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Liz Farmer: Want a vibrant, growing city to call home? Follow the immigrants

Liz Farmer, Rate.com on

Published in Home and Consumer News

Living amid economic and population growth puts the wind at your back. Demand for housing rises in these areas, so homes appreciate. Highly skilled workers abound, so businesses new and old can prosper. And local and state governments remain solvent, ensuring better services.

How to identify such cities? Just look for places that have a successful immigrant population.

The biggest coastal cities in America are the obvious places to find thriving populations of immigrants, but there are plenty of hot spots around the country with a similar vibe and without the big price tag and traffic.

For example, according to the advocacy group New American Economy, Nashville is about 8% foreign born, and nearly 10,000 of those residents are entrepreneurs contributing to the business economy. In Salt Lake City, immigrants make up 13% of the population; 7,600 of them are entrepreneurs.

Here's why these stats matter: If you are a business owner or just want to be where the population -- and therefore economy -- is growing, immigrants and their kids play a big role. It's simple math. A larger workforce in the future equals more productivity and economic growth. A smaller workforce equals slower growth, or none at all. Native-born Americans are having fewer children, while birth rates tend to be higher among immigrants. So, not only do we need people to move here and add to our working population, but the children of immigrants will also seriously boost the next generation of workers.

This all benefits the economy, and there are many studies that show exactly how. One published by the Urban Institute looked at the long-term effects of immigrants on taxpayers via state and local government spending. First-generation immigrants do tend to cost state and local governments more than native-born adults because they have more children in public school. But over time, those effects reverse.

This shift has a lot to do with educational attainment leading to upward mobility. Second-generation Americans tend to have a higher college graduation rate compared to the average American, according to data from the Pew Research Center. That boosts earning power. So, when the children of immigrants grow up, they contribute more as a group on average to federal, state and local taxes.

How can you find where immigrants are thriving? To answer that question, I used tools that look at their economic impact rather than just population. It's a better measure for how well-rooted and successful immigrant communities are in an area.

At the state level, WalletHub ranks (in order) New York, California, New Jersey, Massachusetts and Maryland as the top five places where immigrants have the most economic impact. It's good to remember that about 85% of immigrants in the U.S. live in cities, so when looking at state statistics, assume that the data is applicable to metro areas.

 

The analysis ranks states across four key dimensions: immigrant workforce; socio economic contribution; brain gain and innovators; and international students. If you are particularly interested in where there's a good foreign-born talent pool, you can select for the brain gain ranking and see that the top five states in that category are New York, Delaware, California, New Jersey and Washington.

To drill down further, New American Economy's Map the Impact project looks at the economic and societal impact of immigrants by Congressional district. Enter your zip code or simply click on the map to get detailed information for your region or any other you want to know about.

The map also has a couple dozen major metro areas with measurable immigrant populations. It's where I got my earlier examples of Nashville and Salt Lake City, and it's a neat way to get a national view of where new Americans are thriving. My favorite example of an unexpected place that's attracting immigrant communities is Minnesota's Twin Cities, home to most of the state's foreign-born population. Many of the nearly half-million immigrants there hail from Mexico, India, Somalia or Ethiopia.

These folks have more than $10 billion in total spending power and most work in transportation and warehousing; healthcare and social assistance; or administrative support. Those figures are comparable to Sacramento, Calif.

These statistics are a launching pad for you to do your own research, depending on what your needs and interests are. But whether you're a homeowner, entrepreneur or just looking for a cool vacation city, exploring this data is a good place to start.

For more real estate news, go to Rate.com/research/news.

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