There’s No Business Like Small Business
Thursday, August 16, 2012
Experts and politicians alike often cite American small businesses (i.e., those having less than 500 employees) as being the critical foundation of the American economy. As the government’s Small Business Administration points out, the centrality of small enterprises to the health of the U.S. economy cannot be overstated (http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24). Small businesses represent 99.7% of all employer firms and employ half of all private sector employees. They also hire 43% of high-tech workers, which is of vital importance given the United States move to an information- and technology-based economy. In addition to generating more than half of the nation’s non-farm private gross domestic product, they also pay 44% of America’s private payroll (i.e., $126 billion per year).
New small businesses have also played an invaluable role in America’s growth. An analysis by the Kauffman Foundation asserts that business startups accounted for all of the net job growth in the U.S. between 1980 and 2005 (http://www.kauffman.org/newsroom/business-dynamic-statistics.aspx). So, what does this all have to do with immigrants?
Plenty, according to a recent report by the Partnership for a New American Economy titled “Open for Business: How Immigrants are Driving Small Business Creation in the United States” (http://www.renewoureconomy.org/index.php?q=open-for-business).
Among the report’s key findings:
- Immigrants started 28% of all new U.S. businesses in 2011, despite accounting for roughly 13% of the U.S. population;
- Over the past 15 years, immigrants have increased the rate by which they start businessesby more than 50%, while the business generation rate of native-born Americans has dropped by10%;
- Immigrants are now more than twice as likely to start a business as the native-born;
- Immigrants start more than 25% of all businesses in seven of the eight sectors of the economy that the U.S. government expects to grow the fastest over the next decade. These include health care and social assistance (28.7%), construction (31.8%), retail trade (29.1%) and leisure and hospitality (23.9%), among others;
- Immigrant business owners employ one out of ten American employees at privately owned enterprises.
From Korea to China to India to Mexico, immigrant small business owners are an irreplaceable part in America’s economic well-being. Given that they have flourished despite restrictive immigration policies makes their success all the more impressive. However, it is also a resonant reminder that immigration reform should be every American’s business.