“Immigrants, Legal and Illegal, start businesses and Create Jobs”

When I posted that
statement on various
group pages a cabal of immigration
critics/fanatics rose to challenge
my statement. Of course,
like most immigration reform
critics, these challengers based
their arguments on fantasies that
exist only in their minds.
Who is right, the critical fanatics
or this humble correspondent?
Colleen DeBaise of Dow
Jones/Wall Street Journal wrote
an article about illegally present
business people and their quandary
of paying or not paying
taxes on their own businesses.
The first question is, are any
of the immigrants who start
businesses here illegally?
She wrote: “There’s no official
data on the number of illegalalien
entrepreneurs, but the general
population of unauthorized
migrants continues to swell.”
She wrote: “A 2006 study
by the Ewing Marion Kauffman
Foundation, a Kansas
City, Mo., nonprofit that supports
entrepreneurship, found
that immigrants in general start
businesses at a higher rate than
native-born Americans. About
350 out of 100,000 immigrants
started a business per month
in 2005, compared with about
280 out of 100,000 native-born
Americans, the Kauffman study
found. The study didn’t distinguish
between legal and illegal
2012 Kaufman Foundation
numbers reflect the long-winded
Recession but immigrants
composed 24% of the American
population yet accounted
for .49% of new businesses
while native born comprised
76% of the population but
formed less than half new businesses
Another blow to immigration
critic fantasies, high school
drop-outs had the highest percentage
of new business formations
(.52%). Why? Because,
the critics complain, most immigrants
from Mexico/Central
America (illegal) don’t have
high school.
More specifically, Hispanics
(19% of the USA) lead the
pack in business formation
with .46%; Asians (5% of the
USA) .31%, Whites (66% of
the USA) start .33% and Blacks
(10% of the US) formed .27%
of new businesses.
Second question: If they are
illegal, how do they pay taxes
when they don’t have legitimate
Social Security numbers?
Taxpayer Identification
Numbers (TIN) are issued by
the Internal Revenue Service to
anyone who requests one in order
to file taxes. Noncitizens pay
taxes at a higher rate and qualify
for fewer tax breaks than U.S.
citizens. They pay more that
John Q. Public because they are
foreigners. So much for illegals
not paying taxes.
Do immigrants start businesses
and create jobs? Yes. Are
some of them here illegally? Yes.
Do they pay taxes? Yes. Do illegal
immigrants start businesses?
Yes. Do they pay taxes? Yes.
For those that still doubt, the
U.S. Census does not differentiate
between legal and illegal
immigrants in their counts, in
their studies or in their reports.
Neither does any other agency
of government.
Thus, we cannot say XNumber
of illegally present
people are here, work here, or
start and run their own businesses.
But we can deduce that
they do from the number of
people who use TIN numbers
to file federal tax forms; we can
make some educated guesses
from those TIN number filings
by dividing that number by the
total number of foreign born in
the country.
We then take the resultant
percentage and apply it to the
over-all foreign born population
and we know that a lot of
immigrants, legal and illegal,
start businesses and create jobs
if only their own. The result of
such calculations is that about
35-45 illegally present people of
every 100,000 start businesses
every month.
We know that immigrants,
legal and illegal start businesses
and pay taxes. We know that
critics who say they don’t are
living in an alternative universe.
In this summer of debate on
immigration reform there are
concrete declarations in favor
of immigrants we can make that
overshadow what critics of reform
constantly bring up.
Immigrants come to work
for themselves or others. Immigrants
find more work than
native-born. They do not come
for welfare for they are not eligible
for welfare as per a 1996
law. Immigrants tend to work in
fields Americans won’t work no
matter the wage.
Illegally present people cannot
collect benefits available
even to legal immigrants.
In the congressional proposals
being considered those to be
legalized will not be able to get
Obamacare medical coverage,
collect any federal benefits and
do nothing but pay into Medicare
and Social Security but not
be able to collect them for over
a decade.
Immigrants have a higher
work force participation than
native-born, form businesses
faster than native-born, pay
into Medicare and Social Security
and under current proposals
can’t collect those benefits for
years despite age.
We also know from studies
of the 1986 post-amnesty experience
that we can expect a 25%
jump in the newly legalized immigrant
productivity. More tax
Assuming Congress knows
these things and assuming that
the 11-million or so people here
illegally fit within the statistics
of immigrants discussed here,
Congress will pass an immigration
reform bill and the country
will benefit financially and economically
beyond imagination.
Contreras’ books are available at