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Immigrants are an essential element in keeping the American economy strong, from fast food businesses to high-tech industry, they are filling an intrinsic need in the labor force.

From programmers in Silicon Alley to restaurant bus boys in Bethesda, MD and nurses in New York, immigrants are filling jobs that otherwise might go begging." (Business Week, "How Immigrants Keep the Hive Humming, April 24, 2002).

The U.S. government has forecast a shortage of 20 million workers by 2026, prompting many parties to call for a relaxation of the US immigration laws in order to meet the labor demand.

Alan Greenspan, the Federal Reserve Chairman, has warned repeatedly that the shortage of workers could lead to inflation. He commented that "Under the conditions that we now confront, we should be very carefully focused on the contribution which skilled people from abroad, (as well as) unskilled people from abroad, can contribute to this country, as they have for generation after generation.

General Facts about Recent US immigration
The total number of immigrants per year (including illegal and refugees) is somewhat less than it was in the peak years at the start of the 20th century, when the US population was less half as large its current population. The rate of US immigration relative to the population is low rather than high. US immigration as a proportion of population is about a third of what is was in the peak years.

The foreign-born population of the US is 9.5 percent of the total population (in 2000). This can be compared to the 2000's proportions of 22.7 in Australia; 16 percent in Canada; 6.3 in France; 7.3 in Germany; 3.9 percent in Great Britain; and 5.7 in Sweden.

Though the volume of illegal immigrants is difficult to estimate, its estimated through a consensus of methods, that the number is approximately 3.2 million, lowered by the amnesty of 1987-1988, but not very different from the previous decade. The rate of illegal immigrants is agreed by experts to be about 250,000 to 300,000 per year. More than half of illegal immigrants enter the US legally and overstay their visas.

The United States as the great "melting pot" has become a myth. The reality is that there is a continued geographic concentration of minority groups in certain regions and in specific metropolitan areas. This holds true especially for Hispanics and Asians, who tend to enter the US through "gateway cities" such as Los Angeles and New York and then remain there.

Los Angeles is home to one fifth of the US Hispanic population. First in growth of all US cities; it gained18 percent of the Hispanic population between 1900 and 2000. Mexican and Latin-American immigrants and continued high fertility rates account for the increases.

The Census of 2000 made clear minorities grew at 12 times the rate of whites. By the year 2050 according to Census projections racial and ethnic minorities will outnumber non-Hispanic whites. In the next fifty years this demographic shift will transform politics and business.

California will achieve a statewide "minority majority" in 2004 and Texas by 2010. Though generally most communities in the US lack true racial and ethnic diversity, the Census Bureau identified twenty- one counties that qualify as "multiple melting pots" (see box below) where there is a significant presence of more than two minority groups. These communities will continue to become unique markets as the blending of culture and intermarriage transform their personality.

Multiple Melting Pots:
California: Salinas, Merced, Stockton-Lodi, Fresno (41% Hispanic 8% Asian), Vasalia-Tulare-Porterville (Hispanic 45% Asian 5%), Yuba City (Hispanic 18% Asian 11%) , Modesto (Hispanic 27% Asian 6%), Sacramento-Yolo (Hispanic 14% Asian 9%), Santa Barbara (Hispanic 32% Asian 5%), San Diego (Hispanic 25% Asian 9%) , San Francisco-Oakland-San Jose (Hispanic 19% Asian17%), and Los Angeles-Riverside-Orange County (38% Hispanic, 10% Asian).

Texas: they include Laredo, Odessa-Midland( 37% Hispanic 2% Asian), Houston-Galveston-Brazoria (Hispanic 24% Asian 4%), Killeen-Temple (Hispanic 15% Asian 4%) , Brownsville-Harlingen-San Benito (Hispanic 15% Asian 3%), McAllen-Edinburg-Mission (Hispanic 15% Asian 1%).

Other: New York,-New Jersey-Long Island-Connecticut- Pennsylvania (Hispanic17% Asian 6%) Chicago-Gary-Kenosha (Hispanic 13% Asian 4%) and Washington, DC-Baltimore, MD (Hispanic 5% Asian 5%)

Thirty metros out of two hundred seventy six account for seventy percent of all Hispanic growth in the 1990's. Houston increased its Hispanic population the most with more than half a million moving there over the decade. Phoenix, more than doubled its Hispanic population over the 1990's and Las Vegas and Atlanta more than doubled and tripled their Hispanic populations respectively.

The three Asian strongholds - New York, Los Angeles and San Francisco account for 37 percent of all Asian gains in 2000. Metros with fast growing but smaller Asian populations include Dallas, which doubled its population an d Atlanta, where it tripled.

Las Vegas added significantly to both its Hispanic and Asian population and Orlando gained in its Hispanic numbers. As employment opportunities open up, states such as Georgia, North Carolina , Nevada, Utah, and parts of the Midwest new immigrant s have been pioneers in moving to these untested waters and establishing minority frontiers.

Though Chinese Americans constitute the largest Asian subgroup in the US (2.4 million and 24% of total population), the Asian Indian growth of 106 percent in the last decade was unprecedented and the largest of any Asian sub group. This was followed by the Vietnamese American community (83% growth rate and 1.3 million in population).

The decline in Japanese population may be attributed to a decline in their population growth.

Of particular note is the doubling of the Asian Indian population in the United States within the last ten years. The demand for hi-tech visa workers, (especially software programmers) and the increase in immigrants sponsoring their families are amongst the major reasons for the increase.

There is a shortage of skilled workers in the software development industry. There is a bill H.R.2202 which is on its way to Congress and will make it more difficult to obtain these hi-tech visas. In New York City and New Jersey Indians are running for local office to bolster their political representation.

According to an estimate provided by the RapidImmigration Network, a lobby group that works in the interests of H1-B workers, last year there were approximately 400,000.

Asian Indian hi-tech visa holders in the US. Most had arrived in the past few years to run what was then the booming new economy based in the Internet business. The recent slowdown in "E business" may have an affect on this population, but its probably premature to analyze the effects of the fallout on this particular population.


Immigrant Entrepreneurs
Immigrants Continue the Historical Trend of Self-Employment into the 21st Century
Immigrants are significantly more likely to be self employed than natives. The Horatio Alger story of making good in the "New World" has carried on in the proliferation of family owned businesses such as the Korean corner store or the Hispanic Bodega.

In the last decade hi tech professional immigrants have made extraordinary contributions to cutting edge US industries. It is estimated that almost one quarter of Silicon valley firms were established by immigrants. Immigrant entrepreneurs have revitalized neighborhood; from Dominicans in Manhattan's Washington Heights to Cubans in Miami's Little Havana, Hispanic immigrants have transformed their communities into thriving economically dynamic strongholds.

Of particular note is the resurgence of small business, which thirty years ago was in decay. Several researchers have suggested that US immigration has encouraged the entrepreneurial drive of the total population, significantly contributing to this transformation.

Possibly because the competition for low-skilled work has intensified, a viable route up the socio-economic ladder has become entrepreneurship as an important alternative to wage labor.

Certain factors such as geographical concentration, interdependent networks of social and business relationships, and a relatively sophisticated division of labor are all factors in creating the right circumstances for small family run businesses to thrive. As an example the proportion of Cuban owned businesses in Miami from 1993 to 2000 rose from 8 to 24 percent.

Immigrant communities take care of their own and that can amount to "social capital" which can positively influence the socio-economic opportunities of the individual immigrant. "Prevailing market conditions and in part accessibility of those businesses to immigrant ownership" are important aspects in family run businesses." (University of California researcher, Roger Waldinger)

Since many newcomers retain close links with their adopted land, businesses that service needs such as tax accounting firms and travel agencies tend to flourish. In the 1960's in Chicago the new Korean immigrants bought out businesses owned by elderly Jews who were leaving the old inner city neighborhoods and entered into the wig business selling "European" and "African" style wigs. In the seventies, the Korean deli and its ingenious salad bar became a staple of numerous inner cities.

As immigrants manifest a tendency to affiliate with others of their own ethnicity or national origin, creating a community of buyers, sellers, laborers, employers and financiers, as well as tightly meshed networks of information.

There are other researchers that argue that human and financial capital and not "social capital" are the key determinants of business activity. A study by Patricia Pessar among Hispanic immigrants in Washington, DC found "that ethnic solidarity was neither pervasive nor even necessarily desired by immigrants."

Andrew Yuengert who conducted statistical analysis suggests "Immigrants from countries with high self-employment rates have higher than average self employment in the US. And that immigrant s tend to concentrate in states with progressive tax codes, which may act as incentives to pursue self-employment, with its greater opportunities for tax avoidance. Yuengert 's research found that these two factors account for 62% of immigrant self-employment participation.

Other research indicates that the immigrant family, rather than the immigrant community is the key social connector. "The family's chief advantages are not simply tangible products, such as unpaid labor, but also involve the mutual obligation and trust characteristic of solidaristic small groups." (Sanders and Nee)

The downside of immigrant entrepreneurship has been hotly debated in recent times. The image of the toiling immigrant pulling himself up by his bootstraps in a new land is something of a cliché.

In another light the ethnic solidarity that is a lynch pin to immigrant based small business can also be seen as exclusionary and clannish, impeding access to business and employment in the main stream, especially for the succeeding generation. However its appears that overall self employment is generally a positive factor for the immigrant, suggesting that entrepreneurship reflects overall economic opportunity rather than distress.


Economic Characteristics of Immigrants
Ten High-Tech Companies started by Immigrants earned $31 Billion in revenues in 2002.
"New immigrants are more concentrated than natives in the youthful labor force ages when people contribute more to the public coffer than they draw from it. Of all the important facts about US immigration relevant to its economic effects, this is the most important and the one which is most consistent." (Cato Institute and National US immigration Forum).

The average education of new immigrants has been increasing with each successive generation. The proportion of adult immigrants with 8 or fewer years of education has been decreasing and the proportion of adult immigrants with 16 years or more has been increasing. The proportion of immigrants with bachelor 's or postgraduate degrees is much higher than the proportion of the native labor force.

Immigrants have increased markedly as a proportion of the member s of scientific and engineering labor force (especially at the highest level of education). Immigrants, even those from countries that are much poorer and have lower life expectancies than the US, are healthier than US natives of the same age and sex. New immigrants have better records with respect to infant mortality and health than do US natives and immigrants who have been in the US longer.

First and second generation immigrant children do unusually well in school. They win a disproportionate amount of scholastic prizes. Immigrants do not cause native unemployment, even among low -paid or minority groups. New immigrants create jobs with their purchasing power and with the new businesses they start.

In an analysis of the 2000 census, where the average household income for natives was $37,300, 1980-1990 immigrants from countries from which most US immigration is legal received $34,800, the average for immigrants from countries with mostly refugees was $27,700, and for those from countries sending illegals $23,900.

Illegal aliens contribute about as much to the public coffers in taxes as they receive in benefits. New data suggests the undocumented pay about 46 percent as much in taxes as do natives, but use about 45 percent as much in services. A poll of the most respected economists found a consensus that both legal and illegal immigrants are beneficial economically.

In regards to the specific minority groups certain characteristics are pertinent. Hispanics are twice as likely to become unemployed based on the 2000 Census. Hispanic and non-Hispanic Whites have different occupational distributions. Hispanics were more likely to work in service occupations (19.4% and 11.8% respectively). Only 14% of Hispanics were employed in managerial or professional occupations, compared with 33.2% of the non-Hispanic whites. Among Latino groups, Mexicans were least likely to work in managerial or professional occupations (11.9%).

Hispanic workers earn less than non-Hispanic workers. In 1999, 23.3% of Hispanics and 49.3% of non-Hispanic Whites earned $35,000 or more. In this same year, 22.8 percent of Hispanics were living in poverty, compared with 7.7% of non-Hispanic Whites. Hispanic children represented 16.2 of all children in the US, but constituted 29% of all the children living in poverty.

However overall immigrants fare well in terms of income with adult, foreign-born, naturalized citizens actually have higher adjusted gross incomes (averaging $40,502) than families with U.S.-born citizens only ($35,249).

According to the most comprehensive study ever done on immigrants, the National Academy of Sciences (NAS) found that in all their combined roles, immigrants make indispensable contributions to our economy. They compose an increasingly essential proportion of our workforce. Through their tax payments, they help finance the costs of schools, health care, roads, welfare payments, Social Security, and the nation’s defense. Of course, immigrants are also users and beneficiaries of these government programs.

Businesses founded by immigrants are a source of substantial economic and fiscal gain for U.S. citizens. Ten high-tech firms founded by immigrants (Intel, Sun Microsystems, Computer Associates, Solectron Lam Research, LSI Logic, AST Computer, Wang Laboratories, Amtel, and Cypress Semiconductor) generated $31 billion in revenues in 2002. These and other businesses started by immigrants add at least another $29 billion to the total amount of taxes paid by immigrants.

With the U.S. economy in the midst of its longest expansion in history, immigrant workers are increasingly essential to filling jobs ranging from computer programmers to hotel and restaurant workers. Federal Reserve Chairman Alan Greenspan has repeatedly commented that US immigration is an important source of workers in a tight labor market.

The shrinking U.S. labor supply may have serious implications for inflation pressures, Greenspan says, as "there is an effective limit to new hiring, unless US immigration is uncapped." Without an increase in US immigration, inflation--and the resulting slowdown of the economy--could threaten the prosperity of all Americans.

Most immigrants arrive in the United States in the prime of their working years. More than 70 percent of immigrants are over the age of 18 when they arrive in the United States. That means there are roughly 17.5 million immigrants in the United States today whose education and upbringing were paid for by the citizens of the sending country, not American taxpayers. The windfall to the United States of obtaining this human capital at no expense to American taxpayers is roughly $1.43 trillion. This makes immigrants a fiscal bargain for our country.

In summary, it is obvious that immigrants are major contributors to the economic health of the United States. They compose an increasingly essential proportion of our workforce and will continue to do so into the twenty-first century.

Sources:
American Demographics, Diversity In America by William F. Frey
Research Perspectives on Migration Vol 1 No.2 Immigrant Entrepreneurs
The Demographic and Economic Facts published by the Cato Institute and the National US immigration Forum
A Fiscal Portrait of the Newest Americans: Executive Summary by National Research Council of the National Academy of Sciences
USCIS Immigration Information
US immigration Facts
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