Immigrants Contribute to State's Economy as Small Business Owners

An increasing share of small business owners in Pennsylvania and the nation are immigrants, according to a new report from the Fiscal Policy Institute’s Immigration Research Initiative.

The report breaks new ground by using Census data (including the results of a previously unpublished Survey of Business Owners) to study people who own an incorporated business and whose main job is to run that business.

Here's the takeaway.

Immigrants make up 18 percent (more than 1 in 6) of all small business owners in the United States. By contrast, immigrants are 13 percent of the population and 16 percent of the labor force. That is a big change from the picture 20 years ago, when immigrants made up 9 percent of the labor force and 12 percent of small business owners. 

In Pennsylvania, immigrants account for just 5.4% of the population and 6.4% of the labor force but represent 9.1% of all small business owners.

Immigrants are playing an especially important economic role as small business owners in the Pittsburgh and Philadelphia metropolitan areas, the report shows.

  • In the Philadelphia metro area, U.S.-born business owners represent 2.9% of the U.S.-born labor force, while foreign-born business owners represent 3.5% of the foreign-born labor force. Immigrants in the area account for 9% of the population and 12% of the labor force but represent 14% of all small business owners.
  • In the Pittsburgh metro area, U.S.-born small business owners represent 2.5% of the U.S.-born labor force, while foreign-born small business owners represent 3.0% of the foreign-born labor force. Immigrants in the area account for 3% of the population and 3% of the labor force but represent 4% of all small business owners.

Small businesses are important to the American economy: overall, small businesses provide jobs for 30%  of all private-sector employees.

The Fiscal Policy Institute report is interesting because it provides a level of detail about immigrant business owners that has been previously unavailable.

You can learn more by reading a press release from the Keystone Research Center or reading the full report.

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