Immigrant Entrepreneurship Drives Business Creation, Creates Opportunities

[Immigrants] are more than twice as likely to start businesses as their native-born counterparts. They are responsible for over a quarter of all new business formation–and new businesses have been the only source of net job creation in this country for the past 30 years. –Time Magazine

Since moving people out of poverty through employment depends upon access to quality jobs, CJC pays close attention to policymaker perspectives on the dynamics of job creation. We have been troubled by the limited information that has accompanied pronouncements in the media about immigrants and jobs, so we decided to dig a little deeper. Here’s what we found.

Immigrants create jobs and contribute positively to our economy.

On the campaign trail and in the Oval Office, President Trump has predicated his proposals for immigration reform upon the premise that immigrants spelled doom for the US economy. During a campaign event in Phoenix in 2015, he said of Mexican immigrants, “They’re taking our jobs. They’re taking our manufacturing jobs. They’re taking our money. They’re killing us.” While this fear is not unique to President Trump, several recent reports suggest that the opposite is true. Rather than stealing jobs from native-born Americans, immigrants have created more than their share of new jobs and businesses in the United States.

Business creation is a significant driver of economic growth, and immigrants’ entrepreneurial drive has incontrovertibly outstripped that of the United States’ native-born population. As reported by the Partnership for a New American Economy, “Over the last 15 years, immigrants have increased the rate by which they start businesses by more than 50 percent, while the native-born have seen their business generation rate decline by 10 percent.” Furthermore, immigrants are responsible for creating businesses of all sizes—from small local enterprises to Fortune 500 giants. Another report finds that “more than 40 percent of Fortune 500 companies were founded by immigrants or their children.”

What about refugees?

In more recent news, President Trump’s highly contested travel ban has raised questions about the effects of welcoming refugees into the United States. While there are initial costs associated with re-settling refugees, the Washington Post highlights that, similarly to other immigrants, “in the longer run, refugees appear to play an outsized role in creating new jobs and even raising the wages of natives.”  In other words, supporting refugee resettlement is a short-term loss but a disproportionately large long-term gain. In fact, refugees open small businesses at even higher rates than other groups of immigrants—because “compared with other kinds of immigrants, refugees are less likely to have a job waiting for them in their host country. Other migrants may move countries to take a specific job offer with a company, or to join their family, who may offer them a job.”

In short, immigrants and refugees have bolstered the US economy—not hindered it—and their entrepreneurship continues to benefit the lives of other immigrants and native-born Americans alike. Closing our doors to immigrants and refugees would mean fewer new businesses, less economic growth, and ultimately fewer job opportunities for everyone who calls the United States “home.”

Interested in learning more?

Check out some of the reports and articles listed below for more detailed information.

Local:

Know Your Rights: ICIRR Graphic

Immigration Raid Has Chicago Businesses, Residents on Edge

On Devon Avenue in Chicago, news of immigration raids intensifies fears

Some Syrian Refugees Arrive in Chicago at Last

National:

Undocumented Immigrants’ State & Local Tax Contributions

40 Percent of Fortune 500 Companies Founded by Immigrants or Their Children

Open For Business: How Immigrants Are Driving Small Business Creation In The United States

The big myth about refugees: Refugees can be an investment, rather than a burden

Open the Door and Let ‘Em In

Federal Policy Change Could Negatively Impact SNAP

Earlier in January, the Chicago Tribune ran an article about big potential changes coming to the Supplemental Nutrition Assistance Program (SNAP), and how they could drastically change the face of food access in Illinois.

While nothing has been confirmed, Rep. Paul Ryan (R-Wisconsin), Speaker of the U.S. House of Representatives, has proposed the possibility of block-granting SNAP, which would mean sending fixed sums to each state annually. Block-granting would fundamentally alter the structure of the SNAP program, and render ineffective one of the USA’s most robust anti-poverty programs. Currently, SNAP funding is flexible and responds to demand. It comes from the federal government, which can rely on deficit spending to cover the increased costs of more nutrition assistance in an economic downturn. States cannot spend this way because they must balance their budgets. In other words, when the money runs out in a block-granted SNAP program, people lose access to benefits.

In addition, block-granting SNAP would set up the program to diminish in scope. Even if Congress does not make any cuts outright, the grants will decrease in value over time with inflation. To maintain their value, Congress would have to either tie the amount of the grants to inflation or raise the sums on a regular basis—neither of which are likely to happen, given Congress’ recent track record of limiting federal spending.

Ultimately, any losses to SNAP funding would adversely affect millions of people in the United States. In Illinois alone, nearly two million people rely on this program for basic nutritional assistance. To block-grant SNAP would be to deny these people reliable access to nutritious food.

Interested in learning more?

Check out our latest episode of “Getting to Work,” CJC’s podcast. The podcast demystifies some of the policy jargon surrounding SNAP and analyzes the potential policy changes from a workforce development perspective.

For a more detailed overview of the SNAP program, check out this article from the Center on Budget and Policy Priorities (CBPP).

Report from Center for American Progress: A Progressive Agenda for Inclusive and Diverse Entrepreneurship

Earlier this month, the Center for American Progress (CAP) released a new report: A Progressive Agenda for Inclusive and Diverse Entrepreneurship. Although entrepreneurship is a promising avenue for job creation and increasing income, structural and economic barriers have prevented women and people of color from having equitable access to necessary resources for starting businesses. In this report, CAP first examines these barriers and then proposes progressive policy changes to help level the playing field.CAPreport

Individuals can only generate revenue for themselves and their communities through entrepreneurship if they are given equal access to the capital and education necessary to succeed. Per the report, “Making entrepreneurialism a career choice open to all will help families build wealth; create opportunities for jobs and mobility in disadvantaged communities; and support a robust, inclusive, and growing economy.”

Here are CAP’s main proposed policies for increasing access to entrepreneurship:

  1. Address the wealth gap and expanding access to capital through an enhanced State Small Business Credit Initiative
  2. Develop Entrepreneurial Apprenticeship
  3. Foster early training and education to help young people foster an entrepreneurial spirit
  4. Utilize the resources of ‘one stop shops’ and Self-Employment Assistance Programs to help people start businesses
  5. Develop broad progressive economic policies to expand opportunities for entrepreneurship

To read the full report with detailed policy recommendations, click here.

ACS Poverty Data Shows Increase in Household Income, Decrease in Poverty

ACSEarlier this month, the US Census Bureau released the collected data from their American Community Survey (ACS). The ACS results present yearly data on poverty & wage earnings in the United States, as well as localized information for cities and metro areas.

This year, the ACS data reports that for 2015, across the board, household incomes increased and poverty decreased—the most promising report since the Great Recession of 2008. Unfortunately, the poverty level has yet to drop to pre-recession levels, and 1.7 million Illinoisans still live in poverty.

Although household incomes are up, wages have remained relatively steady—thus, the increase in household incomes should be attributed to an increase in hours worked, not an increase in wages paid. Theoretically, this increase is still a positive outcome: if individuals are working more hours on average, then they are making more money. That being said, many people still struggle to make ends meet with a fifty- or sixty-hour work week. In future years, wage gains will need to increase in order to precipitate further increases in household income.

While this year’s report was generally positive, further analysis of the data reminds that a lot of work remains to be done. For instance, while progress has happened for every racial group, progress is not happening at the same rate—when comparing household incomes by the race of the head of the household, on average, black households earn approximately $25,000 fewer annually than white households. Additionally, on average, women are still only making 80% of their male counterparts—which is not a significant increase from recent years. Furthermore, the vast majority of recent economic gains have been centralized in urban and metropolitan areas, leaving rural areas behind.

The Illinois- and Chicago-specific data maps fairly well onto the US data—with a few important caveats. While there were “gains at the bottom of the income scale, Illinois was one of eight states where there was an increase in income inequality, or the gap between rich and poor.” There are still millions of Illinoisans affected by poverty and inadequate wages, thousands of whom live in Chicago.

Given the persistence of poverty in Illinois and Chicago—even in the midst of economic growth and recovery—we must protect proven anti-poverty efforts, invest in services to the most vulnerable, and keep the pressure on our elected officials to end poverty.  To that end, you can join CJC by:

  • Protecting SNAP benefits for unemployed adults—Use this form or call the Governor’s Office at (217)-782-0244 to ask the Governor to continue providing SNAP benefits for Illinois’ most vulnerable residents. Read more about SNAP funding here or join us at CJC’s next Workforce Development Working Group for more information.
  • Joining the #OneInAMillionIL campaign and keep the pressure on the Illinois General Assembly and Governor Rauner to complete their jobs and pass a responsible budget. Click here for more information.
  • Asking candidates what they are going to do about poverty if they are elected and read this piece from John Bouman of the Shriver Center.
  • Joining us and other advocates from across the country at Heartland Alliance’s A Nation That Works Conference here in Chicago.

For reports about poverty in Chicago in past years, read more from the Social Impact Research Center.

For a helpful breakdown of the ACS data from the Wall Street Journal, click here.

For an article on Chicago-specific data from the Tribune, click here.

SNAP Time-Limit Waiver Renewal in Question, Could Impact 200,000 Residents

This December, Illinois’ SNAP time limit waiver will expire, and if the governor’s office does not apply for renewal, 200,000 Illinois residents could lose their SNAP benefits, and the state could lose $330 million in federal funding.

What’s the SNAP time limit? And what’s this waiver?

SNAP, or the Supplemental Nutrition Assistance Program, is a federal program that helps very low-income individuals and families to buy the food they need. The amount of assistance received depends on the number of people in the household and their gross monthly income. For example, single adults are only eligible if they have less than $1,620 in monthly income, and the most a single adult could receive is $194 per month.

Figure 1.1

Figure 1.1

Current federal policy requires most SNAP recipients to be working at least part time or caring for a child. For 18-49 year olds on SNAP not working or caring for children, SNAP benefits are restricted to no more than three months in a three year period. Nationally, this time limit has significantly decreased the number of individuals receiving SNAP benefits (Fig 1.1). Since the limit became law twenty years ago, however, states struggling with high unemployment have been able to apply for a time-limit waiver, which allows able bodied adults without dependents (ABAWDs) to receive SNAP benefits as needed, despite the work requirement. Illinois currently has a time limit waiver due to high unemployment, but it is set to expire in December. The governor’s office is currently deliberating whether or not to renew this waiver, and thousands of residents’ benefits hang in the balance.

Why does this matter?

In a recent presentation, the Sargent Shriver National Center on Poverty Law reported that if the waiver is not renewed, up to 200,000 ABAWDs would lose their SNAP benefits. Although ABAWDs appear to be a less vulnerable population than individuals with dependents, in reality, this designation fails to account for many other barriers to financial stability.

Furthermore, the single adults who qualify for SNAP benefits are some of our nation’s poorest individuals, with total monthly income less than $1,619. Additionally, the average monthly benefit for a single adult is only $143, which amounts to less than $5 per day for food. One Citylab article states,

 “Failing to adequately understand and address the needs of … ‘our most vulnerable population’ shows a blindness on the part of state governments. ‘Just because you decide to cut people off or disenroll them in basic-needs benefits, they don’t leave our communities….They stay, and they deteriorate.’”

In addition to affecting thousands of individuals, losing this waiver would have huge consequences for the state budget. Every cent of SNAP funding comes from the federal government. By failing to renew the waiver, Illinois would lose $330 million annually in federal funding at a time when our state budget is already in crisis. Then, with those 200,000 individuals forced deeper into poverty, our already dissolving state social service infrastructure would be left to fill the gaps through increased Medicaid and other spending.

In short, failing to reapply for this waiver would eliminate food security for thousands of people and further destabilize the state’s financial situation. Want to voice your opinion? Use this form or call the Governor’s Office at (217)-782-0244 to ask the Governor to renew the time-limit waiver and continue providing SNAP benefits for Illinois’ most vulnerable residents.

Chicago Urban League Releases Blueprint for an Equitable Chicago

Earlier this month, the Chicago Urban League released a ten-year plan for their work towards racial equity in Chicago. The blueprint outlines an ambitious strategic plan that stands on three pillars—education, employment, and economic development. Ultimately, the Urban League’s goal is to deconstruct “structural racism and create more equitable educational, employment and economic systems for African Americans.”

While each pillar of the Urban League’s blueprint has a distinct set of priorities, these various aims share a prerequisite for progress: securing “resources and support” from various funding streams and partner organizations. Furthermore, the plan calls for widespread collaboration and cooperation between nonprofit organizations, schools, businesses, and government officials, all working together to address institutional racism in Chicago.

Although the plan centers on advocacy and resource development, the Urban League’s blueprint reaches beyond mere policy work. It is a moral challenge from a 100-year-old Chicago institution that is “Tired of hearing the same narratives about African Americans and the communities in which they live.” Hopefully, this plan can sharpen our focus on structural racism, and stimulate positive change in education, employment prospects, and economic security for African Americans living in Chicago.

Click here to view the full blueprint as well as a projected calendar for Urban League efforts over the next ten years.

What do you think of the Chicago Urban League’s new plan?

“Homes and Jobs: Better Together” A Snapshot of the Destination: Jobs Survey

In Chicago, less than 20% of individuals who exit the homeless service system experience increased income from employment. There is a great need to ensure that unstably housed clients have access to the resources that will help them take advantage of job opportunities that contribute to increased housing (and economic) security.

Dest Jobs Chart 1Destination: Jobs is part of The Connections Project spearheaded by the National Initiatives division of Heartland Alliance to address the employment needs of homeless job seekers by better aligning workforce development and homeless service providers. One key way it aims to do that is by focusing on employment earlier in the homeless services delivery process to give clients the help they need in getting a job that will support their housing costs.

Recently, the Plan 2.0 Employment Task Force sent out a survey to workforce service providers that assessed their ability to serve homeless clients. The survey received 28 unique responses, with some respondents being a part of the same organization. Responses revealed the difficulties of serving homeless job seekers and highlighted existing opportunities that can be seized to better support this population:

60% of agencies reported that up to 25% of their clients receiving employment services are experiencing homelessness or facing housing instability. 16% of agencies reported that over 50% of their clients receiving employment services are experiencing homelessness/housing instability.

The most commonly-cited strength of organizations providing employment services to unstably housed clients was that they offer a variety of supportive services that help individuals overcome barriers to success. Such services include transportation, clothing, and financial literacy training.

There were three sets of barriers organizations often encountered in providing services to individuals without stable housing. The first set, cited by over 50% of respondents included the inability to have reliable communication with clients, a lack of supportive services, and a criminal background. The second set, cited by over 30% of respondents included a lack of documentation for eligibility determination, substance abuse, and inadequate mental health services. The third set, cited by over 20% of respondents included low literacy, a lack of dedicated resources for homeless job seekers, and a lack of skills and job readiness.Dest Jobs Chart 2

The Destination: Jobs survey offered a lay of the land of the local workforce development field and how it serves homeless clients. However, the survey’s findings raised further questions about the specific services offered by providers for homeless clients and how homeless clients fare in their eventual employment outcomes compared to other clients. They also raised questions about the kinds of relationships that exist between the workforce and homeless service systems and how those relationships can be harnessed to improve the outcomes of unstably housed clients. Following up with responding agencies may help reveal the unique employment barriers homeless individuals face and the tailored solutions necessary to help them overcome those barriers. Follow-up interviews with a select group of survey respondents will try and answer these deeper questions.

New CJC Report: The Hidden Cost of Ventra

Ventra Report CoverTogether, social service providers in Chicago spend over $1,000,000 on Ventra cards and tickets every month to offer transit assistance to their program participants. But Ventra is costly and burdensome to providers. That’s why CJC has spent more than two years working with our members to make sure that the Ventra system meets their needs.

We first sat down with CTA in 2013 to discuss Ventra. In 2014, we released a report with modest recommendations for change. But after several meetings and over 2 years of waiting for improvements, we found that service providers continue to face the same challenges they did in 2013.

Click here to read and share the new report:

The Hidden Cost of Ventra:

The Impact of the Ventra Fare System on Chicago Social Service Providers

This report includes findings from our most recent survey and recommendations from community organizations for improving Ventra.

Highlights include:

  • Bulk orders, which typically exist for efficiency, are inefficient and inconvenient. Ventra uses outdated paper order forms and checks, rather than online stores with credit card payment options.
  • 63% of respondents report long wait times to receive bulk orders of tickets or cards—some as long as 2 months.
  • Without better bulk order options, providers resort to spending hours at Ventra vending machines, buying hundreds of tickets in increments of 8–which is the maximum number of tickets sold per transaction.
  • Cubic (the private contractor that operates Ventra) is collecting a 50 cent fee on paper tickets—earning over $280,000 yearly from providers. That could buy 112,000 more rides if the fee were waived.

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Please visit wire.cjc.net/VentraReport to read the report and share our recommendations on Twitter and Facebook.

Meeting the Challenge of Youth Unemployment

There have been numerous articles written recently regarding the state of youth and young adult unemployment in Chicago and the impact that it has on local communities, specifically on the south and west sides of the city.

Black males in Chicago are out of work and school at far higher rates than their Hispanic and white peers. (Source: Chicago Tribune)

Chicago is one of the worst urban areas in the country for teen and young adult employment and it continues to experience the devastating effects of violence in low-income communities. The city has failed to adequately partner with local community leaders to promote policies and implement programs that bolster employment opportunities in its low-income and most hard to serve communities.

  • A recent report issued by the Great Cities Institute found that nearly half of black men in Chicago between the ages of 20-24 were neither working nor in school.
  • Teen and young adult unemployment is highly concentrated in low-income and minority neighborhoods on the south and west sides of Chicago.
  • The employment rate for low-income black teens in Chicago is only 9%, far lower than that of their white peers.

Ample evidence demonstrates that increasing employment among teens and young adults in low-income communities decreases acts of violence, yet Illinois is failing to prioritize funding to make such initiatives a centerpiece of their violence prevention approach.  

Chicago has a higher proportion of 20-24 year olds out of work and school than the US average and more than other large US cities. (Source: Chicago Tribune)

During the recession President Obama provided funding for job subsidies for the unemployed, the program showed positive benefits for all age groups, yet it was discontinued after only a year. Mayor Rahm Emanuel’s One Summer program provides teens and young adults ages 16-24 (with limited opportunities for 14 and 15 year olds) work opportunities for 20-25 hours a week during the summer.

Proposals have been made to provide funding for job or subsidy programs for the unemployed, but they continually fail to be implemented at the necessary scale at the national, state, and city levels. Steps must be taken to improve the ability of these programs to serve the most in-need Chicagoans and to better meet the needs of local communities.

At a recent hearing hosted by the Cook County Commissioner’s Office “Nothing Stops A Bullet Like A Job” one youth spoke out—he suggested the title holds true in many circumstances for the youth of Chicago. However, he also stated the opportunities and benefits that come with employment are not the only issue—continued divestment in low-income communities and the lack of a state budget create more barriers for youth to find employment.

Community leaders who are working in areas of concentrated unemployment and high levels of violence have called for policies to improve summer job programs. Working with community leaders to improve income eligibility requirements, create in-person applications in addition to online recruitment, and partner with organizations based in targeted communities will help to serve those most at-risk of joblessness, instead of serving those already most likely to succeed. These steps will ensure that employment opportunities reach the most disconnected youth and that they receive the services that they need to thrive.