A project of the Partnership for a New American Economy
The Pew Hispanic Survey found that almost 2 million foreign-born residents were living in the state in 2011, a number that grew by more than 25 percent between 2000 and 2011. These foreign-born residents play a major role boosting the state’s economy: despite making up 21 percent of the state’s population, New Jersey’s immigrants make up 29 percent of its business owners.
Size of foreign-born population
Percent of state’s population that is immigrant
Growth in foreign-born population 2000-2011
Top countries of origin
According to the Pew Hispanic Center, New Jersey is one of the eight states with a Hispanic population over 1 million. Hispanics play an important role in all areas in New Jersey, but a report recently published by the Partnership for a New American Economy shows how significant their economic contribution is. Statewide, Hispanics account for $22.9 billion of the spending power. They also pay $7.6 billion in federal, state, and local taxes; $3.8 billion of that amount goes to Social Security and $883 million goes to the Medicare trust fund.
The growing influx of immigrants to New Jersey in the last two decades has also added to the state’s diversity. While in 1990 the largest country of origin of New Jersey’s foreign-born population was Italy, by 2011 the three most common countries of origin were India, Mexico, and the Philippines. This has led to a dramatic increase in the economic power of the state’s minority groups. In 2012 New Jersey Latinos had almost $44 billion in purchasing power, an increase of almost 389 percent since 1990. New Jersey’s Asian population saw its purchasing power increase by 687% during that same period.
Between 2008 and 2018, science, technology, engineering, and math--or “STEM”--fields are projected to play a key role in US economic growth, adding jobs 73 percent faster than the rest of the economy. Fixing the US immigration system to make it easier for students trained in New Jersey to remain in the country after graduation will be critical: in 2009 more than half of the students earning Master’s or PhD degrees in STEM from the state’s research-intensive universities were foreign-born. In recent years, noncitizens have also earned more than two out of every three engineering PhDs granted in the state.
Share of foreign-born STEM graduates at the state’s most research-intensive universities, 2009: 50.8%
Share of engineering PhD recipients who were temporary residents, 2006-2010: 70.1%
Foreign-born students create jobs for New Jersey residents and often provide the technological innovations that drive economic growth in the state. A recent study by the Partnership for a New American Economy and the American Enterprise Institute found that for every 100 foreign-born graduate of a US Master’s or PhD program who stays in the United States working in a STEM field, 262 jobs are created for Americans. In 2010 more than one in four STEM workers with an advanced degree in New Jersey was a foreigner.
Immigration Reform = Economic Growth in New Jersey
Reforming our immigration system will generate millions of dollars and thousands of jobs across New Jersey. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 17,000 jobs and more than $1.2 billion 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 New Jersey between 2010 and 2013 will translate into 107,217 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 12,100 jobs and add more than $1.2 billion to Gross State Product by 2014.
In New Jersey, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $1.5 billion to Gross State Product in 2014.
In New Jersey, as in the rest of the country, immigrants play a critical role in driving economic growth and job creation through new business startups. In recent years, foreign-born residents have founded more than one in three of the state’s new businesses. New Jersey has the fourth-highest rate of immigrant business ownership in the US, ranking it behind only California, New York, and Florida.
Share of new immigrant-founded businesses, 2006-2010: 35.2%
Annual business income generated by immigrant-owned businesses: $6.2 billion
Immigrant entrepreneurs have long made significant contributions to New Jersey’s economy. Several of the state’s largest companies, including Honeywell, Merck, Cognizant Technology Solutions, and Goya Foods, were founded by immigrants or children of immigrants. Together, these four companies employ 375,000 people and generate almost $92.4 billion in revenue per year.
New Jersey is currently short of the professional workers it needs in STEM 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 some 1.4 STEM jobs were posted online in New Jersey for every unemployed STEM worker in the state.
Ratio of STEM jobs to unemployed STEM workers: 1.4:1
New Jersey may also need to recruit immigrants to address a coming shortage of medical professionals. The New Jersey physician Workforce Task Force, a government-commissioned research group, has predicted the state will be short almost 3,000 doctors by 2020. The federal government estimates the state could also be short almost 23,358 registered nurses by 2030, leaving about half of the state’s RN positions vacant due to a lack of qualified workers. Immigrants are already playing a major role filling these labor gaps: in 2012 almost two in five active physicians in New Jersey were graduates of foreign medical schools, a higher proportion than in any other state in the country. Graduates of foreign medical schools tend to be overwhelmingly immigrant.
Physician Shortage by 2020: 2,835
Nursing Shortage by 2020: 37,519
Share of physicians who graduated from foreign medical schools, 2012: 38.6%
According to a study by the Center for American Progress and the Partnership for a New American Economy, New Jersey would also benefit significantly if Congress passed the federal DREAM Act, a bill that would legalize the 2.1 million undocumented immigrants brought to the US as children. In New Jersey, legalizing the 75,000 so-called DREAMers in the state would have an estimated $7.2 billion induced economic impact and also create almost 26,800 new jobs by 2030. These benefits would arise because by incentivizing these young people to earn a higher education degree and by allowing them to work legally, the DREAM Act would result in higher earnings and increased spending on products ranging from cars to houses to computers.
DREAMers in the state
Economic impact of passing the DREAM act
Number of jobs created by DREAM act by 2030
Immigrants in New Jersey also create jobs in the state through seasonal and temporary work. According to the US Department of Labor, New Jersey employers were granted certifications to bring in more than 2,000 workers on H-2B visas in fiscal year 2011, placing New Jersey among the top 10 states in the country looking to sponsor H-2B employees. These visas, often used to staff places like amusement parks, hotels, or landscaping services during peak seasons, create jobs for American workers. One study by the Partnership for a New American Economy and the American Enterprise Institute found that for every 100 H-2B visa holders, 464 jobs are created or preserved for American born workers. In New Jersey, the 2,461 visas authorized in FY 2011 supported more than 11,419 American jobs.
New Jersey H-2B Visas (FY 2011): 2,461
Jobs Created: 11,419
The H-2B visa, however, can be costly and cumbersome to attain. Employers typically spend $2,500 for each H-2B visa they sponsor, and must apply to multiple federal agencies in the process. With a more streamlined visa program, job creation in the state could be greater.
Dhiraj Shah grew up in Mumbai, India but since early childhood aspired to come to The United States. Throughout high school, he visited several times and determined that college here in America would give him the best chance to succeed as a computer scientist. He ultimately graduated with honors from New Jersey Institute of Technology, and after graduation was sponsored for a green card by Lawson Software, an enterprise software company in St. Paul, Minnesota. The process, he says, was long but relatively easy.
Shah says his opinions about the US immigration system have since changed. In 2006, Dhiraj joined the large group of immigrant business owners in New Jersey, founding Avaap, an IT services company with a focus on Business Intelligence. Avaap company has grown substantially over the past seven years. In 2011 and 2012, Inc. Magazine featured the firm on its Inc. 500 list, which details fastest growing companies in the nation. But Dhiraj says his growth is stifled by complex immigration laws that do not allow him to find and keep the workers he needs in order to expand. “I’ve had people who have quit and moved back to India,” he says. “We are losing top talent because they don’t necessarily want to stay back in an uncertain world.”
Avaap employs more than 30 people today but Shah says his expansion has been hampered by immigration setbacks. Avaap has lost revenue when valuable workers were unable to finish their work due to issues like delays in processing their visas. Dhiraj says he also cannot always find the specialized workers he needs domestically to replace them. That hurts his ability to create jobs for other American workers—including other, native born engineers and support staff. “We are adding to the workforce here but we can’t do it as quickly as we’d like,” Shah says. He wants to add 20 more workers in the coming months, but worries he will not be able to hire them.
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.