Minding the Economic Gap: The Role of Refugees in Economic Development
As refugees continue to arrive across Europe, non-entry point cities of Europe and the United States should consider proactively adopting measures to attract migrants to their communities as part of a long-term inclusion strategy. Far from looking at resettled refugees as a burden on limited government resources, communities should instead see migrants as an external stimulus to the economy with high potential to fill labor market gaps and provide new employment opportunities. Ultimately, the vast majority of migrants stay in the country to which they originally fled and less than 1% are resettled in third countries. This gives cities time to craft policies to welcome refugees into their communities and grow stronger, more inclusive economies.
Throughout Europe and the U.S., there are already several examples of cities that have sought to proactively attract immigrants to boost economic development strategies and fill vacant homes and storefronts. For example, Dayton, Ohio, became one of the first “Welcoming Cities” in America with its Welcome Dayton program. The initiative was built on the belief that people from diverse backgrounds, with varied skills and experiences, could fuel the city’s revival.
What are the results of Dayton’s efforts? As population decline hit many American Rust Belt cities beginning in the 1970s, so too, did the population of Dayton. Between 2009 and 2013, the total population steadily decreased. However, the trend began to reverse in 2013 with a nearly 59% increase in the foreign born population over the same time period. Foreign-born residents currently make up nearly 5% of Dayton’s total population. Furthermore, Dayton has a 3:1 ratio of high-skilled to low-skilled immigrants and nearly 40% of their foreign born adults have a bachelor’s degree or higher, compared to only 25% of native-born residents. In a 2013 article, Julia Preston of the New York Times profiled the Turkish immigrant community in Dayton. She found that nearly 400 Turkish families have moved into the once vacant and blighted area of north Dayton, opening businesses, fully participating in civic affairs, and investing nearly $30 million in the city.
Another former industrial city is hot on the heels of the refugee crisis and has publicly announced that it is willing to host Syrian refugees. Detroit is an ideal location to resettle these refugees given the existing large Arab-American population and their strong social and economic networks. It is therefore no surprise that as part of a program to revitalize the city of Detroit, Governor Rick Snyder called for an infusion of 50,000 immigrants and created the Michigan Office of New Americans in 2014. Currently, the Arab-American population in the Detroit metro area accounts for 19% of entrepreneurs and has a median household income at or above the median household income for the entire Detroit metro area. As the city embraces its path to recovery, new populations can infuse the city with new ideas, talent, and energy.
One of the main themes of the recent Bilbao Urban Innovation and Leadership Dialogues (BUILD) is sustainable and equitable urban transformation, a theme made particularly significant this year given the migration crisis that is taking place across Europe. Michael Munter, director of policy for the City of Stuttgart and a BUILD 2015 plenary speaker, spoke about many of the challenges his city now faces integrating refugees. Approximately 240,000 city residents have a migrant background, with 20,000 newcomers arriving each year. He spoke about a successful effort to remake the demographics of the city administration as part of a new welcoming program; 47% of new apprentices in the city administration now have a migrant background, which is representative of the overall demographics of the city.
A recent article on BBC asks which European countries are in the best position to accept refugees. The article notes population projections over the next 65 years, population density, job vacancy rates, and public services. The article suggests countries with a decreasing population, lower population density, higher job vacancy rates, and less strained public services may be best equipped to accept refugees. Using these same criteria, how would the United States fare? Perhaps the most interesting figure to assess is job vacancy rates. Total non-farm job openings in the United States in July 2015 was 3.9%, higher than any European country profiled in the BBC article, indicating that the United States has available jobs and suggesting that it has the potential to absorb refugees.
Europe and the United States need migrants more than almost any other resource. Projections show gross declines in population in many European countries due to aging populations and birth rates that are lower than replacement rates. Without a steady flow of immigration, Germany’s population will decrease by over 10 million by 2050. Generations of immigrants have helped build the American economy and are critical to ensure future economic growth. Cities can therefore scarcely afford to neglect the potential economic boost that immigrants can have on their local economies. In an effort to move toward more sustainable and equitable urban transformation policies, perhaps it is time to grow our communities and economies by welcoming newcomers and see them not as part of the problem, but as a key element of the solution.
The views expressed in GMF publications and commentary are the views of the author alone.