Why immigrants are the key to American prosperity

Article originally published in the Philadelphia Business Journal on August 26, 2019

President Donald Trump has made immigration reform a high priority for his administration. In addition to his initiatives to address illegal immigration, Trump favors significantly reducing the number of legal immigrants and giving preference to those from European countries.

Trump’s initiatives on legal immigration will adversely impact our prosperity and long-term global competitiveness. His initiatives will not make America great again, but do the opposite. As business leaders, it is our responsibility to point out to the public the fallacies in his thinking. It has been written that Trump is only playing to his political base. This is at a huge cost to our country.

Except for Native Americans, everyone has immigrant ancestors or were an immigrant themselves. Immigrants built this country.

Trump claims that immigrants are a burden to taxpayers. So, what does the data show?

A study published in September 2018 by The National Immigration Forum titled, “Immigrants as economic contributors,” indicates that immigrants have a significantly positive impact on the economy. The article states that “in 2014, immigrants paid an estimated $328 billion in state, local and federal taxes. Immigrants paid more than a quarter of all taxes in California, and they paid nearly a quarter of all taxes in New York and New Jersey.”

A March 2013 article published in the CATO Economic Development Bulletin is headlined, “Poor immigrants use public benefits at a lower rate than poor native-born Americans.” In 2012, 29% of poor immigrants use SNAP benefits (food stamps) compared with 32.5% of native-born Americans.

Data from the Centers for Disease Control and Prevention from 2008 through 2016 shows that birth rates in the U.S. have been below replacement rate. The birth rate continues to decline for a variety of reasons, but immigrants are filling this gap.

With a birthrate below replacement rate, a reduction in the level of immigration adversely impacts not only economic growth, but also the ability to pay future Medicare and social security benefits to seniors. This is outlined in an August 2014 report published by The New American Economy Research Fund titled, “Staying covered: How immigrants have prolonged the solvency of one of Medicare’s key trust funds and subsidized care for U.S. seniors.”

Trump and those who support his policies are ignoring the economic importance of immigrants from all countries – from those countries not so well off in addition to those with a high standard of living and a highly educated population.

Immigrants come to the U.S. in the honorable pursuit of making a better life for themselves and their children, as many generations of immigrants have done before them.

Study after study shows that immigrants are good for business and have a positive impact on the economy. Many immigrants are entrepreneurial. They bring needed economic life and vitality to our inner cities – to areas long abandoned by factories and blue-collar residents. They are motivated to succeed. Immigrants start small businesses within their communities and create jobs and pay taxes. Some work two or three jobs to provide the needed resources so their children can go to college.

Immigrants harvest our vegetables, landscape our lawns and build our houses, many of whom enter the U.S. on temporary work visas, which Trump has made more difficult to obtain. This threatens the livelihood of business owners who are deprived of needed workers.

A March 2018 article in the Wall Street Journal reports that in the 12-month period that ended Sept. 30, 2017, the number of F-1 student visas issued to foreign students, especially to those from China and India, were down 17% from the prior year. The number of F-1 visas issued during this period was down 40% since the peak year of 2015. This decline is the result of Trump’s anti-immigration rhetoric which is giving foreign students pause to committing to a multi-year program of study, as well as stepped up vetting of visa applications.

We will not get the benefit of the research done by these foreign students because they aren’t studying in the U.S. In addition, the reduction in their numbers is putting a financial strain on universities, since these students pay full freight, forcing more reliance on tuition paid by U.S. students, many of whom take out student loans to fund their education. This is a huge lost opportunity to positively influence these foreign students and expose them to the American way of life.

An August 2012 report by the Partnership for a New American Economy, indicates that in 2011, of all new businesses started in the U.S., 28% were started by immigrants. The report also stated that immigrants were more than twice as likely to start a business as those who are native born. Immigrant business owners employ 10% of all employees working in the private sector.

Quoting from an August 14 article in the Dallas morning news, “Although [immigrants] make up about 24% of the population of Dallas, 32.2% of all businesses in the city are owned by immigrants, according to a study published last year. Even as the nation grapples with whether to embrace Trump’s crackdown on immigration, a fundamental reality is that immigrants are a driving force of the U.S. and local economy, now and across the history of America.”

An April 2013 article in Forbes magazine headlined, “40% of the largest U.S. companies [were] founded by immigrants or their children,” indicates that between 1995 and 2005, 25% of the high-tech companies founded during this period had at least one immigrant founder. These immigrant entrepreneurs did not all just come from countries within Europe, they also came from developing countries.

Some immigrants or children of immigrants have had a transformational impact on the U.S. and on the world. To name a few: Sergey Brin (Google), Jerry Yang (Yahoo), Pierre Omidyar (eBay), Andy Grove (Intel), Elon Musk (Tesla and Space X), Steve Jobs (Apple) and Satya Nadella (Microsoft). Their companies are on the cutting edge in their respective fields and play a key role in the technical and global competitiveness of the U.S.

These entrepreneurs have created millions of jobs, improved our global competitiveness, changed how we live and put the U.S. on the forefront of the information technology industry. We should remember and appreciate their contributions every time we send or respond to an email or text message, access an app, take a photo with our cell phones, or use social media.

A policy brief by the National Foundation for American Policy dated October 2017 stated that since 2000, 39% of Nobel Prizes won by Americans in physics, chemistry and medicine have been awarded to immigrants. If Trump’s initiatives are put into practice, how many immigrants will be denied entry into the U.S. whose children or grandchildren could be future Nobel Prize laureates and contribute to the advancement of U.S. global competitiveness? Immigrants are an investment in the future of America.

The iconic words by Emma Lazarus, enshrined on the pedestal of the Statue of Liberty, represent one of America’s most inspirational ideals of those yearning to build a better life for themselves and their families in the United States:

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me:
I lift my lamp beside the golden door.

These words don’t need to be re-interpreted, as recently suggested by some in the Trump administration. Immigrants made this country great. They will continue to do so. As business leaders, it is our job to speak out and inform the public of the facts.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated columnist on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management mProgram at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com. Follow Silverman on LinkedIn here and on Twitter, @StanSilverman.