A project of the Partnership for a New American Economy
Pennsylvania has a long history of welcoming immigrants. William Penn, the founder of the Pennsylvania colony, famously made his settlement inviting to immigrants of different ethnicities and religions. Today Pennsylvania is home to more than 750,000 immigrants. Despite this, when policymakers in the state have recently debated how to deal with an influx of more recent immigrants from Mexico, many have considered how they can discourage more immigrants from moving there. Hazelton, a mining town in the northeastern part of the state, instituted a citywide ordinance in 2006 banning landlords and business owners from conducting transactions with undocumented immigrants.The ordinance was later overturned by the courts. At the state level, legislators introduced similar, unsuccessful anti-immigrant bills in 2010, making immigration reform a particularly salient issue.
Size of foreign-born population
Percent of state’s population that is immigrant
Growth in foreign-born population 2000-2010
Top countries of origin
Between 2008 and 2018, science, technology, engineering, and math (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 Pennsylvania to remain in the country after graduation will be critical: in 2009 almost one in three 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 60 percent of the engineering PhDs granted in the state.
Foreign-born students create jobs for Pennsylvanians 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 seven STEM workers with an advanced degree in Pennsylvania were foreigners.
Immigration Reform = Economic Growth in Pennsylvania
Reforming our immigration system will generate millions of dollars and thousands of jobs across Pennsylvania. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 16,100 jobs and more than $1.3 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 Pennsylvania between 2010 and 2013 will translate into 25,477 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 9,400 jobs and add more than $872 million to Gross State Product by 2014.
In Pennsylvania, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $1.1 billion to Gross State Product in 2014.
A recent study by the Partnership for a New American Economy found that Hispanics account for $8 billion in Pennsylvania’s spending power. Hispanics also contributed $2.8 billion in combined federal, state, and local taxes. A total of $1.3 billion of those taxes went to Social Security and $312 million was paid to the Medicare trust fund.
Over the past 30 years, the single biggest driving force behind economic growth in the US has been new business generation. Across the US, immigrants start more than a quarter of all businesses in seven of eight sectors of the economy that the federal government expects to grow the fastest over the next decade, including healthcare, construction, retail, and educational services. In Pennsylvania, as in many places around the country, immigrants are punching above their weight class as entrepreneurs: immigrants currently own 8.2 percent of Pennsylvania businesses despite making up just 5.9 percent of the state’s total population. From 2006 to 2010 immigrant businesses in the state generated almost $2.2 billion in income per year.
Immigrant entrepreneurs have long been a critical component of Pennsylvania’s economic landscape. Some of Pennsylvania’s largest companies, including Comcast, US Steel, PPG Industries, and Cigna Health Insurance were founded by immigrants or their children. Together, these four companies employ 243,000 people and generate almost $128 billion in revenue per year.
Although the foreign-born share of Pennsylvania’s population is 5.9 percent, the foreign-born share of the state’s labor force is 6.3 percent, a small but significant increment that shows immigrants are making an outsized contribution to Pennsylvania’s labor force. Pennsylvania is currently short some of the professional workers it needs in STEM areas, fields that help the state’s economy remain innovative and competitive. Pennsylvania is projected to have 314,000 STEM jobs by 2018, but the state’s ability to produce a skilled workforce has lags behind this growing demand. According to the nonpartisan advocacy group Change the Equation, from 2009 to 2011 some 2.42 STEM jobs were posted online for every 1 unemployed STEM worker in the state.
The role of highly educated immigrants in the health professions will also be important in curbing the state’s impending shortage of healthcare workers. The federal government estimates Pennsylvania could be short 4,091 registered nurses by 2030, leaving almost a third of all RN positions vacant. The state also faces challenges in terms of access to doctors: although there are currently 302.4 active physicians per 100,000 residents, a quarter of all the state’s physicians are older than 60, and only 40 percent of medical school trainees stay in the state. Immigrants are already playing a major role filling such labor gaps in Pennsylvania: in 2012 almost one in four active physicians in the state were graduates of foreign medical schools.
Share of active physicians who are over age 60: 25.3%
Share of medical trainees who leave the state after graduation: 41.5%
Share of physicians who graduated from foreign medical schools, 2012: 22.8%
Foreign laborers in Pennsylvania are also helping to create jobs in the state through seasonal and temporary work. According to the US Department of Labor, Pennsylvania employers were granted certifications to bring in more than 1,700 workers on H-2B visas in fiscal year 2011. These visas, which are used to staff places like amusement parks, hotels, or landscaping services during the peak season, protect American jobs to allowing companies to take on more work or stay operational. One study by the Partnership for a New American Economy and the American Enterprise Institute found that for every 100 H-2B visa workers, 464 jobs are created or preserved for American born workers. In Pennsylvania, that means the visas authorized in fiscal year 2011 supported nearly 16,000 American jobs.
H-2B visas, however, can be costly and cumbersome to attain. The average employer spends $2,500 for each H-2B visa it sponsors, and applies to multiple federal agencies in the process. A more streamlined visa program could promote greater job creation in the state.
Growing up in southern India, Jeevan Pendli saw the effects of insufficient healthcare in poor neighborhoods and rural towns, but was surprised to encounter similar problems in America. Rural populations 15 minutes from his home in Pittsburgh did not have access to high-quality healthcare. Pendli had experience in the medical field working for healthcare companies GlaxoSmithKline and CIGNA, as well as for non-profits focused on improving women’s access to care. While studying for his MBA at Carnegie-Mellon University, he began to consider how he could change the provision of health care in rural communities through entrepreneurship.
The start-up – an application for mobile devices called PHRQL (pronounced ‘freckle’) -- connects medical professionals to patients and patients to each other, providing real-time information and creating a network of support and sharing among those who use it. Pendli and his co-founders were featured in the local media, received funding, and were invited to healthcare summits around the country. In November 2012, the company received its first major contract, an agreement that allows them to connect customers at Giant Eagle supermarkets with dieticians while they shop.
Despite his success, Pendli struggled to find a way to stay in the US. After graduation in 2011, he received a temporary visa, and began to fear he would not be able to get a green card. “I was very stressed, I couldn’t focus on the company,” he says. Ultimately, Pendli decided to take a job with a large company, one that could sponsor his green card application, giving up working at the company he says was his passion.
Three months into his new job, Pendli still had not received his green card. He was also unable to visit his parents for two years because he was afraid of traveling to India; he had seen too many friends get stuck trying to re-enter the country, regardless of their visa situation. “Right now,” he says, “people are taking their US education back to their home country to do different things. The world is becoming flatter. We might lose some great companies here.”
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.