PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Foreign-Born Entrepreneurs and Workers Essential to U.S. Economy

By at 22 May, 2024, 8:14 am

by Raymond J. Keating –

A stagnating, skewing-older population, along with diminished labor force participation, are creating problems now, and will continue to do so into the future, for U.S. economy in terms of a tight labor market, and a diminished pool from which entrepreneurs can emerge. That is, unless policies change in a pro-immigration, pro-entrepreneur, pro-growth direction.

Indeed, immigration has worked to counter or slow the aforementioned counter-productive trends, and will be necessary as we look ahead.

The latest “Foreign-Born Workers: Labor Force Characteristics – 2023” report from the U.S. Bureau of Labor Statistics provides some important insights. Consider the following:

 “In 2023, the foreign born accounted for 18.6 percent of the U.S. civilian labor force, up from 18.1 percent in 2022.”

● “In 2023, the labor force participation rate of the foreign born increased to 66.6 percent. The rate for foreign-born women increased to 56.1 percent, while the rate for foreign-born men changed little at 77.5 percent. The labor force participation rate of the native born rose to 61.8 percent. The rate for native-born women increased to 57.6 percent, while the rate for men was little changed at 66.1 percent.”

● “By age, the proportion of the foreign-born labor force made up of 25- to 54-year-olds (70.3 percent) was higher than for the native-born labor force (62.3 percent). Labor force participation typically is highest among people in that age bracket.”

● “In 2023, the employment-population ratio—the number of employed people as a percentage of the civilian noninstitutional population—of the foreign born increased to 64.2 percent. The ratio for foreign-born women rose to 53.9 percent, while the ratio for men was little changed at 74.8 percent. The employment-population ratio of the native born rose to 59.5 percent. The ratio for native-born women increased to 55.7 percent, while the ratio for men changed little at 63.6 percent.”

So, overall, we see a trend of higher rates of labor force participation and employment among the foreign born versus the native born, in particular, among men. In addition, the share of individuals in the key working ages of 25-54 years old is notably higher among the foreign-born population versus the native-born population.

For good measure, the rate of entrepreneurship is much higher among immigrants versus the native born. For example, an MIT study reported “that, per capita, immigrants are about 80 percent more likely to found a firm, compared to U.S.-born citizens.”

This all speaks to a clear need to put aside pandering politics on the issue of immigration, and getting serious about establishing reforms so that our immigration system welcomes those who seek to work and build better lives. Immigration is an economic positive from which the U.S. has long benefited, and for which it is in clear need of now and into the future.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

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