Labor Pains

If immigration laws tighten, all entrepreneurs could feel the squeeze.
Magazine Contributor
2 min read

This story appears in the May 2003 . Subscribe »

Just what will happen to the economy if tighter immigration policies reduce the flow of immigrants? That's a serious question many entrepreneurs are mulling over in the wake of newly formed attitudes toward immigrants, post 9/11.

The U.S. economic boom of the 1990s was fueled by labor arriving from other countries, according to an analysis of Census data done by the Center for Labor Market Studies at Northeastern University in Boston. Immigration hit record levels last decade, as more than 13 million new immigrants entered the country. Because those immigrants tended to be relatively young men who were hungry for work, they had an outsized impact on the U.S. supply of labor, making up nearly half of labor supply growth from 1990 to 2001.

Looking forward, the primary concern is what effect 9/11 will have on the labor pool. "When the recovery occurs, the overall labor market will tighten up very quickly," says Paul Harrington, associate director of the labor center. You're going to be pretty dependent on foreign labor." As many of the 1990s immigrants are believed to have been illegal, sharply curtailing illegal immigration might hurt the overall labor supply, affecting even businesses that don't employ illegal immigrants.

No dropoff in immigration has materialized yet, says Harrington. But unlike countries such as Canada and Australia that tie immigration policy to economic policy, U.S. policy focuses on accommodating political refugees and reuniting families.

While national security is an important part of the immigration policy issue, another major question is how labor supply should be factored into the decision. "We've let the flow of immigrants answer that for us," says Harrington. "We need to start answering it for ourselves."

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

It Started As a Joke and Turned Into a Startup That Raised $1 Million in Funding