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New Jobs Program: More or less opportunities for immigrants in USA?

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On December 08, 2009, President Obama outlined a proposal to encourage small business to hire workers in 2010 by opening lines of credit and offering tax breaks.  The impact of this proposed measure will be different for foreign-born low-tech entrepreneurs and foreign-born high-tech entrepreneurs. Prior to the crisis, self-employment was spreading among foreign workers in USA and in Europe. According to the U.S. Small Business Administration (2007) “the self-employment rate for foreign-born residents of the Unites States has grown faster that of native born residents over the past ten years”. Lack of access to employment opportunities commensurate with immigrants’ human capital may encourage them to look for self employment, business alternatives.

High-skill and low-skill immigrant entrepreneurs tend to concentrate in certain niches. For example, Salvadorian, Colombian and Dominican firms are concentrated in retail sales and business services (Robinson, 2005). Immigrant-owned firms are mainly retail, wholesale, personal and professional service enterprises and are typically operated by family members. The management structure is comprised of the immigrant owner and his/her close family members and relatives (Page and Plaza, 2006). Foreign-born founders of “high-impact” companies in high tech sectors are concentrated in business services and engineering services and located in the states with large foreign-born residents such as California and Texas. (Hart, Zoltan and Spencer, 2009).

Despite the stimulus package many businesses remain reluctant to hire. The U.S. fiscal stimulus package or the Troubled Asset Recovery Program complicated the hiring of foreign workers for companies receiving federal bailout funds. (The TARP program has been extended until October, 2010).

What will be the impact of this new job program initiative on immigrants?

  • For foreign-born high-tech entrepreneurs companies, there is still availability of non- immigrant employment visas. Not only has there not been a lottery this year, unlike in previous years, but there are still visa slots available as of December 15, 2009. Approximately 64,200 H-1B cap petitions had been filed (see USCIS site). If a company wants to hire a foreign professional to start working prior to October 2010, sooner there will not be visas available.
  • For foreign-born low-tech entrepreneurs companies in construction, restaurants, food processing, building maintenance and cleaning services, the issue will be how the restrictions on undocumented workers and how the use of e-verify to determine the employment eligibility of new hires will affect the hiring of immigrants. These firms do not have many options available given that all the visas for temporary unskilled workers have been awarded. It will be only possible to hire undocumented workers.

It seems that the new measures will continue affecting the hiring of foreign workers.


Sonia Plaza

Senior Economist, Finance, Competitiveness and Innovation Global Practice, World Bank

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