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Embracing the Immigrant Engine

November 19, 2012

The National League of Cities’ Center for Research and Innovation has joined with Next American City to explore how cities are developing innovative models for tackling complex urban issues and strengthening their local economies.  NLC is featuring a series of case studies, and this post highlights the third and final of the series, The Rise of the New Baltimoreans.

Baltimore, along with many other cities across the country, is welcoming immigrants, and their vast economic contributions, with open arms. These local efforts for the most part are flying under the radar and happening in spite of more newsworthy (but perhaps less common) restrictive state and local immigration policies and rancorous national debate.

Economic Impact
When it comes to immigrants and the economy, the numbers speak for themselves.  According to the Partnership for a New American Economy, immigrants are responsible for nearly one in three new U.S. businesses and are increasingly likely to start a business, just as the rate of new business generation among native-born Americans is on the decline.

And these are businesses that are job and revenue generators for the economy. Immigrant-owned businesses are more likely to hire employees than are non-immigrant-owned firms and more likely to export their goods and services, finds the U.S. Small Business Administration.

“From local neighborhood shops to America’s largest companies, immigrant business owners contribute more than $775 billion dollars in revenue to our annual Gross Domestic Product and employ one out of every ten American workers at privately-owned companies across the country,” notes Partnership for a New American Economy.

High-skilled immigrants now outnumber low-skilled immigrants, according to the Brookings Institute, and represent a large share of business owners and labor force in sectors that are expected to grow over the next decade, from hospitality to informational technology to health care.

For local communities, policies to attract immigrants can translate to growth and revitalization that is not only inclusive, but creates a sense of place and distinctiveness, brings new wealth and opportunities, and reinvigorates the local talent pool.

Baltimore’s Story
New Baltimore mayor, Stephanie Rawlings-Blake, started her tenure in 2011, and from day one committed to turning the tide on the city’s population loss and declining economic base.  “A shrinking city is a place unable to meet even the most basic needs of its people — basic rights that everyone should expect,” she said in her inaugural address. “A shrinking city simply cannot stand.”

The mayor’s vision of adding 10,000 families over the next 10 years rests in part on attracting immigrants, who will, both with their numbers and high rates of entrepreneurship, strengthen the city’s economy.  Over the past year, the city, along with a host of multisectoral partners, have offered home-buyer programs, language and legal requirements training, grants and other tools to help boost entrepreneurship and small businesses, and police sensitivity training.

And, as the case study details, although there are skeptics, these efforts appear to be making an economic impact:

“You could roll a bowling ball down the sidewalk five years ago,” says Chris Ryer, president of the Southeast Community Development Corporation, which focuses on the Baltimore’s Highlandtown neighborhood. “Now it’s busy.” As the existing population aged out, young families have moved in. “There’s a lot of strollers on the streets,” says Ryer.

“While many of Highlandtown’s new residents are Latino, the freshly vibrant area has attracted immigrant entrepreneurs from diverse backgrounds. The neighborhood’s 10-block commercial strip, says Ryer, houses not only a Latino-owned photography studio but an Israeli-owned grocery and a Peruvian chicken joint. Ryer cites statistics on how immigrants open small businesses at higher rates than their native-born neighbors. “We’re seeing the fruits of that in Highlandtown,” he says.”

Not Alone
The lasting impact of Rawlings-Blake’s efforts remain to be seen, but Baltimore isn’t the only city investing in immigrant-based policies and programs.

  • Boston:  The mayor established the Office of New Bostonians to reach out to the city’s immigrant population, in part by identifying official and unofficial liaisons to local communities. Another key to the effort is celebrating the contributions to Boston’s status as a world class city made by immigrants.
  • Detroit: City and business leaders created Global Detroit to revitalize the economy of Southeast Michigan. Since 2010 it is has raised more than $4 million of philanthropic investments for targeted initiatives to attract immigrants, foreign trade and investment.
  • Dayton: Welcome Dayton hopes to make that southwest Ohio city of 140,000 more receptive to new arrivals and help them along toward citizenship; among the initiative’s goals is to develop an international marketplace for immigrant entrepreneurs in an underinvested corner of the city that has demonstrated growth from recent immigrants.

As these examples suggest, cities looking to new arrivals to help support economic development also have a responsibility to help fully integrate immigrant residents into the mainstream community.

Learn more about how cities can support immigrant integration.

What’s Next
Although cities are making headway in welcoming immigrants, the need for a partnership among governmental partners is critical. The results of a weak partnership in this arena have been made poignantly clear as of late: immigrant entrepreneurship, particularly in high-skilled fields, has plateaued, according to the Kauffman Foundation.

This is due in no small part to the restrictive nature of national immigration laws that are intended to boost U.S. competiveness. For example, laws that force foreign students educated in the U.S. to return home, instead of encouraging them to use their skills and start businesses here.

Or H-1B visas, those that allow employers to hire foreign workers in specialty occupations for a temporary period of time.  They help build a high-skilled workforce, particularly in the STEM fields, but are in limited supply and not evenly geographically distributed, and the allocation of visa fees to local workforce grant programs are misaligned.

But NLC’s Leslie Wollack remains hopeful. “After languishing on Capitol Hill for several years, the results of the presidential election and the large turnout of Latino voters have helped renew the push for the passage of comprehensive immigration reform legislation. Members of Congress and the Administration are voicing optimism that an agreement could be reached as soon as early next year.”

As for their part, cities across the country are embracing the realities and practicalities of immigration as a strong path toward revitalization and growth.

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