A project of the Partnership for a New American Economy
Iowa, renowned for its importance in American agriculture, was facing major demographic challenges as recently as 2001. The fastest growing segment of the state’s population was residents older than 100; many young people in the state were moving elsewhere. Business owners predicted they would soon face labor shortages at farms and factories.
Size of foreign-born population (2013)
Percent of state’s population that is immigrant
Growth in foreign-born population (2000-2013)
Top countries of origin
However, Iowa was able to avoid labor shortages largely due to an influx of immigrants. According to the American Community Survey, from 2000 to 2013, the number of foreign-born residents living in Iowa grew by 52 percent, well above the national average, reaching more than 137,000 by 2013. This growth was helped along by a concerted move by then-governor Tom Vilsack and many small-town Iowa mayors to welcome the immigrants hired to work in Iowa’s meatpacking plants and farms as new neighbors and residents. Such moves had an impact, especially in small communities that once seemed destined for decline. In Marshalltown, a small community in the central part of the state, a meatpacking plant that once had trouble finding a single applicant for some positions began filling labor gaps with immigrant workers, creating and supporting as many as 1,200 additional jobs for local residents. And in Perry, a once-blighted former railroad town, an influx of immigrants helped the broader Dallas County area become one of the fastest-growing counties in America today.
The growing number of foreign-born citizens in Iowa will also cause a demographic shift that has the potential to drastically shift our electoral map. According to a study by the Partnership for a New American Economy, the foreign-born Hispanic and Asian populations in particular could cause the the electoral makeup of 18 key states to change substantively. In Iowa, there are a total of 53,000 unregistered Asian and Latino voters. Between 2012 and 2016 there will be a total of 17,135 newly eligible Hispanic and Asian voters, by 2020 that number is expected to grow to 38,643. In a high impact scenario, this demographic change could result in 17,049 additional democratic voters in 2016 and 21,613 by 2020
Between 2008 and 2018, STEM fields are projected to play a key role in US economic growth, adding jobs 73 percent faster than the rest of the economy. For Iowa, fixing the US immigration system to make it easier for students trained in America to remain in the country after graduation will be critical: in 2013 more than 40 percent of the students earning Master’s or PhD degrees in STEM from the state’s research-intensive universities were foreign-born. More than 70 percent of students earning engineering PhDs in the state in recent years were also non-citizens. By 2020, Iowa will need to fill 61,500 new STEM jobs and immigrants will play a key role in occupying these positions and continuing to promote economic growth.
Share of STEM graduates at state's most research-intensive schools who are foreign-born (2013)
Share of Engineering PhDs who were temporary residents (2006-2010)
Share of foreign-born advanced degree workers (2000)
Share of foreign-born advanced degree workers (2010)
Immigration Reform = Economic Growth in Iowa
Reforming our immigration system will generate millions of dollars and thousands of jobs across Iowa. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 4,100 jobs and more than $329 million for the state by 2020. Expanding the number of both high-skilled (H-1B) visas will also have positive economic effects. The new H-1B visas awarded to Iowa between 2010 and 2013 will translate into 2,620 new jobs for U.S.-born workers in the state by 2020. REMI estimates that expansion of the H-1B program would result in more than 1,600 jobs and add more than $140 million to Gross State Product by 2014.
In Iowa, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $209 million to Gross State Product in 2014.
Hispanics play an important role in all areas in Iowa, but a report recently published by the Partnership for a New American Economy shows how significant their economic contribution is. Statewide, Hispanics account for $1.6 billion of the spending power. They also pay $556 million in federal, state, and local taxes; $270 million of that amount goes to Social Security and $63 million goes to the Medicare trust fund.
Immigrants are helping to grow housing wealth in some key Iowa counties, as well. Between 2000 and 2010, more than 10,700 immigrants arrived in Polk County, the area that includes the cities of Des Moines and Altoona. By moving into neighborhoods formerly in decline, these immigrants played a role adding to the housing wealth of the neighborhood’s residents. That influx of immigrants added $1,237 to the value of the average home in the county, or more than $210 million to housing wealth there overall.
Immigrants have been integral in helping Iowa grow economically in recent years, especially as the state has struggled, along with the rest of the country, to drive new business and create American jobs. Many immigrants are employed in meatpacking plants and factories, but increasingly more are becoming entrepreneurs. Currently, there are almost 5,000 immigrant business owners in Iowa, generating almost $216 million in business revenue for the state each year.
Number of immigrant business owners
Annual Business Income Generated by Immigrant-Owned Businesses
In recent years, our country’s broken immigration system has also led to some economic challenges for Iowa. Because of a series of high-profile immigration raids on the state’s meatpacking plants, some small towns that were once filled with vibrant immigrant communities have taken economic hits. In Postville, Iowa, for instance, a raid on the town’s kosher meatpacking plant in 2008 resulted in 1,000 Mexican and Guatemalan residents leaving the city in a matter of weeks, draining the town of about a third of its population. Faced with empty restaurants and abandoned homes, Postville’s City Council declared the town an “economic disaster area”—a crisis that still reverberates there today.
In part because of some of the challenges Iowa’s international university students face remaining in America after graduation, the state is also currently short of the professional workers it needs in critical STEM—or Science, Technology, Engineering, and Math—areas, fields that help the state’s economy remain innovative and competitive. According to the nonpartisan advocacy group Change the Equation, from 2009 to 2011 almost 3.4 jobs were posted online in Iowa for every one unemployed STEM worker in the state. Iowa faces one of the most severe STEM worker shortages in the country.
Ratio of STEM jobs to unemployed STEM workers (seventh-highest ratio in the country)
Number of physicians per 100,000 residents
Physician Density rank relative to other states
Share of physicians who graduated from foreign medical schools (2012)
Between 1990 and 2010, Iowa's supply of less-skilled workers born in the U.S. dropped by 174,177. Over that same period, the state's foreign-born, less-skilled labor force grew by 48,839, leaving a difference of 125,338 openings that immigrants could be filling.
Born in Beijing, Ying Sa, the founder of a Des-Moines-based accounting firm that helps immigrants, and her family left China shortly after she finished high school, immigrating first to Toronto, Canada. Sa said it was difficult to adjust to a new language and unfamiliar cultural norms: “I was already an adult by the time I moved from China to Canada,” Sa says, “So I remember the hardship.” After college, Sa moved with her husband to Des Moines, Iowa. “I remember feeling like the only Asian on the planet,” Sa jokes.
While working as the Chief Financial Officer of a nonprofit manufacturing partnership at Iowa State—a “dream job,” Sa says—she was approached by an immigrant janitor, who was scared that a letter he had received from the Internal Revenue Service meant he owed the government money. (As Sa explained to him, he was actually due a refund.) “Within a few months, he had brought in 20 more people with all sorts of financial questions,” Sa says. She began doing pro-bono work part time, helping other immigrants in the Des Moines community. By 2003, one client she helped avoid losing his business donated office space to her side venture. Her company, Community CPA & Associates, grew rapidly. Within a year, Sa was paying her own rent. Four years later, she quit her Vice-President position at Wells Fargo Financial to work at her business full time, and the firm moved to a bigger space. Today the firm employs 10 people in downtown Des Moines, and has 3,500 clients in its database.
However, Sa was almost unable to settle permanently in the United States and grow her business because of a quirk in the US immigration system. Sa’s husband, Steve, another Chinese national, had come to the US as a student. His student visa had required that he return home to China for two years after completing his studies, but Steve subsequently became a Canadian citizen—and fled China. That complicated his citizenship situation and the family spent 10 years trying to get their green cards as a result, racking up almost $85,000 in legal fees. “Every Christmas,” Sa says, “I thought it would be our last one in America.”
Sa and her husband were ultimately able to persuade the US government to overlook their waiver, and they became citizens in early 2011. Sa says she still fears that many immigrant entrepreneurs are unnecessarily turned away by America’s broken immigration system. She recently worked with one family that was deported from America—despite starting a tofu factory that employed Iowans and a letter of support from the state’s governor to support their immigration application. “I want to say to every immigrant business owner that crosses the threshold of my firm that we’ll never leave you alone, and we’ll get you the help you need,” Sa says. “I don’t understand why the government doesn’t want people to settle here who are ready to help generate wealth and create businesses in this economy,” Sa says. “It just doesn’t make sense.”
Immigrants are helping to grow the US economy everywhere, not just in the places—like our biggest cities—that we expect. They are helping to fill labor shortages on America’s farms, starting businesses that employ US workers, and developing the cutting-edge products that make America the world’s preeminent innovation hub.
Click on a state to learn more about the contributions immigrants are making to the local economy.