Immigrants play an outsized role in Michigan’s small business economy, according to a new research from the Michigan League for Public Policy.
While only accounting for 7 percent of the state’s overall population, immigrants own 20 percent of the state’s “Main Street” small businesses –– defined as “small-scale, less capital-intensive, and more locally-oriented businesses,” according to a report released Thursday by the Lansing-based bipartisan public policy think tank.
The report found that immigrants make up 12 percent of all business owners in the state and that immigrant business owners generated $1.3 billion in overall earnings from 2012 to 2016.
Immigrants also are twice as likely to become entrepreneurs as those born in the U.S., according to the MLPP findings.
The report comes at a time of heightened debate over immigration policy at the federal, state and local levels. To researchers, however, the policy recommendations are clear.
“I think it’s clear that immigrants are a net positive for Michigan and really for all other states,” said Victoria Crouse, a state policy fellow at Michigan League for Public Policy who authored the report.
“Just focusing on immigrant Main Street business owners, these are entrepreneurs who are helping to revitalize places that have been in decline, they’re supplying jobs, they’re helping to put money back into the economy,” Crouse told MiBiz. “It’s clear that policymakers have to understand that immigrants are great contributors to our communities, to our economy and we need to have policies that are more welcoming to immigrants, rather than policies that sort of close the door to immigrants that are just trying to make a better life in the U.S.”
The report makes a handful of policy recommendations, citing that immigrant entrepreneurs need greater access to financing as well as business and management training. The authors also suggest leveraging federal funds in the form of Community Development Block Grants (CDBG) for those initiatives.
Greater access to official documentation like driver’s licences and state IDs are critical for immigrant business growth, as they’re needed for basic but mission-critical functions like opening bank accounts and applying for loans, Crouse added.
Taken together, the policy recommendations highlight the need for greater connectivity between business support organizations and the immigrant community, she said.
“There really is a lack of outreach to immigrants, and in some cases, it can be really difficult for them to know how American lending systems work,” Crouse said. “But we have that infrastructure in place. We have agencies that coordinate these programs.”
The MLPP report cites two Grand Rapids-area immigrant-owned small businesses as case studies: Mediterranean Island International Foods, a specialty grocery store near the intersection of 44th Street and Kalamazoo Avenue, and Chez Olga, a Caribbean restaurant in the city’s Eastown neighborhood founded by Olga Benoit, a Hattian immigrant.
Benoit said in the report that she “feels that the city has not stepped up to form relationships with her and many immigrant Main Street businesses in the area,” and “that there is still a need for guidance and financial support for aspiring immigrant business owners.”
The report notes that the majority of the state’s Main Street immigrant business owners — 32 percent — own restaurant or foodservice businesses, followed by construction businesses at 27 percent and physician offices at 18 percent.
Additionally, 16 percent of Michigan’s immigrant business owners hail from Iraq, 12 percent are from India and six percent each come from Lebanon and Korea, according to the report.
In particular, Michigan policymakers need to recognize not just the economic impact of immigrant-owned businesses, but also continue to build on the state’s legacy as a welcoming place, according to Crouse.
“Michigan has been known as a place where immigrants from around the world arrive and sort of make a home for themselves here,” Crouse said. “It’s definitely a part of our state history and I think that in an era of migration, our policies really have to reflect that in order for Michigan to come out stronger than it was before.”
MiBiz small business news coverage is supported by the Small Business Association of Michigan, the statewide and state-based association that focuses solely on serving the needs of Michigan’s small business community. Visit sbam.org for information.