New research shows refugees contribute $295M annually to Michigan economy

By Vanessa Denha Garmo

More than 40 people gathered at Shenandoah Country Club on October 17 just outside the Chaldean Cultural Center in West Bloomfield to hear the results of an economic research study.

Every year, refugees to Southeast Michigan contribute up to $295 million to the region’s economy and, in 2016 alone, they created up to 2, 311 new jobs. That’s according to a new study released by Global Detroit and University of Michigan researchers.

The study estimates total annual economic impact to be between $229.6 million and $295.3 million in new spending, along with between 1,798 and 2,311 new jobs, in 2016 alone, from the over 21,000 refugees that resettled into Macomb, Oakland, Washtenaw and Wayne Counties between 2007-2016.

 “Michigan has been the fourth largest destination state for refugees over the last decade. Our research documents that these new Michiganders have been a source of strength to the Michigan economy—launching new businesses, providing much-needed labor, and achieving self-sufficiency within a very short time after their arrival,” said Steve Tobocman, Executive Director of Global Detroit and one of the study’s principal authors. “While refugee policies and politics necessarily extend beyond economics, our research verifies that being welcoming to refugees is in our own economic self-interest.”

The report claims that the economic impact and new job creation stems from more than 21,000 refugees who resettled in Macomb, Oakland, Wayne and Washtenaw Counties between 2007 and 2016.

"Michigan has been the fourth largest destination state for refugees over the last decade," said Tobocman. Global Detroit is a group that supports immigrant entrepreneurs and works to leverage international talent to fill local business needs.

Contributors of the study included, Samaritas, Catholic Charities of Southeast Michigan, Jewish Family Services of Washtenaw, U.S. Committee for Refugees and Immigrants, Welcoming Michigan-Michigan Immigrant Rights Center, and the Chaldean Chamber of Commerce.

"Our research documents that these new Michiganders have been a source of strength to the Michigan economy – launching new businesses, providing much-needed labor, and achieving self – sufficiency within a very short time after their arrival.

The results of the study noted that 90 percent of the 21,000 refugees in Michigan were from Iraq.

“Here in metro-Detroit, the Chaldean community is an entrepreneurial community,” said Martin Manna, president and CEO of the Chaldean American Chamber of Commerce. “According to reports, Chaldeans contribute $10.7 Billion annual to economy in Southeast Michigan, 65 percent own at least one business and 39 percent own two business. We are grateful to be in this country.”

Tobocman noted that the refugee issue is more of human rights issues, yet it is worth noting that these same people who fled to the United States to escape persecution and seek refuge are also contributing to the economy.

"While refugee policies and politics necessarily extend beyond economics, our research verifies that being welcoming to refugees is in our own economic self-interest," Tobocman stated.

It is estimated that at least 150,000 Chaldeans live in Southeast Michigan, and that more than 61 percent of their households’ own businesses.

“More than half of the refugees who come to the United States, come with sponsors, meaning they are sponsored by families and do not take government assistance,” said Manna, “and those who do rely on government services only do for a short-period of time.”

According to the research, approximately 90 percent of the refugees resettled in Southeast Michigan from 2007-2016 are Iraqi. An estimated 7 percent of the refugees placed in Southeast Michigan during this period are Syrian with larger number of Syrians refugees arriving in more recent years.

"Studies like today's report can help public policy makers, local and state government, philanthropy, and even the private sector," said Elisabeth Gerber, professor and associate dean at the Ford School of Public Policy at UM, in a news release.

"It is our hope that local communities deciding to welcome refugees can use this research to better integrate refugees, help them achieve self-sufficiency, and insure that their resettlement is an economic benefit to the local community."

In September, President Donald Trump announced that the U.S. would only accept 45,000 refugees over the next year, which Tobocman noted is the lowest number on refugee admissions since 1980.

“We must humanize the refugees issue and stop politicizing the refugee issue,” said Mihaela Mitrofan, program manager of Samaritas.  “We must recognize that refugees are the most thoroughly vetted immigrants.”

About 22 million people, with a significant amount being children, are unsafe in their home countries, according to Global Detroit. The U.S. has accepted more than 3 million refugees since 1975.

The study found that over time, from resettlement to learning English to finding jobs and starting their own businesses, “refugees really begin to find their own niche,” Tobocman said.

Fast Facts about Refugee Resettlement in Southeast Michigan 2007-2016

Economic Contributions

·         Total annual economic contribution in 2016 from resettling refugees in Southeast Michigan over the past decade is estimated to be between $229.6 million and $295.3 million, with an estimated 1,798 to 2,311 additional jobs created.

·         Spending of federal contractual dollars by the region’s four refugee resettlement agencies in 2016 accounts for $12.2 million to $15.7 million in annual spending activity and 164 to 211 jobs.

·         Spending by refugee households who arrived between 2007-2016 is estimated to contribute $164.3 million to $211.3 million in annual spending, supporting 1,315 to 1,690 jobs.

·         A very conservative estimate suggests that these refugees own 438 businesses who collectively spend $70.1 million to $90.2 million in a given year and provide between $70.1 million and $90.2 million in economic benefits for Southeast Michigan, including between 319 and 410 local jobs.

·         (Note that the total economic contribution is less than the sum of the three components because several elements, such as the spending of refugee employees of the resettlement agencies or refugee-owned businesses are included in multiple components).

 

Composition of Southeast Michigan’s Refugees

·         Between 2007-2016, Southeast Michigan’s refugee resettlement agencies resettled 21,045 refugees, or about 61% of all refugees resettled in Michigan. Resettlement numbers can fluctuate fairly significantly between years, but the largest number of refugees over this period arrived in 2016. Reported refugee resettlement numbers in July and August 2017 (a period not included in the Global Detroit study), however, were sharply lower than at any time during the study and were as low as 10% of similar months in 2016.

·         Approximately 90% of the refugees resettled in Southeast Michigan from 2007-2016 are Iraqi. An estimated 7% of the refugees placed in Southeast Michigan during this period are Syrian with larger numbers of Syrian refugees arriving in more recent years.

·         In 2015, refugee resettlement accounted for 39% of Michigan’s population growth. While the state’s population declined by 112,000 from 2006 to 2016, more than 35,000 refugees were placed in Michigan, suggesting that our population loss would be that much greater, but for refugee resettlement.

·         Refugees to Southeast Michigan are younger than the local population. Upon arrival 30% of refugees were 15 and under (compared to 20% of Southeast Michigan residents overall) and only 5% of new refugees were over age 65 (compared to 14% of Southeast Michigan residents overall).

·         While numbers on the geographic placement of refugees are not very precise, State Department data indicates that refugees are most often resettled in Oakland County (53% of the Southeast Michigan total) and Macomb County (34% of the total). Wayne County accounts for 9% and Washtenaw for 3%.

·         Southfield, Sterling Heights, Troy, Warren, and Madison Heights received the largest numbers of refugees during the decade, with estimates that Southfield and Sterling Heights each resettled more than 4,000 new refugees. (Again, State Department data on the actual placement of refugees is far from precise and there is good reason to believe that the numbers in Southfield and Sterling Heights are inflated. Still, conversations with those working with refugees support the general nature of the information on geographic place).

·         Refugee resettlement in Southeast Michigan from 2007-2016 is a markedly suburban affair. Less than 2% of refugees resettled into the region were resettled into the City of Detroit during this period. Although through efforts of Detroit Mayor Mike Duggan’s Office of Immigrant Affairs, the City of Detroit has been home to more than 300 refugees in the last 18 months alone, almost equal to the total number resettled in the prior decade.

·         The available data estimates that Southeast Michigan is likely a net attractor of secondary migration of refugees (refugees who move from their area of initial placement). Anecdotally, social service agencies report that Middle Eastern refugees resettled in other parts of the U.S. often move to the Detroit region because of its strong Middle Eastern community. With Iraqi and Syrian refugees comprising 97% of the refugees resettled in the region, it is expected that few of these refugees move away from the region. Unfortunately, there is no easy way to track secondary migration and the study does not include specific numeric estimates.

 

Insights from Other Studies – Other Economic Impacts

·         According to the New American Economy’s June 2017 report, “From Struggle to Resilience: The Economic Impact of Refugees in America”, Michigan is one of 18 states where refugee spending contributes more than $1 billion annually to the state economy. (Note this report includes all refugees, not just those resettled over the last 10 years).

·         According to the same New American Economy report, the U.S. was home to more than 180,000 refugee entrepreneurs in 2015 whose businesses generated over $4.5 billion in business income. Refugee were almost 1.5 times more likely to be entrepreneurs than the U.S.-born population, rates even higher than the average immigrant communities. A full 13 percent of refugees were entrepreneurs in 2015, compared to just 11.5 percent of non-refugee immigrants and 9.0 percent of the U.S.-born population.

·         The NAE report found that refugee household incomes more than tripled in the 25 years after arrival, growing far faster than other immigrant groups. By the time a refugee has been in the country at least 25 years, their median household income reaches $67,000—a full $14,000 more than the median income of U.S. households overall. This suggests that the economic impacts estimated in Global Detroit’s study will vastly increase over the next decade.

 

Insights from Other Studies – Fiscal Impacts

·         Over a ten-year period (2005-2104) it is estimated that refugees brought in $63 billion more revenue to federal, state, and local governments than they cost. Contained in a July 29, 2017 draft federal report entitled “The Fiscal Costs of U.S. Refugee Admissions Program at the Federal, State, and Local Levels,” the report sought to estimate the long-term costs of the U.S. Refugee Admissions Program on the federal, state, and local level in response to a March 6, 2017 memorandum from President Trump to the Security of State, Attorney General, and Secretary of Homeland Security. https://www.nytimes.com/interactive/2017/09/19/us/politics/document-Refugee-Report.html

·         The National Bureau of Economic Research (NBER) reports that just eight years after their arrival on average, the taxes refugees paid exceeded all benefits they received. And over the first 20 years after resettlement, refugees paid $21,000 more in taxes, on average, than they received. William N. Evans and Daniel Fitzgerald, “The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS,” NBER Working Paper Series, June 2017, accessed at http://www.nber.org/papers/w23498

·         According to the New American Economy’s June 2017 report, “From Struggle to Resilience: The Economic Impact of Refugees in America”, refugees contribute an estimated $130.8 million in state and local taxes in Michigan each year.

 

Insights from Other Studies – Safety

·         According to the conservative Cato Institute in an analysis of terrorist attacks on U.S. soil over the last 40 years, zero refugees have been implicated in a fatal terrorist attack in the U.S. since the Refugee Act of 1980 created systematic vetting procedures. In fact, the chance of an American being murdered in a terrorist attack caused by a refugee is 1 in 3.64 billion per year. https://www.cato.org/publications/policy-analysis/terrorism-immigration-risk-analysis

·         While Southfield, Michigan received the seventh highest ratio of any U.S. city of refugees resettled from 2006-2015 compared to its overall population, it experienced a 77% drop in violent crime during that period. In fact, according to data analyzed by the New American Economy, 9 of the top 10 U.S. cities in ratio of refugees received compared to overall population from 2006-2015 saw drops in violent crime, as well as property crime. Southfield saw the largest drops in crime of any of these 10 cities, during a period in which it received over 4,000 new refugees. http://www.newamericaneconomy.org/research/is-there-a-link-between-refugees-and-u-s-crime-rates/