Insight News

Feb 08th

Immigration: The key to Minnesota growth and prosperity

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While anti-immigrant attention is being drawn to events in Arizona and inflammatory comments are being made by politicians in other states, Minnesota lawmakers and state officials are receiving a study on their desks that makes these sober assessments: 

We depend on immigration in Minnesota. Our state economy and quality of life will become even more dependent on immigration in the coming decade.

These points generally summarize the findings of Prof. Katherine Fennelly, an immigration and public policy expert at the University of Minnesota's Humphrey Institute, and graduate student Anne Huart. They've researched and written a comprehensive report: "2010: The Economic Impact of Immigrants in Minnesota," that is now being printed and distributed to state officials by a grant from the Northwest Area Foundation.

That latter grant, however, came in recognition that this report has information that must be seen and understood by people who would shape or influence future public policy. It could assist people who seek to be builders of the common good; it may temper the baser elements in Minnesota society that might seize on xenophobia, racism and bigotry from elsewhere in America for political gain here at home.

"The impact on communities is most evident," Fennelly said in an interview this past week. "The communities that have growth in the labor force can thank immigrant workers. The schools that have maintained enrollment and programs and (keep communities alive) can thank immigrant children. The other communities have aging population and are in decline."

Equally important, she added, new residents are reviving commercial activity in rural areas and urban neighborhoods, are starting new businesses, are stabilizing housing markets, and are bringing purchasing power that ripples through local and regional economies.

Oh, and these new people pay taxes and make Social Security tax payments that support the aging population that is rapidly reaching retirement age. Even the illegal immigrants, or  "undocumented workers" that allegedly are the cause of consternation in Arizona and other states, contribute mightily for their stay in this country. The study cites a Brookings Institution report that shows more than $560 billion in taxes are collected from wages for Social Security and other purposes that will not be claimed by the payees.   

Such workers, however, are mostly myth workers in Minnesota where documented workers are the source of most new entrants into the labor pool.

The economic benefits of refilling the workforce pipeline is made obvious by the business interests that formed the Minnesota Business Immigration Reform Coalition, an umbrella group that supported the immigrant study. Among members of that group are the Minnesota Agri-Growth Council, Minnesota Chamber of Commerce, Minnesota Milk Producers Association, Hospitality Minnesota and the Minnesota Nursery and Landscape Association.

All these groups, one might say, have enlightened self-interests to discourage biting the hands that feed them, or works with them, or buys their products.

Fennelly sees the immigrant study as supportive of work that State Demographer Tom Gillaspy and State Economist Tom Stinson have done on the changing labor force and economy around the state. In presentations to civic and business groups, the two have focused on the impact of aging and who will do the work in the years ahead.

Gillaspy, for instance, is forecasting a major labor shortage in Minnesota by the year 2020--a forecast that is in step with similar studies around the nation. Unfortunately, such thoughtful forecasting is easy to ignore in a lingering recession with high unemployment.

In a January profile feature in Twin Cities Business magazine, Gillaspy explained to writer Sven Wehrwein that it no longer is a matter of individuals growing older, which has always been the case. Rather, Minnesota "society" is growing older, like in some other developed countries, where the resident population isn't replenishing itself with younger people and workers.

Census data now being assembled should strengthen understanding of the trends spotted by the academic researchers. Meanwhile, here are a few important nuggets found in the Fennelly-Huart study:

In 2008, immigrants represented 8.5 percent of the Minnesota labor force. Meanwhile, half of Minnesota's 87 counties had declining population between 2000 and 2008--the second highest percentage in the Midwest. Given the aging of the state's population, and particularly in rural counties, the number of people in the working age population (15 to 64) is shrinking even faster than total population numbers.

About 40 percent of Minnesota's immigrant population came here as refugees from war-torn and politically unstable countries. As a result, the national origin profiles of Minnesota's foreign-born population varies from national data, with 35 percent from Asia, 26 percent from Latin America (51 percent in U.S.), 18 percent from Africa, 17 percent from Europe and five percent from other regional categories.

Regardless of where the new Minnesotans come from, they tend to be employed or are entrepreneurs starting their own businesses, they constitute new and younger workers, they tend to have families and that in turn keeps school districts and local services functioning for the betterment of communities, and those households have important multiplier-effect impacts on other merchants and service providers in their communities.

Fennelly and Huart summarized it this way:

"Without new, young workers, certain sectors of the economy will continue to contract; by one estimate, if immigrants were removed from the labor force, Minnesota would lose over 24,000 permanent jobs and $1.2 billion in personal income."

Right now, Fennelly said, Latino children are "saving" rural school districts. "Without them, we would have school consolidations and closures all over the place." And Hmong and Somali immigrants and their Minnesota-born children are responsible for revitalizing neighborhoods in the Twin Cities, she added. "That wouldn't happen without new people."

What should be clear is this: "Minnesota Nice" will pay dividends for Minnesota going forward. "Minnesota Ugly" will exact a terrible cost.


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