Want to give the economy an entrepreneurial shot in the arm? Immigration may be part of the answer.
Most studies find that immigrants are more likely to be entrepreneurs or self-employed than the population as a whole. The Philadelphia Business Journal reports on yet another study that adds more support:
About 220 businesses, employing 900 workers, occupy the six-block stretch of 52nd Street between Arch and Spruce streets in West Philadelphia.
Overwhelmingly, they are immigrant-owned, reported the Welcoming Center for New Pennsylvanians, which hopes a study released this month will bring attention to the contributions being made by immigrants to the city’s struggling commercial corridors.
Immigrants have accounted for nearly 75 percent of the area’s labor growth since 2000 and, when compared to native born, more are employed (73 percent versus 71.5 percent) and self-employed (10.7 percent versus 7.9 percent), according to a new Brookings Institution study, “Recent Immigration to Philadelphia: Regional Change in a Re-Emerging Gateway.”
Over the past several decades we have looked at immigrants as a source of cheap labor and our policy — or lack thereof — has reflected this.
To help create jobs and growth we should open our doors to entrepreneurs from around the globe. Current policy makes it difficult for entrepreneurs to enter the US legally. We should be actively recruiting immigrants who want to come to our system of free enterprise to start their businesses, just as we did to bring in the scientists we needed in the 1950s and 1960s to help fight the cold war.
The last great entrepreneurial economic boom was created in large part by first generation Americans and sustained by a large, but controlled, wave of immigration that helped to build an economy that last through most of the 1900s.
In addition to a “green card” for immigrants coming here to work, the US also needs another card (let’s color it a “red card” for urgent) to support the flow of legitimate entrepreneurs looking for the freedom this country offers to business owners.
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Hi Jeff,
This already exists in the form of the E-2 visa, which allows foreign investors to start and run a business in the USA.
Unfortunately the E-2 visa program is severely flawed in a number of ways – for example:
* You have to invest a “substantial sum” into buying or starting a business and /then/ leave the country to apply for the visa (which takes 6-12 months to approve, during which time you cannot work on the business you’ve just spent $100k+ on. If you get rejected you’re locked out of the country and your investment becomes useless)
* Paths to permanent residency/citizenship are limited, and children of E-2 holders are not eligible to remain in the country when they reach 21
* You need to renew, perpetually, every 2-5 years. Each application is considered as a new application.
* You are limited to a maximum of 2 people in a company (you must be a majority shareholder to qualify)
* The program is very poorly documented and there are many scams and crooked attorneys looking to rip off applicants as the scammers know the applicants will have a large amount of cash to invest.
* Poor documentation means that USCIS’ rulings are often quite arbitrary and impossible to predict. As you need to re-apply for the visa every 2-4 years, it is quite possible for someone who has run a successful business for decades to suddenly be denied renewal and have 90 days to sell up and get out.
We came over 2 years ago and bootstrapped a successful tech company, but we’re still worried about renewing next year and the future feels uncertain.
The foundations of a great entrepreneurial visa program are there, they just need a severe overhaul.
In this time of high unemployment– and overpopulation– it is imperative to stop immigration. Legal and illegal immigration should be reduced to zero.
Perhaps not a red card since the rest of the world is full of futbol (soccer) fans and the red card is used to send a player off the field, not exactly the message we’re sending. I’m joking of course and the general point is well taken.
Don McAninch: That’s a ridiculous statement.
Immigrants are not just low-level workers “tekking our jerbs” on construction sites and chicken-gutting plants.
Immigrants were responsible for 52% of Silicon Valley’s startup companies in 2005 and filed 24% of new patent applications (source: http://www.usatoday.com/tech/news/2007-01-04-immigrant-start-ups_x.htm).
Immigrant-owned companies also provide employment for US citizens (my own business provided work for around half a dozen US citizens).
Smart, capable entrepreneurs are a minority of the world’s population. Any economy would do well to do everything in it’s power to attract the best and brightest talent regardless of nationality and regardless of the economic climate.
Closing the borders would just send those people to other nations and end up reducing US competitiveness in the long run.
Dr Cornwall is right when he says that there needs to be a clear path to citizenship for these individuals.
The best thing government can do for immigration is the same as the best thing it can do for most other things- leave it alone and let markets determine how much immigration happens. I agree with you that immigration can spur economic growth. The problem with government caps on immigration is that they prevent the market from reaching a point of equilibrium in terms of the quantity of immigration demanded by potential employers. This represents a ceiling. On the other hand, if the government does anything to artificially encourage immigration beyond what the market settles on, it essentially creates a floor. As much as possible, we want to avoid floors and ceilings because they create market distortions and determine things by arbitrary whim and fiat rather than by the reasoned actions of voluntarily cooperating individuals.