A project of the Partnership for a New American Economy
Immigrants have contributed to South Dakota’s economy as taxpayers, workers, entrepreneurs, and business creators. Over the past decade, the state has experienced a large increase in immigration, and cities like Sioux Falls have become home to a growing refugee population. Nearly 4,000 refugees from 34 different countries have arrived in South Dakota since 2000. Immigrants have also helped to slow a rapidly falling population as rural farming declines. In part because of immigration and a growing economy, Lincoln County is now one of the fastest growing counties in the US: it has had a 71 percent growth rate since 2000.
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
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. By 2020, South Dakota will need to fill 14,930 new STEM jobs, but the state’s ability to produce a skilled workforce has lagged behind this growing demand. South Dakota has some of the lowest STEM rankings in the nation: it is 43rd in number of PhD scientists and engineers and 44th in number of patents issued.
In 2009, more than two out of five STEM graduates at the state’s most research intensive universities were foreign-born. Immigrant founders of engineering and technology companies employed roughly 560,000 workers and generated an estimated $63 billion in sales from 2006 to 2012.
The federal government limits new H-1B temporary work visas for private sector workers to 65,000 a year, and there are only an additional 20,000 new H-1B visas available to individuals with US advanced degrees. This means far more skilled workers are waiting for US visas than can be admitted under current law, and many students who graduate here have no clear path to stay in America. Fixing this broken system will be critical to ensuring South Dakota’s continued growth and competitiveness.
Immigration Reform = Economic Growth in South Dakota
Reforming our immigration system will generate millions of dollars and thousands of jobs across South Dakota. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 900 jobs and more than $71 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 South Dakota between 2010 and 2013 will translate into 335 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 330 jobs and add more than $25 million to Gross State Product by 2014.
In South Dakota, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $38 million to Gross State Product in 2014.
In addition to providing valuable support to South Dakota’s workforce, immigrants, specifically Hispanics, are also contributing to South Dakota's economy. A recent study by the Partnership for a New American Economy found that Hispanics account for $353 million in South Dakota’s spending power. Hispanics also contributed $119 million in combined federal, state, and local taxes. A total of $58 million of those taxes went to Social Security and $14 million was paid to the Medicare trust fund.
Immigrants are helping to grow housing wealth in some key South Dakota counties as well. Between 2000 and 2010, more than 2,831 immigrants arrived in Minniehaha County, the area that includes the city of Sioux Falls. By moving into this neighborhood, immigrants played a role in adding to the housing wealth of the neighborhood’s residents. That influx of immigrants added $327 to the value of the average home in the county, or more than $21 million to housing wealth there overall.
Immigrants have been integral in helping South Dakota 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. The Partnership for a New American Economy found that immigrants or their children founded 40 percent of the 2010 Fortune 500 companies. Immigrant entrepreneurs in South Dakota started more than 50,000 new businesses from 2006 to 2010. As of 2010, the state’s 452 Asian-owned businesses had sales and receipts of $203.8 million and employed more than 2,800 people, while 595 Latino-owned businesses had sales and receipts of $317.4 billion and employed more than 1,200 people.
In part because of some of the challenges South Dakota’s international university students face remaining in America after graduation, the state is currently short some of the professional workers it needs in critical STEM areas, the very fields that help the state’s economy remain innovative and competitive. According to the nonpartisan advocacy group Change the Equation, there are currently 2.6 STEM jobs available for every unemployed person in South Dakota. Employers cannot find enough qualified candidates to fill the STEM jobs needed, even with the current number of immigrant STEM workers.
South Dakota may also need to recruit immigrants to address a coming shortage of medical professionals. The federal government estimates that the state will be short almost 2,200 registered nurses by 2020, leaving one in every five RN positions vacant. The state also is facing a looming physician shortage: there are currently 217 active physicians per 100,000 residents, ranking it 36th in the nation. Additionally, a quarter of all physicians are older than 60, and a fifth of medical school trainees leave the state. South Dakota can benefit from international medical graduates who help fill the workforce shortfall. International medical graduates compose approximately 14 percent of all active physicians in South Dakota and play a critical role in our healthcare system.
Share of physicians who graduated from foreign medical school (2012)
Share of physicians age 60 or older
Share of all medical trainees who leave the state after graduation
Immigrants in South Dakota are creating jobs through their seasonal and temporary work. Between 1990 and 2010, South Dakota's supply of less-skilled workers born in the U.S. dropped by 25,874. Over that same period, the state's foreign-born, less-skilled labor force grew by 3,614, leaving a difference of 22,260 openings that immigrants could be filling. Some of the state’s largest industries, including manufacturing, construction, and transportation and utilities, rely on immigrants to fill vacant jobs. According to the US Department of Labor, South Dakota employers were granted certifications to bring in 1,300 workers on H-2B visas in fiscal year 2011. 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 South Dakota, the visas authorized in 2011 supported more than 6,000 American jobs.
Number of South Dakota H-2B Visas (FY 2011)
South Dakota’s agricultural industries – dairy, ranching, and crops – also benefit from the H-2A visa program, which allows immigrants to find temporary or seasonal agricultural work. Agriculture is partially dependent upon immigrants to fill crop picking and other duties that cannot be filled with American labor. In 2010, of 532 H-2A visas requested in the state, only 96 were actually certified.
However, these guest worker programs face many other challenges. There continues to be relatively low levels of participation in the H-2A program across the country. And H-2B visas 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.
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.