The Economic Impact of Immigrants in Minnesota

Katherine FennellyAnne HuartHumphrey Institute of Public AffairsUniversity of Minnesota

Enormous diversity: immigrants, refugees, low and high-skilled workers and their families

Aging citizens + Need for young work force

+ insufficient visas for workers =

large undocumented population and underclass who are major economic contributors to the state & the US

Aging citizens

The Graying of the U.S. Population

Source: Fed. Interagency Forum on Aging, 2000

01020304050607080

millions

Projected Increase in U.S. Population Over Age 65

Projected Changes in US Labor Force 1998-2008: Three Million Fewer Workers Ages 25-44

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Workers 25-44 Workers 45+

Source: Dohm, 2000

Minnesota’s Boom Generation Begins 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

18-2465+

Source: Stinson& Gillaspy, 12/05

Aging in Minnesota

By 2020 Minnesota will have more retirees than school children

Source: Atkins et al. 2020 Caucus Strib 2/26/06

Need for young work force

demand for both high skilled and low skilled workers

Nearly 6 million new jobs will be created between 2004 and 2014 that require only short-term on-the-job training*

Percent of projected openings 2000-2010 by training required

21%

9%

6%

7%

15%

42%

BA+Assoc/ Voc DegreeRelated Work ExperLong-term OJTModerate-term OJTShort-term OJT

* BLS; pie chart source: Paral, 2006 using BLS Data

Few Natives Available for Low-Skilled Jobs

Non-High School Graduates in 2005:

Native-born: 12 %

Foreign-born: 33 %Foreign-born Hispanics: 54 %

Source: US Census Bureau, “EducationalAttainment in the US: 2005”, 9/06

Industries Relying on Unauthorized Immigrant Workers

21% of private household workers24% of farm workers17% of cleaning crews12% of food preparation workers12% of construction workers10% of leisure & hospitality employees

Overall: 5% of US Civilian Workforce

Source: Pew Hispanic Center Fact Sheet “The Labor Force Status of Short-Term Unauthorized Workers, 2005” , April 13, 2006

Growth in Minnesota Labor Force Attributable to Latinos 1990 and 2000*

Source: Census, U.S. Bureau of the. 1990 Census and 2000 Census Sf3 MNPlanning Data Net, 2002 [cited 2/28/03 2003]. McMurray, Martha. "Minnesota Labor Force Trends 1990-2000." Minnesota Planning OSD-02-101, no. December, 2002

24%

Selected Non-Metro Minnesota Cities with the Largest Hispanic Populations: School Enrollments With and Without Hispanic Students, 1999–2008

50000

55000

60000

65000

70000

75000

80000

85000

99-'00 00-'01 01-'02 02-'03 03-'04 04-'05 05-'06 06-'07 07-'08 08-'09

Academic School Year

With HispanicsWithout Hispanics

*School Districts Included: Crookston, Moorhead, St. Cloud, Willmar, Marshall, Glencoe Silver Lake, Mankato, Northfield, Faribault, St. James, Worthington, Owatonna, Rochester, Albert Lea, Austin

Latino Children are Keeping Rural Schools from Closing or Consolidating

Open letter from 500 economists*, June, 2006

“Immigration is a net economic gain for America and its citizens, and the greatest anti-poverty program ever devised”

*including 5 Nobel Laureates

President’s Council of Economic Advisors, June, 2007

“On average, US natives benefit from immigration. Immigrants tend to complement (not substitute for) natives, raising natives’ productivity and income.”

Inequitable distribution of fiscal benefits

* In the short-term rapid demographic changes cause some stresses

* Funds that accrue at the federal and state levels and to large employers of immigrants don’t ‘trickle down’ to localities with high proportions of immigrants

How much do immigrants cost?

High costinvestment

Low cost investment

Studies often over-state the cost of immigration by measuring costs before adults reach working age

Most immigrants pay the same taxes as US-born residents

Income taxesProperty taxesSales taxesBusiness taxesProperty taxesFewer tax breaks

Insufficient Visas

Restrictions Under NAFTA for Meeting the Demand for Workers:

on the one hand, the free flow of capital, goods, and services has been expanded

on the other hand, the flow of labor has been the subject of massive enforcement efforts and legal restrictions

Source: US-Mexico Migration Panel, Carnegie Endowment for International Peace, 2001

Percentage of Employment-Based Visas That Were Issued for Low Skilled Jobs: 2002*

99%

<1%

Source: Jachimowicz, 2004Workers in less-skilled jobs received only 16 percent of all temporary employment and training visas awarded in 2002. (Paral, 2005)

Need to lift the country cap of 26,300 visas

Value of goods exported from the US to Mexico in 2006:

$866,000,000,000

Bureau of the Census, Foreign Trade Division,

Aging citizens + Need for young work force

+ insufficient visas for workers =

large undocumented population and underclass who are major economic contributors to the state & the US