Coming to America

Neil Diamond sang about it. Eddie Murphy camped it up in the movie of the same name. But entertainment value aside, immigration is affecting business and the economy like never before. Workplace demographics are shifting, market opportunities are expanding and the effects of the labor shortage are shrinking, thanks to immigration. Companies that don’t understand its impact will be at a competitive disadvantage.

Although the United States is a nation founded and developed by immigrants, few business executives gave much thought to the effects of immigration until recently. But slow population growth, a crippling labor shortage and fierce market competition have made immigrants — and the economic advantages they offer — a force that American businesses can’t afford to ignore.

"Five years ago, immigration matters would have been delegated to a junior human resources person," explains Laura Foote Reiff, shareholder and head of the international business immigration practice at Greenberg Traurig LLP, a law firm based in Tyson’s Corner, Va. "Not anymore. CEOs and CFOs are becoming much more attuned to immigration issues," she says. Isabel Valdes, a Hispanic market research consultant based in Palo Alto, Calif., agrees. "Today’s environment is 180 degrees different from just 10 years ago," she says. "Today, CEOs are showing up at my presentations talking about the need to embrace diversity and understand our new breed of immigrants." Even union leaders, who have long viewed immigrants as competitors for American jobs, are warming to the idea. "They’re starting to believe that foreign workers represent potential members," explains Richard W. Judy, director of the Center for Workforce Development at the Hudson Institute in Indianapolis.

Why are businesspeople sitting up and taking notice of immigrants now? After all, immigrants have flowed into the United States ever since the Mayflower landed in 1620. The short answer is that continued immigration is good for business and the economy. "Those who care about economic efficiency will typically want to see more immigrants," writes George J. Borjas, Pforzheimer professor of public policy in the John F. Kennedy School of Government at Harvard University, Cambridge, Mass., in his book "Heaven’s Door: Immigration Policy and the American Economy" (Princeton University Press, 1999). "The greater the number of immigrants, the greater the gains to employers (through lower wages) and consumers (through lower prices)," he writes.

In addition to the broad "it’s good for the economy" argument, there are three distinct immigration-related issues that are demanding immediate attention from business: changing workplace demographics, the labor shortage (see Surplus Problems of the Labor Shortage in the August 2000 issue of Business Finance) and shifting market opportunities.