Immigrant Entrepreneurs Don’t Outperform Natives

You’ve surely heard this familiar refrain in the immigration reform debate: Newcomers to the country take jobs away from hardworking U.S. citizens. The reality, however, isn’t nearly that straightforward. And particularly when it comes to America’s small business sector, immigrants actually do our economy a huge service. Immigrants form and run small businesses at higher rates than the general population . . . One out of 10 immigrant workers owns a business. . . . They’re more likely to hire employees, though they hire fewer, on average, then their U.S.-born counterparts. – Why Immigrants Are Vital to the Future of American Entrepreneurship, Julie Kliegman, theweek.com, 9/18/15

Fact Check: Immigration advocates constantly claim that immigrants far exceed U.S. natives in entrepreneurship, and that they offset the jobs they take by creating jobs in the U.S. What’s the truth? Probably the best source of information is the 2015 Current Population Survey (CPS) conducted by the Bureau of Census for the Bureau of Labor Statistics.

It reveals that there is almost no difference between the percentage of immigrants who are self-employed (11.4 percent) and natives (11.1 percent). This slight edge in favor immigrants, however, is mitigated in favor of natives because of several factors. One is that natives have a higher rate of part-time self-employment, 1.7 percent, compared with one percent for immigrants. Another is that a higher percentage of native-owned businesses (19 percent) employ more than ten workers, compared with 16 percent for immigrant-owned firms. Also, immigrant-owned businesses tend to hire other immigrants, usually of their national background, rather than natives.

The myth of superior immigrant entrepreneurship derives from the fact that some immigrant groups do significantly outperform natives, but other immigrants significantly do not. On average, immigrants do reasonably well in business, achieving at a level comparable to that of natives. But they are not the entrepreneurial supermen portrayed by immigration advocates.

 

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