Immigrants fuel LI economy : Long Island Wins

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Immigrants fuel LI economy: Written October 27, 2011 by Claude Solnik, Long Island Business News

Hirvyn Hernandez came with his family to the United States at age 11 from El Salvador. One sister became a lawyer, while another became a psychiatrist. He left school to work in construction. But instead of being an employee, Hernandez, like many other immigrants, became an entrepreneur. Today, he owns and runs Designs by Hirvyn.

“I opened up a fence company,” Hernandez said. “People kept asking me for patios and driveways.”

Due to the demand, he created a masonry division and recently started a waterfall division in his company that employs eight. “Business is awesome,” he said. “I just bought some new machinery.”

Although discussion about immigration on Long Island often focuses on problems, prejudice and lack of documentation, a new study of immigration on Long Island by Manhattan-based nonprofit Fiscal Policy Institute found that immigrants create a huge number of businesses.

“I think part of it can be seeing an opportunity that others don’t see,” said David Dyssegaard Kallick, the author of the study and a senior fellow and director of the Immigration Research Initiative at the Fiscal Policy Institute. “Some of it can be not having a lot of choices. Somebody else might be more readily hired as an accountant in a big accounting firm. If an immigrant has a harder time doing that, he or she might go out and start a business instead.”

The study found immigrants own 22 percent or 15,000 of Long Island’s 53,000 small businesses, generating $804 million or 16 percent of the total income for small businesses in the region.

Immigrants own 29 percent of all small businesses in Nassau County, generating $500 million or 16 percent of all small business profits. Immigrants in Suffolk County own 15 percent of small businesses, generating $300 million or 12 percent of all small business profits.

“These are people who were born in another country,” Kallick said. “It could be recent immigrants or immigrants who have been in the U.S. for a longer time.”

Although the Fiscal Policy Institute has done immigration studies of other regions since 2006, Kallick said it focused on Long Island because of the primacy of the debate over undocumented immigrants.

“We looked at immigrants on Long Island because it’s been such a controversial issue,” Kallick said. “I feel people see only problems and don’t recognize, as much as they should, the economic role of immigrants.”

Others agreed the word “immigration” on Long Island often summons concerns rather than the larger reality of immigrants as building businesses and boosting the economy.

“There’s a negative narrative out there on Long Island and in the country. They don’t know what the reality is. That’s why studies like this are so important,” said Maryann Sinclair Slutsky, director of Long Island Wins, an immigration advocacy group. “The assets that immigrants bring to our community and social fabric shouldn’t be understated.”

A study Adelphi University prepared for the Hagedorn Foundation in 2008 found that immigrants added $10.6 billion to total Long Island output and generated 82,000 jobs. Excluding new immigrants, Long Island would have lost, rather than gained, population since 1980, according to the Adelphi study.

“Immigrants are the continuation of this country. The majority of immigrants are coming here for a better life,” said Maria Morales-Prieto, CEO of The Hispanic Network. “The guy who’s cutting your grass today, his daughter’s going to be performing surgery on your grandchild tomorrow.”

The Fiscal Policy Institute study, which relied in part on U.S. Census data, found, of businesses started by immigrants, natives of Italy make up the biggest chunk of Long Island business owners at 11 percent. That’s followed by 9 percent for immigrants from Korea, 8 percent from India, 5 percent from El Salvador, 4 percent from China and Iran and 3 percent from Colombia, the Dominican Republic and Greece.

“There’s a lot of them,” Hernandez said of immigrant entrepreneurs from Latin America. “A lot of my buddies have successful businesses.”

Morales-Prieto said concentrations of immigrants from certain regions often fuel immigrant entrepreneurs, supplying customers and providing support. Many natives of India live in Hicksville and New Hyde Park, while many from Latin America live in Hempstead.

“Who are their patrons?” she said of Latino-owned businesses in Hempstead. “The people speaking Spanish. They sustain each other’s business that way.”

Immigrants own 2,900 construction businesses or 22 percent of small businesses in that sector, 27 percent of stores and 18 percent of small educational, health and social services companies.

“You can see in the concentrations in retail, grocery, restaurants, nail salons,” Kallick said. “It’s often businesses that don’t require big capital investment. It’s not necessarily the highest-end business. It’s businesses that often give a downtown area its feeling of street life and character.”

The majority of nail salons – 68 percent – are owned by immigrants, while immigrants own 44 percent of locally owned restaurants, 40 percent of beauty salons, 36 percent of landscaping services companies, 26 percent of real estate companies and 25 percent of physician offices.

“They come here motivated to work,” Slutsky said. “There are more immigrant entrepreneurs than native-born entrepreneurs. The obstacles are more difficult. Those immigrants opening businesses and employing a work force know the importance of learning a language.”

Kallick said while many immigrants are low-wage workers, immigrants also have created many companies in the region. In addition to helping found large companies on Long Island such as CA Technologies, immigrants fuel much of the innovation and new business in the region.

“I do think it’s important for people to realize and remember,” Kallick said. “A lot of small business owners are immigrants. They’re creating jobs for other immigrants and U.S.-born workers.”

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