Immigrant-Owned Small Businesses Are a Critical Component of NJ’s Economy
According to an article in New Jersey Policy Perspective, small “Main Street” businesses like grocery stores, hair salons and restaurants are more likely to be owned by immigrants, rather than native-born residents. These businesses are responsible for almost $1 billion in annual economic activity. They are also critical to downtowns and local economies across the 565 unique municipalities that make up New Jersey. In fact, aside from California, no other state boasts as many Main Street businesses owned by immigrants.
Why are immigrants more likely to become business owners?
There are three reasons that tend to arise most often in response to this question. All have to do with discrimination in the job market. Sometimes this is based on limited English proficiency. Other times it has to do with their citizenship status. Some immigrants earn advanced degrees in their home country and find that their qualifications and academic achievements are not recognized in the United States. All of this makes it difficult for them to acquire full-time, professional positions in the workforce.
Instead, immigrants turn to their communities, where connections and networks are more easily established. This is where they find the support for starting their own business. They form strong immigrant entrepreneur networks. Many small businesses are owned by immigrants from one region of a foreign country and are supported with resources from other immigrant entrepreneurs from that same region.
Many immigrants find their first job through their community and proceed to climb the “stepladder.” The stepladder experience is how immigrants learn how business is done in the United States, obtain work experience and build social capital. They may begin selling their products informally via businesses that are not incorporated or legally recognized. However, once they gain experience, capital, and knowledge of the market and regulatory landscape, these businesses incorporate.
Why are immigrant owned small businesses a critical part of NJ’s economy?
The total revenue of immigrant-owned Main Street businesses in the state of New Jersey is approximately $950 million. That is out of a total of approximately $4.4 billion dollars earned by all the state’s immigrant-owned businesses. All of this injects money into local economies, employs thousands of New Jersey workers and reinvigorates neighborhoods that have experienced decades of disinvestment and population decline. Local tax bases are increased and consumer spending in local economies is stimulated. Proactive immigration policies allow immigrants to prosper and feel safe and secure in the Garden State.
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