Immigrants can energize Detroit

(Originally published July 28, 2011)

Whatever you think of Detroit, it is hard to imagine Michigan thriving if our largest city isn’t on some kind of road to prosperity.

And plenty of folks, both business-oriented (think DTE Energy, Business Leaders for Michigan) and philanthropic (think the Kresge, Skillman and Hudson-Webber Foundations) are committed to and heavily invested in the city’s success.

Then there is Steve Tobocman, a former state representative whose district included Southwest Detroit, who has been particularly imaginative and energetic in dreaming up good ideas based on immigration and land bank policies. Nor is he alone.

At last week’s New Michigan Media Conference on Immigration and Michigan’s Economic Future, Gov. Rick Snyder urged the state to embrace immigrants as job producers. Let’s welcome “the best and the brightest from around the world.” he said, calling tough-on-immigrant legislation passed by other states unconstructive and divisive. Snyder recited statistics that showed more than half of all newly formed high-tech companies in Silicon Valley were started by immigrants. He also pointed to Michigan companies started by immigrants: Dow Chemical, Meijer and Masco.

The track record of immigrants in powering Michigan’s economy is plain. According to Tobocman, Michigan ranks third in the country in the percentage of high-tech firms started by immigrants: 32.8 percent.

In fact, nearly one-sixth of all businesses started in Michigan between 1996 and 2007 were launched by immigrants; in all, these 2,276 businesses generated $1.5 billion in revenue in 2000 alone.

Additionally, Tobocman says the numbers show immigrants are nearly three times as likely to start a business as are native-born Americans.

Want more evidence of how beneficial immigrants can be? A perfect example of their power to make a large difference to an economy is Vancouver, British Columbia, which experienced one of the largest movements of liquid capital in recent years.

Flash back to 1997, when China’s avowedly communist government took control of Hong Kong from the British. The Hong Kong business community, predominately Chinese, was terrified. Vancouver recognized a terrific opportunity. Vancouver offered to give all families immigrating from Hong Kong with at least $1 million in assets a work permit -- and a clear path to citizenship.

Vancouver is today one of the most prosperous cities on the North American continent, in large part because of its massive inflow of rich, capable, experienced Chinese business families.

Could we do much the same thing to revitalize our distressed urban areas such as Detroit? Why not?

Legally, the framework already exists. Congress created  something called an EB-5 visa for immigrant investors as part of the  Immigration Act of 1990. This visa provides a way for immigrants to get a work permit (the so-called “green card”) -- provided they invest at least $500,000 in a business that creates at least 10 jobs.

Tobocman, an attorney who is now head of the Global Detroit Initiative, has studied these matters. He says 10,000 places are offered under the EB-5 program each year, but that more than two-thirds of them go unfilled for want of applications.

That’s clear proof that all the tools are available for Detroit to set up a program to recruit and welcome immigrants who come with capital and willingness to start a business to employ local people. Nor is the opportunity limited to people currently abroad.

There are more than 20,000 foreign nationals currently studying at Michigan universities, many for advanced degrees in engineering and math. Why not reach out to them before they decide to take their degrees and knowledge back home?

Seriously, what’s not to like about a program like this? Anti-immigration forces argue that immigrants take jobs from local people. But exactly the opposite is the case f they come under the EB-5 program. They create jobs. That’s especially true when they are encouraged to start local businesses, employing local people.

Tobocman knows the numbers. In the June 23 Detroit News, Tobocman argued, “international immigration is the only significant population strategy of any scale that has worked across the Northeast and Midwest over the last 20 years. Southwest Detroit’s Hispanic community, east Dearborn’s Middle Eastern community and Hamtramck’s multiethnic community are the envy of every struggling neighborhood in the region." He concluded, “Nothing is more powerful to remaking Detroit as a center of innovation, entrepreneurship and population growth than embracing and increasing immigrant populations and the entrepreneurial culture and global connections they bring.”

Tobocman, a Democrat, and Gov. Snyder, the top-ranking Republican in this state, are both right. Whether it’s a Global Michigan or a Global Detroit, our state stands to benefit big-time by putting out the welcome mat to resourceful, smart, ambitious people from around the world who want to make it big right here.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and president of The Center for Michigan, a nonprofit, bipartisan centrist think-and-do tank, designed to cure Michigan’s dysfunctional political culture. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net