The Ellis Island Economy

Immigrants fuel growth in cities and are nearly 30 percent more like to start businesses than native-born Americans. A recent conference on immigrants’ roles in cities sparked debate over how cities can foster immigrant businesses.

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The next time you buy a pair of jeans from Forever 21, you might consider that the retail clothier was founded by a Korean immigrant to the United States. Although the popular imagination often associates immigrant entrepreneurs with mom-and-pop storefronts, first-generation immigrants have started some of the country’s most permanent corporations. A short list includes Warner Brothers, Anheuser Busch and Max Factor.

The Center for an Urban Future, a New York-based think tank, released an in-depth study last year indicating that immigrants have become engines fueling economic growth in cities from Los Angeles to New York, creating new jobs and transforming “once-sleepy neighborhoods” into commercial centers. Late last month, the Center convened a daylong conference to explore advancing the potential for immigrant entrepreneurs to boost city economies. Among the conference panelists were micro-lenders, research institutions, immigrant entrepreneurs and settlement agencies. Moderators included Center director Jonathan Bowles and New York Times Metro Reporter Sewell Chan.

Consider the statistics: Immigrants are nearly 30 percent more likely to start businesses than native-born Americans. The evidence is all over American cities. In Los Angeles, a 2005 report counted immigrants as the creators of at least 22 of the city’s 100 fastest growing companies. In Boston, immigrants have fueled the resurgence of several neighborhoods, including Fields Corner, East Boston and Allston Village.

Two trends that point to immigrants playing an even more critical role in the economy of American cities in the future are their continued population growth and the ongoing move by large companies to outsource labor to distant shores. By offering jobs here in the states, immigrant entrepreneurs help to counter the job losses of outsourcing. Even during economic downturns, immigrants tend to continue to start businesses and create jobs.

But despite their crucial role in economic growth, immigrants remain a vastly ignored part of city economies and disconnected from local economic development planning, says CUF.

Maria de Lourdes Sobrino, a panelist, is the quintessential example of an immigrant entrepreneur whose once-small company has grown exponentially. She founded Lulu’s Desserts in 1982 in a small storefront in Los Angeles. By 1999, Wal Mart was one of her clients. Her company is now a $10-million business that employs 100 people. But getting there wasn’t a piece of cake: The company failed several times before she even knew how to write a business plan and what support was available to her.

In Silicon Valley, Asian immigrants are what make the technology sector tick, said panelist Vivek Wadhwa, a Business Week columnist and fellow at Harvard’s Labor and Worklife Program. But he notes: “If we want more immigrants starting hi-tech businesses the government has to address the visa problem.” Even entrepreneurs who are filing technology patents, he explains, are often granted only temporary visas.

Fatimah Muhammad, manager of the Welcoming Center for New Pennsylvanians, said that immigrants have led the resurgence of many Philadelphia neighborhoods, including West and South Philadelphia. As a result, something she sees a lot of native-born resentment of immigrant businesses that, along with immigrants’ language barriers, makes them targets of crime.

New York City, too, demonstrates how immigrants businesses can ignite prosperity in once-barren or blighted areas. In Asian immigrant-populated Flushing, Queens new businesses increased by 54.6 percent between 1994 and 2004. And in Sheepshead Bay, Brooklyn, an overwhelmingly Eastern European area, 33.7 was the percentage. Those are just two of numerous neighborhoods that have surpassed the 9.6 overall growth rate of city businesses.

Though they face some of the same obstacles common to all entrepreneurs, immigrant entrepreneurs can meet staggering roadblocks. The most obvious one is the language barrier. A less-obvious but no less significant obstacle is that immigrants generally don’t seek help from city or other agencies that support small businesses because they don’t trust them.

Panelists agreed unanimously that there is only one way to efficiently tackle this: Going on-site is the key. Agencies that offer services must get better at reaching out to and educating entrepreneurs at their businesses. They also agree that the multiple agencies must partner, or create a task force, for widespread results, though disappointingly, the how-to of that topic was never explored at the conference.

One of the biggest impediments to immigrant-owned businesses is lack of knowledge about licensing, permits and regulations. Countless immigrant business owners pay hefty fines for their ignorance. Panelist Yanki Tshering, director of the Business Center for New Americans, believes that too many fines are levied against immigrant-owned restaurants. “In theory, New York paints itself as pro-immigrant but much more could be done,” she said.

Panelist Victor Ashok Vora, a Brooklyn-based owner of two Subway franchises and the borough’s Greyhound station, remembers when he was unaware of health department regulations. Once, an employee at one of his Subway locations accepted a frozen food delivery without a hat on and a fine was levied against him. And the permits are just as taxing: He’s opening another business and found that he needs 18-19 of them.

So what role should government play in helping to combat some of the hindrances faced by immigrant entrepreneurs?

Joyce Moy, executive director of the Asian American/Asian Research Institute at City University, would like to see the Community Reinvestment Act invest more in the communities where they are making their money. Vora says “help rather than policing and collecting fines,” is key. He also believes immigrant entrepreneurs should receive tax cuts, at least during the start-up phase of their businesses.

Though both instructive and revealing, the conference lacked exploration of one of the most critical topics: access to agencies. If immigrants are essential to the economy of cities, and their biggest impediment is access to agencies that can support them, the conference could have provided a forum for discussing more concrete ways for creating that access.

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Hamida Kinge has written about everything from food security to ocean acidification to luxury cell phones. She was a 2009 fellow of the Scripps Howard Institute on the Environment and a 2008/09 reporting fellow of the Metcalf Institute for Marine & Environmental Reporting. She has contributed to Next American City, Grist, Philadelphia City Paper and U.R.B. domestically as well as Europe-based magazines Essential Macau and Straight No Chaser. For the past year, she has been teaching English as a foreign language to international students and business professionals. Hamida has also been a volunteer English tutor for the International Center in New York.

Tags: new york citylos angelesimmigration

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