Immigrants: Resource for MN’s Economy

September 2013

Immigrant Contributions to MN’s Economy

• Workers• Entrepreneurs• Consumers• Connect us to world economy

• Contributions change over time!

Workers

• Immigrant workers = majority of labor force growth

• 7% of population – 9% of workforce– 375,000 to 390,000 people– 230,000 workers– 55,000 – 85,000 “unauthorized”

• MN growth depends on imported labor

Labor Force Growth Will Slow Sharply

Migration Will Be Increasingly Important Re Growing the Labor Force

-100,000

0

100,000

200,000

300,000

400,000

500,000

2000-10 2010-20 2020-30

Total Natural Part Rate Migration

Net Labor Force Growth

State Demographer projection revised 2007

MN Labor Force % Born in Another Country

3.3%

8.5%

12.6%

3.1%3.6%

4.8%

0%

2%

4%

6%

8%

10%

12%

14%

1990 2000 2006

25-34

55-64

PUMS microdata from 1990 & 2000 Census & 2006 ACS

Immigration to Minnesota Since 1860

375,000 – 390,000 total (about 7% of the population)

Job Type# of Companies

Seeking Workers% Reporting Unfilled Jobs

Construction, Trades Workers 89 14%Production and Assembly 101 14%Architects,Engineers, Cartographers 64 9%Sales Agents, Real Estate Agents 77 9%Executives, Managers 33 7%IT and Web, Actuaries, Statisticians 41 7%Office Support and Assistants 61 6%Installation, Maintenance, Automotive 36 5%Transportation and Moving Personnel 27 5%HR, Accountants, Finance, Insurance 24 4%Food Preparers, Chefs, Servers 28 4%

Key Workers – Still in Short Supply(2012-13 Grow MN! Results, N = 697)

What Industries Fueled by Immigrant Workers?

Industry % Foreign-Born

% Native- Born

Manufacturing 20% 13%

Retail Trade 8% 12%

Pro’s, Scientific, Management, Admin

14% 9%

Education, Health, Social Services

23% 24%

Arts, Entertainment, RecreationAccommodation and Food Services

11% 8%

TOTAL, TOP 5 76% 66%

(Top 5)Source: Migration Policy Institute 2009

Minnesota’s Immigrant Population Is Highly Educated

For every “low-skill” immigrant without a high school diploma, MN has 1.25 immigrants with “high skills” – a college degree or more.

Skill Level

% of Total MN Immigrant

Population, 2009

Low Skill (< high school)

21%

High Skill (at least a BA)

26%Source: The Geography of Immigrant Skills, Brookings 2011

Worker Shortage: What Do We Do?

• Automate

• Grow elsewhere

• Support in-migration

Entrepreneurs

• 6% of businesses in Minnesota are immigrant-owned

• 5,000 Hispanic-owned (’11) – Up 125% since 2006– Sales > $2 billion

• 11,370 Asian firms (’07)– Asian-Indian firms = 2400, >4,300 employees– Sales > $2.3 billion

• $772 million average annual sales (’06-’10)

• Downtown & neighborhood revitalization

Source: Minnesota Public Radio 2011, Concordia University 2011, CLAC

When you think “American”…

Immigrants Start Businesses

• > 40% of Fortune 500 companies started by immigrants or their children.

• Immigrants started 25% of high tech cos. from 1995-2005, creating 450,000 jobs.

• Immigrants lead some of MN’s largest companies: 3M, Lifetime Fitness, DeCare, Medtronic, Best Buy & Mosaic.

Source: Partnership for a New American Economy, Minneapolis/St. Paul Business Journal

Consumer Power

• Minnesota’s foreign-born: > $5 billion buying power

• Housing market in Minnesota (2000-2010):– 20% of growth in demand due to immigrants– 44% of rental growth due to immigrants– Depressed neighborhoods stabilized; new residents

attracted (including non-immigrants)

Economic Stimulus

• +1,000 immigrant professionals: – +7,100 new jobs by 2020– +$2.5 billion in personal income by 2045

• Reform to seasonal & part-time visas: – 8,800 new jobs– $348 million in personal income by 2020

• Localized effects: – New immigrants may hurt wages of low-skilled

native workers, but net economic benefit to U.S. is $80,000 per immigrant.

Connecting Us to the World

• Foreign investment & expertise key to growth

• MN’s steel & mining industries:– MN Steel (Nashwauk): India– ArcelorMittal Steel (Virginia): India– Gerdau Ameristeel (St. Paul): Brazil– Duluth Metals (Biwabik): Chile– Polymet (Hoyt Lakes): Canada

• Immigrants add diversity… that says, “World Economy Welcome Here!”

Unauthorized Immigrants…No Definitive Data

• 55,000 – 85,000 unauthorized

• Cost: about $176-$188 m per year:– K12 education: $146-158 m - Public health care:

$17 m – Incarceration: $13 m - Varies by

community

• On the other hand: – Annual state & local taxes paid, about $345 m– Limited access to public assistance

• Immediate cost < long term benefit

Hmong MN Experience

1980 2010Median Age 37 19.7College Graduates 5% 12.6%Workforce Participation Rate 27% 59%Median Household Income $17,481 $49,400Household Receiving Public Assist

67% 14%

Homeownership Rate 12% 49%Median Home Value $85,927 $161,10

0

Compiled by Dr. Bruce Corrie, Concordia University, St. Paul

MN’s Economic Reality…2030

• Population ages dramatically

• Labor force growth declines

• New enterprises critical to growth

• Needs foreign $$$s & expertise

• New Americans key to Minnesota’s growth

QUESTIONS?COMMENTS?

The Boom Generation Starts Turning 65 in 2011

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1950 1960 1970 1980 1990 2000 2010 2020 2030

18-24

65+

5-17

Census counts & State Demographer projection, revised 2007

65+ Passes School Age Around 2020

Competition for the Future Workforce Will Increase

6.8%

4.5%

-1.6%-2.2%

13.0%

-1.2%

-3.5% -3.0%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2000-05 2005-10 2010-15 2015-20

Per

cen

t C

han

ge

18-2

4 US

Mn

Census Bureau US Proj, Mn State Demographer revised 2007

Percent Foreign Born - MN & U.S., 1950-2008

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

1950 1960 1970 1980 1990 2000 2006-2008

Minnesota

U.S.