A project of the Partnership for a New American Economy
Between 2000 and 2013 the foreign-born population in Washington increased by almost 30 percent. About 890,000 people, or 13.1 percent of the state’s population, were born abroad, according to the American Community Survey. This has helped add considerably to the state’s diversity. Today, nearly one in six Washington residents are Latino or Asian. These two groups have become important consumer blocs, contributing millions of dollars to the state’s economy every year.
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, 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 Washington, fixing the US immigration system to make it easier for students trained in America to remain in the country after graduation will be critical. A study by the Partnership for a New American Economy and the American Enterprise Institute found that for every 100 foreign-born graduates of a US Master’s or PhD program who stay in the United States working in a STEM field, 262 jobs are created for Americans. That translates into a huge employment boost for Washington, a state where, in 2010, more than one in five STEM workers with an advanced degree were foreigners. In 2013, around 27 percent of the students earning Master’s of PhDs in STEM from the state’s research-intensive universities were foreign-born. And almost half of the students earning engineering PhDs in the state in recent years were also non-citizens. By 2020, Washington will need to fill 242,700 new STEM jobs and immigrants will play a key role in occupying these positions and continuing to promote economic growth.
Share of Engineering PhDs who were temporary residents (2006-2010)
Microsoft, one of Washington State’s largest employers, faces a challenge that is becoming increasingly common for companies across the country: a shortage of qualified STEM workers, particularly those with degrees in computer science and skills in the latest technologies. In testimony before the Senate Judiciary Committee in April 2013, Brad Smith, Microsoft’s General Counsel and Executive Vice President for Legal and Corporate Affairs, noted that the company had 3,300 unfilled research & development jobs, a 29 percent increase over the prior year. Combined with IBM, Intel, Oracle and Qualcomm, these five companies alone have over 10,000 high tech job openings in the US. Smith explained, “The reason we have such a shortage in high skilled labor is because we have systematically underinvested, as a country, in the education of our own children.” Smith’s written testimony pointed out one striking example of this underinvestment: of the 42,000 high schools in the country, only 2,250 are certified to teach the Advanced Placement course in computer science.
Jack Chen, a senior immigration policy attorney at Microsoft, says immigration challenges make it difficult for the company to bridge this skills gap with high skilled international talent. He points to the fact that the supply of high-skilled H-1B visas this year was exceeded in the first week of availability, subjecting more than 124,000 applications to a random lottery for only 85,000 available visas. Chen explains, “We’ve recruited and extended offers to some outstanding candidates who won’t be able to start working for us because of the H-1B lottery. When this happens, we lose the productivity our business groups were counting on, and our country loses the investments, tax revenues and economic activity that would have been associated with those employees.” Chen says the extreme backlog in the employment-based green card process is also a critical issue for current employees as well as a potential deterrent for top global talent. “it is tough to play the game without a full roster,” Chen adds.
By making it more difficult for a company like Microsoft to grow, such limits on the access to essential high skilled talent can have a major impact on the US economy—as well as the economy of Washington State. With an annual budget of $9.8 billion devoted to research & development, Microsoft spends more on R&D than any company in the world—and 85 percent of those funds are spent within the US The inability to fill high skilled jobs in the US threatens the company’s ability to continue creating these types of jobs in the US It also results in the loss of the jobs that would have been created as a direct result of those jobs—the so-called “multiplier effect.” According to the recent studies, for every high tech job filled in the US, an additional 4.3 jobs are created. For Microsoft’s current unfilled openings alone, that represents nearly 18,000 jobs going unrealized.
Chen points back to the need to invest in STEM education in the US, particularly in computer science, as a crucial component to solving the skills gap. “We have always been a major job creator in the US, and we want to continue to drive job creation in this country,” Chen says of the situation. “But we need to be able to fill these jobs today in order to create more jobs for tomorrow.”
Immigration Reform = Economic Growth in Washington
Reforming our immigration system will generate millions of dollars and thousands of jobs across Washington. In the Seattle-Everett metropolitan area, 2007 and 2008 H-1B visa denials cost U.S.-born tech workers as many as 1,932 additional jobs and as much as $32,147,000 in missed wages by 2010. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 12,700 jobs and more than $1.1 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 Washington between 2010 and 2013 will translate into 21,283 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 5,700 jobs and add more than $555 million to Gross State Product by 2014.
In Washington, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $788 million to Gross State Product in 2014.
While changes in visa laws are necessary to continue Washington’s growth, the state should also celebrate and continue to grow its Hispanic population, which contributes significantly to spending power and tax revenue. A recent study by the Partnership for a New American Economy found that Hispanics account for $8.8 billion in Washington’s spending power. Hispanics also contributed $3 billion in combined federal, state, and local taxes. A total of $1.5 billion of those taxes went to Social Security and $343 million was paid to the Medicare trust fund.
Immigrants are helping to grow housing wealth in some key Washington counties as well. Between 2000 and 2010, more than 104,000 immigrants arrived in King County, the area that includes the cities of Seattle and Bellevue. By moving into these neighborhoods, immigrants played a role in adding to the housing wealth of the neighborhood’s residents. That influx of immigrants added $12,078 to the value of the average home in the county, or more than $9.5 billion to housing wealth there overall.
Immigrants have been integral in helping Washington grow economically in recent years, especially as the state has struggled, along with the rest of the country, to drive new business and create jobs. In Washington, like so many places around the country, immigrants make outsized contributions as entrepreneurs: in 2010, 15 percent of business owners in Washington State were immigrants, despite making up just over 13 percent of the state’s total population. From 2006 to 2010, immigrant-owned businesses also generated more than $2.4 billion in income for the state each year.
Annual business income generated by immigrant owned businesses
Current immigration policy has been harmful in recent years to Washington’s economy. Washington’s agriculture industry, which generates $6.4 billion each year in revenue, has experienced a major farm worker shortage in the last two years. Our inefficient visa system denies Washington the agricultural labor necessary to keep up with growing demand for produce, forcing a shift to imported fruits and vegetables. Between 1998 and 2012, the share of asparagus consumed in the US that was produced in Washington decreased from about 28 percent to a mere 5 percent. In 2012, 10 percent of the state's asparagus crop was lost due to insufficient labor for its collection. Fixing our immigration system to offer the necessary workers could have increased strawberry production by $43 million since 1998, creating $57 million in non-farm economic growth. Farmers in the state say that the nation’s increasingly rigid immigration laws have encouraged migrant workers to leave the state altogether, fearing prosecution or harassment. Washington’s agriculture industry requires about 150,000 seasonal workers each year, more than any other state besides California, Florida, and Texas. Without foreign agricultural workers, many crops, particularly labor-intensive crops like asparagus, are adversely affected. Just last season, growers were forced to leave 10 percent of the state’s asparagus crop in the fields because they lacked the workers they needed for the harvest. Farmer’s lost a combined $200,000 a day, according to the state’s asparagus farmers’ association.
In part because of the challenges students face remaining in the state after graduation, Washington is short some of the professional workers it needs in critical science, technology, engineering, and math--or 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 more than two STEM jobs were posted online in Washington for every unemployed STEM worker in the state. Fixing this shortage of STEM workers is critical to Washington, which is home to a host of major technology companies, including Microsoft and Amazon.com.
Washington 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 more than 20,609 registered nurses, leaving more than 42 percent of RN positions vacant due to a lack of qualified workers. Potential physician shortages have also long been a concern in Washington, due to the low number of medical residency programs in the Northwest region. Some policy papers have estimated the state could be short as many as 3,000 to 4,000 physicians within the next 10 to 15 years.
Share of physicians who graduated from foreign medical schools (2012)
Share of nursing positions vacant by 2030
Washington would also benefit if Congress passed the federal DREAM Act, a bill that would legalize the 2.1 million illegal immigrants who came to the country as children. By incentivizing these young people to earn a higher education and 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. In Washington, legalizing the 40,000 so-called DREAMers in the state would have an estimated $5.7 billion total economic impact and also create more than 23,000 new jobs by 2030.
DREAMers in the state
Economic impact of passing the DREAM act
Number of jobs created by DREAM act by 2030
Moreover, from 2000 to 2010, a period when tourists from Brazil, China, and India boosted international travel spending globally, Washington saw its share in the international tourism market decline due to the U.S.'s inefficient visa system. This drop amounted to roughly 20,000 lost visitors, as well as $80 million in spending and more than 600 jobs.
Ning Cao grew up in China and studied diligently through grade school and college so that she could come to the United States and pursue her graduate degree at Purdue University in 2004. Working towards a PhD in medical physics, Cao began to research the development of new medical devices that can help in cancer treatment. As part of a team led by Babak Ziaie, a professor of electrical and computer engineering and biomedical engineering at Purdue, Cao helped create a tiny device that can be implanted in cancer tumors and boost the efficaciousness of radiation and chemotherapy by increasing oxygen levels inside the tumor. The device could be essential to treating certain tumors, like those associated with pancreatic or cervical cancer. Though the device is still in early testing phases, the team has already been granted a patent for the invention and a company was formed based on the new technology.
Cao is now in her first year post-graduation working as a resident in oncology at the University of Washington Medical Center. Medical physics is not a well-developed field in her native China, and she has the best chance of doing groundbreaking research like she did at Purdue here in America. However, as with so many other STEM graduates, her future here is uncertain, despite her accomplishments. She hopes to stay here and find a hospital job and a green card, but she says she worries about how long the application process will take and how prospective employers will view her visa status.
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.