Those who restrict the entry of refugees and asylum seekers are wrong to claim that humanitarian admission impoverishes America. Refugees and asylum seekers make America a better place, according to new research. Since its founding in 1776, the country has been a safe haven for refugees fleeing conflict and persecution. More than 3 million displaced people have settled in the United States since 1975. Refugee resettlement efforts peaked in 1980, when the country resettled more than 200,000 refugees, most of whom were fleeing communist Vietnam.
Do refugees living on U.S. soil add value to the country or does their presence hurt the United States? Answers in this article.
The view from the Previous Administration
The Trump administration, which includes the president and his top immigration adviser Stephen Miller, believes that admitting refugees is bad for the United States. Donald Trump may be the only president in U.S. history to make defamatory remarks about refugees. Past presidents have often touted America’s role as a safe haven for the persecuted abroad. Trump’s communications aide, Cliff Sims, said Stephen Miller told him, “I would be happy if not one foot of a refugee touched American soil again.”
Fortunately, not all Americans share this position.
What do refugees really do for America?
Today, the U.S. refugee resettlement effort accomplishes an important humanitarian mission while providing enormous economic benefits to the country. Refugees contribute billions of dollars to the economy each year through consumer spending and entrepreneurship, with a net positive fiscal impact. In addition, refugees help revitalize declining regions and create vibrant communities that Americans can proudly call home.
#An important part of the American workforce
Refugees are vital to the U.S. labor market by filling needed jobs and, as a group, have higher employment rates than the U.S.-born population. From 2009 to 2011, the employment rate for working-age refugee men was 67 percent, compared to 60 percent for native-born men during the same period. Refugee women are just as likely to be employed as native-born women. The higher employment rate among refugees mirrors the labor force participation rate of the overall foreign-born population, which also has a higher rate of employment than the native-born population. Refugees are also more likely to be of working age (25-64) than the U.S.-born population and other immigrants.
The high employment rates of refugees and the large working-age population provide evidence that they are likely to be significant contributors to the local economy.
Refugees are employed in a variety of industries, including manufacturing (20.3%), health care (14.2%), and general services (10%), constituting the top three sectors. Refugees who are employed often do not stay in the same jobs; they are promoted to higher paying positions.
#Entrepreneurs who stimulate the economy and create jobs
In addition to seeking employment, many refugees also choose to start their own businesses. In fact, refugees have higher rates of entrepreneurship than the U.S.-born and foreign-born populations. In 2015, more than 181,000 refugee entrepreneurs generated $4.6 billion in business revenue. These businesses provide jobs, goods, and services to thousands of Americans, including foreign and native-born Americans. Refugees are entrepreneurial in sectors such as general services (26.1%), retail (11.2%), and transportation (10.7%). The breadth of fields in which refugee entrepreneurs operate is further evidence of refugees’ adaptability to the economic needs of their place of residence.
In addition, economists have determined that start-ups are primarily responsible for job creation, showing that the entrepreneurial nature of refugees is a more valuable economic characteristic. In fact, start-ups account for nearly 20% of all net job creation and 20% of total employment. Over the past three decades, businesses less than one year old have created an average of 1.5 million jobs per year.
In addition to the thousands of refugee-owned small businesses in the U.S., several refugee-founded companies are among the most recognized in the country, including Google (Sergey Brin), WhatsApp (Jan Koum) and PayPal (Max Levchin). The entrepreneurial spirit displayed by many refugees clearly demonstrates their willingness to work and contribute to the local economy.
#Economic drivers for local economies
In 2015, refugees had $56.3 billion in disposable income to use in businesses in their communities, supporting local economies. Refugees initially had low incomes, with a median annual household income of about $22,000 for the first five years in the United States.
However, over the next few years, their incomes increased significantly. After 15 years in the country, the median annual income is $37,000. Refugee household income is equal to the U.S. household median of $51,000 after 25 years. Twenty-five years later, the annual income of refugee families exceeds the median U.S. household income at $67,000. This increase in household income over time reflects the refugee community’s propensity to invest in human capital, as well as the movement of some refugee populations into white collar jobs.
From 2009 to 2011, the median household income for all refugees was $42,000. Refugee populations that have stayed in the U.S. the longest, such as Vietnamese and Russian communities, have significantly higher median incomes than recently arrived refugees, such as Somalis, Iraqis Russians and Bhutanese. Reducing the economic contribution to the nation based solely on the low initial income of the refugee community ignores the full context of the refugee experience. The longer refugees stay in the U.S., the greater their purchasing power and income, which is good for the economy in the long run.
For example, buying a home is often seen as a sign of economic health, and after a while, refugees show that they can afford to own a home. Burmese and Bosnian refugees who have lived in the U.S. for at least ten years have higher homeownership rates than American Indians (68%) at 73% and 72%, respectively. Refugees also tend to own their homes at higher prices than other immigrants.
When refugees settle in previously declining areas, they have a real impact, helping to spur community development. In Rust Belt cities and elsewhere, refugee resettlement provides a powerful mechanism to help prevent population decline and the spread of urban decay, as well as build vibrant new communities.
A Case Study of the State and Local Impacts of Refugees: The Midwest
When analyzing the impact of refugee resettlement, it is important to consider local economic and financial impacts in addition to national impacts. Refugees are resettled across the United States, but the Midwest, Ohio, Michigan, and Illinois have historically had some of the highest rates of refugee resettlement.
From October 1, 2017, through January 31, 2018, nearly 2,700 refugees were resettled in the Midwest*, accounting for about one-third of all refugee admissions in the United States. Ohio resettled 676 refugees during the same period, most from every state in the country. Other Midwestern states, including Nebraska, North Dakota, South Dakota, and Minnesota, have large numbers of resettled refugees per capita.
Several academic analyses demonstrate the value of refugees’ economic contributions to Midwestern communities. One study found that in southeast Michigan, refugees generated between $22.96 million and $295.3 million in economic activity and between 1,800 and 2,300 jobs in 2016. This includes refugee entrepreneurs whose businesses have an economic impact of $70 million to $90 million and 319 to 410 jobs. Continued refugee resettlement could help spur economic growth and prevent economic stagnation in Midwestern states with the lowest population growth, such as Michigan.
Fiscal Contributors Helping to Solve Demographic Challenges
Refugees face many challenges when resettling: they must establish a new life in a new country and resources are limited. In addition, they may continue to face the traumatic effects associated with fleeing their home country due to conflict or persecution. Refugees receive a variety of services upon arrival to help them adjust to life in the United States and put them on the path to self-sufficiency. Resettlement organizations typically welcome refugees upon arrival and provide housing, clothing, food, and community/cultural orientation. They also help refugees find jobs, health care, legal services, and English classes.
Providing essential services to refugees upon their arrival and transition to life in the United States helps ensure their successful integration into American society and their development as new Americans.
Initially, refugees may receive more services than they pay in taxes. Resettlement organizations provide initial services that lay the foundation for long-term success for refugees, who end up paying more in taxes than they receive in benefits over time. Refugees aged 18-45 paid about $21,000 more in taxes than they received in benefits over a 20-year period. For example, refugees initially participated in the food stamp program, but their use of the program declined significantly over time.
In the Area of health
A Department of Health and Human Services (HHS) report revealed in September 2017 that between 2005 and 2014, refugees were net financial contributors, reaching $63 billion. Specifically, refugees contributed nearly $41 billion in net fiscal benefits to federal and state governments of $22 billion. Refugees and their non-refugee children contributed nearly $53 billion in net benefits to the federal government over the same period. Their net cost to state and local governments was $35.9 billion, primarily due to education costs. But second-generation Americans, including refugee children, have higher levels of average income, education and wealth. They also have lower poverty rates than their parents.
As the research in this article shows, refugees help build the U.S. economy. Refugees are an extremely valuable economic and financial resource. They work hard to start their own businesses, spend money in the local economy, and help revitalize struggling communities.
Refugees have also proven to be extremely positive financial contributors over time, helping to increase the solvency of vital programs like Social Security and Medicare, while dealing with an aging workforce. The sharp decline in refugee arrivals is a missed opportunity for the United States at a time when global demand for refugees for resettlement is at an all-time high.
Such cuts are not only an abdication of the moral responsibility the United States has advocated for decades, but a serious economic and fiscal blunder.
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