Immigrants Strengthen Local Economies


Immigrants contribute to strong local economies in many signifi cant ways. First, immigrantsstrengthen local labor markets by bringing needed skills and experience. Second, immigrants are often agents of community revitalization, acting as early movers in bringing commerce and jobs into struggling neighborhoods. Third, despite infl ammatory rhetoric to the contrary, the arrival of immigrants generally results in higher wages for native-born workers.


Strengthen and Diversify the Labor Market

There is increasing competition for skilled immigrants in many industrialized countries with aging native-born populations. “Skilled” does not necessarily mean an advanced degree, but includes many technical occupations in manufacturing, construction, transportation, and other fields. The lack of federal immigration reform has many cities taking it upon themselves to attract skilled immigrants to bolster their local labor markets.


Many of the old gateway cities like New York would have actually seen population declines in the past several decades if not for immigrants. In the past few years, the recognition that immigration will help to bolster the supply of skilled workers is starting to spread into parts of the country where immigrants had been less common.


Several Midwestern cities are now aggressively trying to attract immigrants. In some cases in the Rust Belt, this is part of an effort to reverse decades of population decline and economic stagnation. Some other cities see immigrants as a key to accelerating growth and competing with current hot spots like Atlanta, Austin, or for that matter Charlotte and Raleigh.

Revitalize Neighborhoods and Strengthen Civic Life


Immigrants are often agents of revitalization, early movers in bringing commerce and employment into struggling city neighborhoods and small town Main Streets. In many cases, immigrant entrepreneurs open small to medium-sized businesses in communities that struggle to attract investment. Inexpensive rent can be a major draw for immigrant business owners, who often lack access to startup capital that is more readily available to native populations.


Some immigrant-owned businesses in struggling neighborhoods and Main Streets initially serve members of their ethnic communities, but over time they expand to serve diverse clienteles that are interested in what they have to offer, whether it’s convenience, good quality or prices, or a unique cultural experience. The result is that businesses that originally served neighborhood residents ultimately attract dollars into areas that had not been consumer destinations before. Because of their track record in helping to turn around struggling neighborhoods and Main Streets, many localities are recognizing the role immigrants can play in community economic development. As a result, we are witnessing a proliferation of local efforts to welcome immigrants and to incorporate them in economic development initiatives. 



Immigration Drives up Wages for Most Native-Born Workers


Evidence from North Carolina The North Carolina Department of Commerce divides counties into three tiers: the 40 most economically distressed (Tier 1), the middle 40 (Tier 2), and the 20 most economically successful counties (Tier 3).2 As can be seen in Figure 7, immigrants are most heavily concentrated in counties that are doing better economically. On average, immigrants make up less than 4% of residents in the most economically distressed counties in North Carolina, and they account for almost 7.5% of the most prosperous counties’ residents.

Examining unemployment, poverty, and average earnings provides a more detailed understanding that the sizable immigrant presence and a county’s economic health go hand in hand. As shown in Table 2, counties with larger immigrant populations fare substantially better economically than counties with smaller immigrant populations.


North Carolina counties that were more than 6% immigrant in the most recent census have lower unemployment rates, lower incidents of poverty, and better pay than counties where less than 3% of the population are immigrants. Unemployment is two points lower in North Carolina counties with more than 6% immigrants compared to counties that are less than 3% immigrant. In addition, poverty is more than four points lower in heavily immigrant counties, and average weekly wages are $120 per week higher.

Immigrants contribute to rural economic vitality as well, as can be seen in Table 3. On average, the unemployment rate is 1.6 points lower, the poverty rate is almost 3% lower, and weekly pay is slightly higher in counties that are at least 6% immigrant, compared to counties that are less than 3% immigrant. While the differences are quite not as dramatic as the statewide case, these data reinforce national fi ndings that immigrants tend to bolster the economic vitality of rural economies.

It can be hard to disentangle the causal relationship between dense immigrant population and better economic performance. In many cases, immigrants are clearly attracted to places that are doing better economically. However, there is statistical evidence that the arrival of immigrants does more to cause employment growth than the other way around. It turns out that immigrants tend to arrive ahead of job growth, a sign that immigrants help to improve the economic health of communities.