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Immigrant capital: A new economic base

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opinion Bemidji,Minnesota 56619
Bemidji Pioneer
Immigrant capital: A new economic base
Bemidji Minnesota P.O. Box 455 56619

We are inundated with stories about the costs and burdens of immigrants. This is a myopic view as it focuses only on fiscal costs. What's missing is a larger picture of how immigrants interact in our economy -- as entrepreneurs, consumers, workers, human capital, civic capital, fiscal capital, cultural capital and global capital. I call this immigrant capital.


When we look at immigrant capital we can see a different picture of the role of immigrants in our economy.

One just has to visit certain commercial corridors in the Twin Cities to see how immigrant entrepreneurs have vitalized run-down neighborhoods by providing services and jobs, and serving as role models in their communities. Immigrant entrepreneurship is also occurring at the high-tech level in areas such as alternative energy, information systems and manufacturing. The number of Asian and Latino firms is growing at a much faster rate than all the other firms in the state.

Immigrants consume goods and services. Analysis of census data for Minnesota shows that the buying power of Asian, Latino and African immigrants is around $5 billion. Nationally, African immigrant buying power is estimated to be larger than the GDP of most countries in Africa -- an estimated $45 billion. Immigrants also introduce new products and services to the local economy.

Immigrant workers complement the local workforce by working in areas such as the meat packing industry or the hospitality industry. They are also serving as doctors and high-tech workers in rural Minnesota. Minnesota is facing a looming worker shortage as the population ages. In this context, Asian and Latino workers are an increasing share of the prime worker base in Minnesota.

Immigrants also add to the quality of human capital in Minnesota as many immigrants from Asia and Africa have skill levels higher than the native population. They are also becoming an increasing presence in rural Minnesota schools that are facing declines in student population.

Immigrants play an important role in the civic life of the state. Apart from being elected to the Legislature and local offices, they also have a presence in the governor's cabinet. Many serve as a vast army of volunteers to all political parties actively engaging in the political process.

Immigrants also add to the fiscal revenue of the state. Asian, African and Latino workers are going to be an increasing share of the prime tax base of the future, currently paying about $787 million in state and local taxes in Minnesota.

Immigrants add to the cultural capital in Minnesota's theater, arts, music, dance and cuisine. They have added new festivals to the cultural landscape. For example, we now have the annual dragon festival and boat race that is increasingly becoming very popular in the summer. Chicken curry could soon be the new hot dish of Minnesota.

Immigrant global networks are increasingly being tapped to improve the state's competitiveness. Before major trade missions to India, China, Mexico and Japan, Minnesota governors have tapped into the local immigrant community to help build bridges into the future.

Immigrants have responded with new global organizations such as the India Chamber of Commerce and the U.S. China Business Council. These networks are also seen in the non-profit and cultural areas from providing immediate responses to the tsunami in Sri Lanka and the earthquake in Haiti to offering long-term assistance to countries around the world.

Further analysis of the impact of immigrants on various sectors of the Minnesota economy shows a more detailed picture of immigrant capital: the approximately 4,000 Liberians in the health care sectors in Minnesota have an estimated $300 million impact on the economy and the almost 2,500 workers of Mexican origin in the meatpacking industry have an estimated $432 million impact on the larger economy.

When we look at the progress of the Hmong in Minnesota we see a great return on our investment. For example, from 1990 to 2007 Hmong poverty rates and welfare dependency have declined dramatically while homeownership rates, college graduation rates and workforce participation rates have increased significantly.

Immigrant capital is making Minnesota and America strong. It's time to change the paradigm of how we view immigrants in the economy.

Bruce Corrie is an economist and dean of the college of business and organizational leadership at Concordia University in St. Paul.

Pioneer staff reports