A project of the Partnership for a New American Economy
Though a predominantly conservative state, policymakers in Utah and members of the community have managed to find a middle ground on immigration issues. In 2010, business leaders, community activists, religious leaders, law enforcement officials, and many other Utah residents came together to write the Utah Compact, a declaration calling for smart immigration reform that is business friendly and compassionate. The Utah Compact is widely credited with helping push through a series of immigration bills that Governor Gary R. Herbert signed into law in 2011. The measures included a guest-worker permit law, that allows undocumented immigrants to stay in the state as long as they pay a fine, are actively working, and have no criminal record. The law also requires law enforcement officials to verify the immigration status of people arrested for felonies and some misdemeanors. Although each measure had its opponents, this balanced approach to state immigration law was the first bill of its kind in the nation, and many cited it as a possible model for federal policy. The Utah Compact has inspired several other states to do the same - Indiana and Iowa have signed identical declarations, and other states are considering following suit.
Size of foreign-born population
Percent of state’s population that is immigrant
Growth in foreign-born population 2000-2010
Top countries of origin
This kind of legislation is all the more important in Utah, a state that has seen its foreign-born population jump by almost 50 percent between 2000 and 2011. Today, according to analysis by the Pew Hispanic Center, in 2011 more than 8 percent of Utah’s population is foreign-born, or almost 237,000 residents. The largest groups are from Canada, El Salvador, and Mexico. Mexicans in particular constitute a large community in Utah and they contribute heavily to the state’s economy: According to a study by the University of Utah, Mexican immigrants there have more than $1 billion in purchasing power and pay millions in taxes.
Immigrant students in Utah also contribute to critical Science, Technology, Engineering, and Math, or STEM fields. Between 2008 and 2018, STEM industries are projected to play a key role in US economic growth, adding jobs 73 percent faster than the rest of the economy. For a state like Utah, fixing the US immigration system so that it is easier for students trained in America to remain in the country after graduation will be critical: in 2009, 29 percent of the students earning Master’s or PhDs in STEM fields from the state’s research-intensive universities were foreign-born. More than half of the students earning engineering PhDs in the state in recent years were also noncitizens.
Foreign-born students create jobs for Utah 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. That translates into a significant employment boost for Utah, where the state’s share of foreign-born STEM advanced degree holders working in STEM fields grew significantly between 2000 and 2010, by 72%.
Immigration Reform = Economic Growth in Utah
Reforming our immigration system will generate millions of dollars and thousands of jobs across Utah. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 6,100 jobs and more than $475 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 Utah between 2010 and 2013 will translate into 1,662 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 1,400 jobs and add more than $117 million to Gross State Product by 2014.
In Utah, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $210 million to Gross State Product in 2014.
A recent study by the Partnership for a New American Economy also found that Hispanics account for $3.7 billion in Utah’s spending power. Hispanics also contributed $1.1 billion in combined federal, state, and local taxes. A total of $ 600 million of those taxes went to Social Security and $100 million was paid to the Medicare trust fund.
Immigrant residents are also contributing to Utah’s economy through entrepreneurship. In 2010, 8.5 percent of business owners in Utah were immigrants, despite making up just 8.4 percent of the total state population. Between 2006-2010, immigrant-owned businesses generated more than $380 million in income annually for the state as well. Such immigrants will be critical in helping Utah, much like the rest of the country, overcome the current economic slowdown by creating jobs. During the past 30 years, the single biggest driving force behind net job creation in America has been new business generation.
Immigrant entrepreneurs have long been a critical part Utah’s economy. One of the state’s largest employers, Smith’s Food and Drug Centers, is today a division of Kroger, a company founded originally by the child of German immigrants. Envirocare, a Utah-founded firm that is now a key part of the environmental services giant EnergySolutions, was founded originally by an immigrant from Iran. Together, the parent companies of these firms employ almost 345,000 people today and generate $92.1 billion in annual revenues.
In part because of the challenges students face remaining in the state after graduation, Utah is also currently short of the professional workers it needs in critical 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 almost 1.5 STEM jobs were posted online in Utah for every one unemployed STEM worker in the state. Fixing this problem is critical to Utah, which is home to a host of major technology companies, including Overstock.com.
Utah may also need to recruit immigrants to address a coming shortage of medical professionals. By the year 2030, the federal government estimates that the state will be short almost 10,416 registered nurses, leaving almost 36 percent of RN positions in the state vacant. Potential physician shortages have also long been a concern in Utah, in part because there is only one medical school in the entire state. According to the University of Utah School of Medicine, Utah has the fourth lowest number of physicians per capita of all 50 states. And according to the Utah Medical Education Council, Utah will need 332 additional doctors per year to adequately treat the state’s population, which is quickly aging—leaving patients who need greater care and doctors who are retiring and will need to be replaced.
Immigrants in Utah are also helping to create jobs in the state through seasonal and temporary work. According to the US Department of Labor, Utah’s employers were granted certifications to bring in more than 960 workers on H-2B visas in fiscal year 2011. These visas, often used to staff places like amusement parks, hotels, or landscaping services during the high season, protect American jobs to allowing companies to take on more work and continue operations. One study by the Partnership for a New American Economy and the American Enterprise Institute, in fact, found that for every 100 H-2B visa workers, 464 jobs are created or preserved for American born workers. In Utah that means the visas authorized in FY 2011 alone supported almost 4,500 American jobs.
However, the H-2B visa 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. With a more streamlined visa program, job creation in the state could be greater.
Overstock.com, which started in 1999 with a team of 18 people, has grown significantly and today boasts more than 1,400 employees and generates $1.1 billion in revenue per year. But, says Acting CEO Jonathan E. Johnson III, the company would never be where it is today without its high-skilled staff. “Our ability to access and hire these talented employees, no matter where they were born, is essential to our success as a business and our ability to continue to create jobs in America.”
Lately Johnson, like so many other business leaders, has been having trouble finding the software developers, web designers, and other employees that make his business a success. “There are more jobs out there for people with science, technology, engineering, and mathematics curricula than we have candidates for them,” he told Fox Business News in July 2012, “We need more of these math and science workers.” Having a more ready supply of such employees here in the United States would allow Overstock.com to continue to grow and add jobs—a potential boon to Salt Lake City, where the firm is based. Bringing on immigrant STEM workers, he told Fox, “helps us hire more merchants, more marketers, more finance, more warehouse and more call center people. So in my view, when we bring people on and give them visas that allow them to work here, we’re creating jobs. And just as importantly, we’re not creating competition in their homelands that are going to hurt our business.”
Johnson believes that in order to keep the US economy growing, we have to adapt our immigration laws. “It is irresponsible not to act – especially at the federal level,” he says. Johnson is advocating for a visa for entrepreneurs, but he also thinks we need to think about agriculture and other industries where immigrants are key to job creation as well. “Reforming our immigration system will not solve all of our economic troubles,” he says, “but the reforms offered by these efforts are practical, workable solutions that will help get America working again.”
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.