Immigrants owning businesses pursue the American Dream

Filed under: Contributed Columns |

Lost in the debates about immigration in all its forms is an unheralded fact, immigrants are pursuing the American Dream through business ownership at a rate 30 percent greater than that of native-born citizens.
The result is more jobs, more growth, more income and ultimately more tax receipts than would otherwise be expected.
While the debate about immigration policy has gone on in Washington and state capitols across the country, until now there has been no broad study of business formation rates and performance among the immigrant population.
That changed with the publication of “Estimating the Contribution of Immigrant Business Owners to the U.S. Economy,” written by Dr. Robert Fairlie with funding from the Office of Advocacy of the U.S. Small Business Administration.
The report analyzes data from the 2000 Census 5 percent Public Use Microdata Sample, the 1996-2007 Current Population Survey and the 1992 Characteristics of Business Owners.
What it finds might surprise some people.
Immigrants own 12.5 percent of our nation’s businesses, while they represent 12.2 percent of the work force. Those businesses annually generate $67 billion in income or 11.6 percent of all business income across the country.
Moreover, immigrants own 11.2 percent of businesses with $100,000 or more in sales and 10.8 percent of all businesses with employees.
Not surprisingly, immigrant-owned businesses are not evenly distributed across the country, but are concentrated in coastal states.
In Hawaii, Florida and New Jersey, more than 20 percent of business owners are immigrants, while in New York almost 25 percent of business owners are immigrants. In addition, nearly 30 percent of California’s business owners were born outside the United States.
Neither is business ownership spread evenly across ethnic groups.
Immigrants from Greece are most likely to own a business (26 percent), with Koreans, Iranians and Italians not far behind. Mexican immigrants own the largest number of businesses, followed by Koreans, Indians, and Chinese.
Average net business income per owner also varies significantly by ethnicity. Indians average the greatest income at $83,023 per owner, followed by Iranians, Canadians and Greeks.
This report is the first time that immigrant business ownership rates and immigrant-owned business contributions to the economy have been studied in detail. These findings can make a noteworthy contribution to public policy debates not only about immigration, but also about local and regional economic development.
Successful entrepreneurship requires hard work, discipline and the ability to take risks with everything the owner has. These are all traits inherent in the immigrant experience, so it is no wonder that immigrant entrepreneurs are successfully starting and running businesses.
Small business ownership has traditionally brought immigrants into the mainstream of the American economy and the American Dream, and as this study points out, it is still doing that today.
Jim Henderson is the Rocky Mountain regional advocate for the Office of Advocacy of the U.S. Small Business Administration. He can be reached at (303) 844-0503 or