Ohio’s immigrant workforce lags U.S.

SOURCE: Fiscal Policy Institute

In the last 20 years in Ohio, the number of immigrant workers has more than doubled and the number of immigrant small business owners increased by more than 60 percent, according to a new report.

But an analysis by the Dayton Daily News found the pace of growth of these groups in Ohio was slower than in most states, and immigrants still account for only a fairly modest share of the state’s workforce and small-business owners.

Policy experts said Ohio’s economy could benefit from more foreign-born people moving here because they are much more likely than native-born residents to start businesses, and immigrant-owned establishments employ about one in seven people who work for small businesses.

“By having a diverse community, it makes the community more stable and it brings different kinds of jobs to the area,” said Catherine Crosby, executive director of the Human Relations Council with the city of Dayton.

Between 1990 and 2010, the number of immigrant members of the labor force in Ohio grew by about 109 percent to 276,300 from 132,000, according to census data analyzed by the Fiscal Policy Institute, a New York-based nonpartisan think tank.

During the same period, the number of immigrant small business owners in Ohio grew by 60 percent to 10,000 people, and they now account for about 7.3 percent of the state’s small-business ownership, up from about 5.7 percent.

Immigrants are a large and growing part of the U.S. economy, but in Ohio they play a more modest economic role, said David Kallick, senior fellow with the Immigration Research Initiative with the Fiscal Policy Institute and lead author of the analysis.

“The immigrant share of the labor force in the country is 16 percent, compared to 5 percent in Ohio,” Kallick said.

Ohio ranked 42nd in the country in the change in immigrants as a share of the workforce between 1990 and 2010, according to the institute. Immigrants accounted for about 4.7 percent of Ohio’s workforce in 2010, up from about 2.5 percent two decades earlier.

In addition, between 1990 and 2010, the number of immigrant small business owners in Ohio grew at the third slowest rate of the 39 states for which data was available.

Guided by economy

Immigration flows are guided by economic forces, and the parts of the country that have seen the largest increases in immigration also have seen some of the most robust economic growth, Kallick said. But Ohio’s economy grew at a tepid pace, making it unattractive to immigrants.

Between 1990 and 2011, Ohio’s private sector only added a net 176,900 jobs, and the private sector only grew by 4.3 percent, according to a report by the Buckeye Institute. Ohio’s private sector ranked 46th for performance among the 50 states and Washington, D.C.

“In a slow job growth state like Ohio, it is challenging to attract immigrants,” said Amy Hanauer, executive director with Policy Matters Ohio.

She said Ohio would benefit from more immigrants because they help fuel economic expansion and job growth. Immigrants were more than twice as likely to start a business each month of 2010 and 2011 than were native members of the population, according to the Kauffman Index of Entrepreneurial Activity.

Immigrants now account for about 30 percent of new entrepreneurs, and about 14 percent of people employed by small businesses work for establishments that are owned by immigrants.

But immigrant entrepreneurs face some significant barriers, such as they often lack access to capital to start or expand a company, said Pat Newcomb, director of the Ohio Small Business Development Center at the Entrepreneurs Center in Dayton.

Many immigrants find it difficult to obtain loans because they do not have adequate credit histories. Language can also be a formidable obstacle.

Juan Urbieta, 45, of Dayton, moved to Ohio in 1986 shortly after leaving his native country of Mexico. Ohio’s biggest immigrant populations come from Mexico and India.

Urbieta said it was initially hard to find work because of his limited ability to speak, read and write English. But he and his wife, Carmen, started their own business — Urbieta Construction — and she helped him interact with customers and develop business relationships by translating for him.

“My wife had to go to every estimate and every job to translate and talk to the customers for me,” he said.

Urbieta said he now provides free translation services to area contractors and plumbers with limited English skills. But he said the area could use more translators to help immigrant-run businesses.

Immigrant entrepreneurs need help accessing and identifying resources they can use to start and grow their companies, policy experts said. Officials and business leaders in Dayton said they recognize this need, and the city’s Welcome Dayton plan seeks to reduce barriers to business development. The plan recommends developing East Third Street as an international marketplace for immigrant entrepreneurship.

Immigration “is an economic driver,” said Crosby, with Dayton’s Human Relations Council. “You want to encourage new people to come into the community with new ideas.”

Robert Krzak, 33, a Polish immigrant, had a new idea that he made a reality when he opened the World Cafe, a sandwich shop at 768 Northwoods Blvd. in Vandalia.

The shop — which opened in May 2010 and offers multicultural cuisine — now has 17 employees, and Krzak said his goal is to open six or more locations in coming years.

Krzak said it was hard starting a new business, and he may seek business-development assistance when he expands. But he added Ohio is a great place for entrepreneurs with good ideas.

“I am at step 2 of building a restaurant chain,” he said. “Ohio has a great record of starting a chain, because this is the heart of it all, and if people like it here, most Americans will like it.”

Contact this reporter at (937) 225-0749 or cfrolik @DaytonDailyNews.com.