990. A report by the Small Business Administration Office of Advocacy estimated that immigrant-owned businesses generated $331 million in net income in this state in 2000.
Immigrants' contributions to the development and growth of our economy have the potential to increase over time as they gain experience, earn higher wages, and start more businesses. Increases in their earning capacity translate into additional tax payments and consumer spending – both essential to Minnesota's economic vitality. More business starts increase the probability that there will be new "Fortune 1,000" businesses in our state. Regardless of how big they grow, each new enterprise produces more jobs for Minnesota.
The benefits will not be automatic. What is necessary to achieve them?
- First, recognition that any additional expenses related to the education and training of new Americans will pay significant dividends in the long run.
- Second, action by the U.S. President and Congress to pass immigration reform legislation.
Minnesota's economic history verifies the first. The challenge is in our ability to adapt programs designed almost exclusively for native born learners so that they are effective for immigrants.
With respect to reform, we need to send a clear signal to our Washington lawmakers that we expect immediate action. From an economic perspective, reform must include a process for resolving the status of those who have entered the country illegally and a workable system going forward so individuals and families can enter our country and participate fully in the development and growth of its economy.
Minnesota's business community is engaged on both fronts: supporting the necessary changes in our education and workforce development programs and federal immigration-reform legislation. Success is critical not only to keeping the jobs and income we have, but also to creating new opportunities that will sustain and grow our economy for decades to come.
Read more about it
Minnesota Compass Immigration section
The Multicultural Economy, Selig Center for Economic Growth
Opinions in the For Discussion columns are the authors' alone and do not necessarily reflect the views of Minnesota Compass. Compass welcomes a range of views about issues pertaining to quality of life in Minnesota.