Job Creators or Job Takers?

Job Creators or Job Takers?

Assessing the outsize impact of immigrant entrepreneurs in Minnesota.

What comes to mind when you hear the word “entrepreneur”? For many, that label conjures a vision of someone relatively young (mid-30s to mid-40s), male, white, and high-tech. Such as Elon Musk, who happens to be an immigrant from South Africa via Canada.

Musk is the person who rebuilt a former California GM plant into a Tesla plant in 2017, spawning more than 50,000 jobs while injecting $4.1 billion into California’s economy in that year alone. Musk—not a Tesla founder but an immigrant Series A investor—placed his PayPal earnings in an invention that was, at the time, still questionable: electric cars.

the state of MinnesotaSelf-starters who are immigrants exist at every economic level in the U.S., but most importantly, they tend to create more jobs, not simply fill existing ones. Native or U.S.-born citizens can be quite adamant—and ignorant—in their use of the “double-standard immigrant” stereotype. That’s the view that immigrants fill the jobs many of us don’t want (such as meat packers and personal care aides), while simultaneously taking jobs away from “hardworking Americans.”

In a recent report and podcast, J. Daniel Kim, an assistant professor of management at the University of Pennsylvania’s Wharton School, found that while immigrant workers put pressure on the U.S. labor supply, foreign-born workers also create jobs “that increase labor demand.” Put plainly, that’s more jobs for more people.

Immigration must increase, if Minnesota wants to maintain its economic resilience.

Kim collaborated with researchers from MIT, the National Bureau of Economic Research, Northwestern University, and the U.S. Census Bureau. Their study, released in late 2020, acknowledges that the very topic of immigrant workers is a political lightning rod in the United States. Immigrants, for example, are assumed to work for less because they “have to.”

Using tax records, Kim and his fellow researchers found that immigration does not, by itself, suppress wages. Rather, wages were the same or slightly higher for immigrant-founded firms compared to firms with native founders. Moreover, immigrant entrepreneurs, in our current economy, account for breakthroughs that yield close to 25 percent of patents and are more likely to hold STEM degrees, according to the Wharton study.

But you don’t need a STEM degree—or a patent—to open a two-person sandwich shop and hire a third person who works part-time. One of the most powerful Minnesota voices championing the economic impact of immigrant workers is Hamse Warfa, deputy commissioner of the Minnesota Department of Employment and Economic Development (DEED). Warfa, the highest-ranking African immigrant official in Minnesota state government, emphasizes why immigrants are key to an expanding Minnesota labor force: They’re young, compared to the shrinking portion of U.S.-born Minnesotans of working age.

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“Prime workforce age,” according to the U.S. Census Bureau, is between 25 to 54. In Minnesota, more than 61 percent of Minnesota’s immigrants fall into that age group, compared to less than 36 percent of native-born Minnesotans.

In his November 2019 commentary, “Immigrants Built Minnesota’s Economy and Culture. They Still Do,” Warfa notes that 107,830 foreign-born people moved to Minnesota between April 2010 and July 2018. His research, relying on Census Bureau data, compares that migration to the rate of immigration nationally. It indicates that Minnesota, at least during that period, saw a rise in its immigration rate by 28 percent, which he notes is growth at twice the national rate for the period.

Another DEED official, economic research manager Steve Hine, more recently examined Minnesota’s dependence on immigrant labor. Hine’s January 2020 report emphasized, among a barrage of statistics, that labor force growth in Minnesota over the last 10 years—new workers, new jobs—was 27 times greater for immigrants than for natives. Hine published his findings, in part, as a warning that immigration must increase, if Minnesota wants to maintain its economic resilience.

As Kim noted in his Wharton study, the natural fallout from immigrant innovation benefits the economy for centuries. Today’s Fortune 500 list is replete with entities founded in the 1800s, such as the company Éleuthere Irénée du Pont started in 1802. That immigrant was a French chemist who escaped the French Revolution and religious persecution against Huguenot Protestants, emigrating to the United States in 1800. To his workers, he was presumably “Monsieur du Pont.” To America, he was, most assuredly, a huge job creator.

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