Immigration Enhances Local Economies


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Immigration is a divisive topic.  Whenever a new segment of workers enter the market, it causes apprehension and distrust.  In the early 20th century, it was African American laborers, who were despised as they were willing to do jobs at wages that whites were not willing to take.  In the late 20th century and 21st century, it is foreign workers, who come from countries that pay much lower wages.  Even when it comes to highly skilled jobs, they are willing to work at a fraction of what Americans are accustomed to.   Both caused dissension and angst with many Americans not fully grasping the role that both workers played in our country’s prosperity.

While Arizona, Georgia, and Alabama are passing laws to restrict immigration, St. Louis is openly courting immigrants in order to stem a steady loss of population.  Loss of industry and perceived unfriendliness to minorities are key factors for the steady decline in population since 1950.  In order to counter this negative trend, city leaders have been openly courting immigrants to reverse it.

Even though many are aware of the negatives of immigration, Jack Strauss, Director of Simon Center for Economic Forecasting at St. Louis University, paints a different picture.  He mentioned that many of the foreign-born immigrants are highly skilled and offer needed skills to the area.    Finding ways to increase their presence would improve the vacancies that are a large burden to the area, along with boosting home prices.  Even when considering low-skilled immigrants, their impact is not as bad as the public would believe.  That is because they are less likely to use food stamps and receive less financial assistance than other low-income groups.

In Strauss’ estimation, St. Louis has not been able to maximize their economic potential.  This includes missing out between 4-7% of income growth for the city and 7-11% for the overall region.  They could have reversed poor job growth inflicting the region where they could have experienced 4-5% more job growth.  Lastly, the unemployment rate for both whites and blacks would have dropped by approximately 2%.

The rate of entrepreneurialism among immigrants is much higher than native-born Americans, so they are job creators rather than job takers.  Strauss’ study showed that immigrants are 60% more likely to be entrepreneurs.  In particular, Bosnians have been very successful in revitalizing parts of South St. Louis by moving into older neighborhoods and starting businesses in diverse sectors such as bakeries, butcher shops, coffee shops, construction, heating and cooling, and even a truck-driving institute.

Despite the efforts by some St. Louis area officials, they have been hamstrung by a Missouri state legislature bent on restricting the flow of immigration.  Even though many of the measures led by Republicans have not been successful, it might create a climate of unfriendliness that turns off immigrants to St. Louis.  In comparison to other top metro areas, their proportion of immigrants within the St. Louis region is low at 4.5%.  The low number of immigrants is one reason cited for their poor economic growth and stagnant income growth.

Despite public support from St. Louis Mayor Francis Slay and St. Louis County Executive Charlie Dooley toward immigrants, Strauss suggests further strategies are necessary to attract foreign-born talent.  He cites efforts in other metropolitan areas where they are openly courting a more diverse workforce.  This includes connecting them with key resources from governmental and nongovernmental agencies, assistance with various social services, and offering career and leadership opportunities.

Of course, it would be ideal if job creation could occur from domestic citizens.  Most income earned from domestic residents will circulate within the same communities.  On the other hand, immigrants, who have left family back in their home country, are likely to give money back there.  That will offset the gains that their presence brings to the U.S.  However, occupying one vacant home, creating one job from a small business, and paying sales taxes from income earned on a job is better than experiencing neighborhood blight, rising unemployment, and declining services from lack of tax revenue.

It is time that we open our blinders and embrace immigration.  They enhance, rather than hurt communities.

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7 thoughts on “Immigration Enhances Local Economies

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