CFI Report: Immigrant workers critical to Colorado economy

By Thamanna Vasan

Economic Policy Analyst

Colorado immigrants are a crucial – and growing – part of the state’s economy, with many industries relying on their labor. In addition, many immigrants are entrepreneurs, bringing new businesses and jobs to Colorado.

Foreign-born Coloradans are often overlooked by policymakers despite being a growing proportion of our state’s population. In 2013, 9.5 percent of Coloradans were foreign-born compared to 8.6 percent in 2000. In addition, the growth of the immigrant population in Colorado outpaces national growth. From 2000 to 2013, Colorado’s immigrant population grew by 35.4 percent compared to 32.9 percent nationally.

Meanwhile, Colorado’s total population grew by 967,106 people from 2000 to 2013, and 13.5 percent of that population growth can be attributed to the foreign-born Coloradan. In comparison, only 8.9 percent of the national growth in total population was due to an increase in the immigrant population.

This report provides a snapshot of immigrants’ economic contributions and the industries that depend on them. Using American Community Survey and Bureau of Economic Analysis data, the Colorado Fiscal Institute finds that:

• Immigrants are a growing proportion of Colorado’s population. In 2013, immigrants were 9.5 percent of the total population, compared to 8.6 percent in 2000.
• Colorado’s industries depend on immigrant work. Compared to their U.S.-born counterparts, immigrants are more likely to work in blue-collar and service industry jobs. However, the largest share of immigrants works in the white-collar industry.
• Immigrant labor accounted for 21.5 percent of the construction industry;15.3 percent of the arts, entertainment, recreation and food services industries; and 13.9 percent of the manufacturing industry.
• Immigrants start businesses at the same rate as U.S.-born Coloradans. Immigrants account for 9.7 percent of Colorado’s entrepreneurs.
• Immigrants in Colorado are more likely to have jobs than U.S.-born Colorado workers. While only one in 10 Coloradans is foreign-born, immigrants make up a greater share of the labor force at 13.1 percent

Immigrants have a big influence on Colorado’s workforce

In 2013, 68.9 percent of foreign-born Coloradans were working, compared to 67.9 percent of native-born Coloradans. In addition, while only one in 10 Coloradans is foreign-born, immigrants make up 13.1 percent of the total labor force. Immigrants also work in a wide range of industries, including retail, education, manufacturing, construction and finance. Approximately 49.9 percent of immigrants work in white-collar jobs compared to 64.1 percent of U.S.-born workers in Colorado. The greatest share of immigrants are employed in jobs in education, health care and social assistance. However, immigrants are more likely to work in blue-collar and service jobs than Coloradans born in the U.S., with the largest share working in construction (Table 1).

The construction industry is most dependent on immigrant labor. In 2013, 21.5 percent of construction workers in Colorado were immigrants (Table 2). The construction industry currently employs 187,884 Coloradans, of which 40,370 are foreign-born. Before the recession, 19.4 percent of the construction industry was foreign-born.

Immigrant workers are also important to Colorado’s large tourism, manufacturing and agricultural industries. The arts, entertainment, recreation, and food services industry employs 43,683 immigrants, while manufacturing and agriculture employ approximately 26,000 and 9,000 immigrants, respectively.

A Growing Share of Colorado’s Entrepreneurs Are Immigrants

Immigrants also contribute to our community by establishing businesses. Approximately 9.7 percent of Colorado’s entrepreneurs are foreign-born, a rate similar to their U.S.-born counterparts. In 2013, 7.9

percent of foreign-born Coloradans were entrepreneurs.[1]  In 2000, only 5.5 percent of foreign-born Coloradans were self-employed. In comparison, 7.6 percent of U.S.-born Coloradans were self-employed in both 2013 and 2000. This means that, now more than ever, immigrants are creating small businesses and taking the risk of directly creating jobs for Colorado at the same rate as the native-born population. [2]

Construction, real estate and household services provide the new business opportunities for immigrants in Colorado (Table 3).

Immigrants make a critical contribution to Colorado’s economy

Immigrants paid $3.5 billion in taxes to Colorado in 2010, with undocumented immigrants contributing approximately $1.3 billion, according to estimates by the Center for American Progress. In addition, they estimated that immigrants added $21.6 billion to the Gross State Product and generated $43.8 billion in the way of goods and services for the state.[1]

These contributions to the state’s economy are significant, but economic participation of immigrants is still limited. Allowing for the expansion of visa programs and allowing undocumented immigrants to enroll in a legal path to citizenship will generate increased output of services and goods and thousands of new jobs. Undocumented immigrants who enroll in a legal path to citizenship will generate more than 9,800 new jobs and more than $840 million for the state by 2020, The Regional Economic Model, Inc. (REMI) Expansion of visa programs would result in 5,600 new jobs and add $2.7 billion to Gross State Product by 2020, REMI estimates.[1]

[1]For this analysis an entrepreneur is defined as self-employed in an incorporated and not incorporated businesses, professional practices, or farms

[2] Colorado Fiscal Institute analysis of Colorado-specific IPUMS-USA, American Community Survey, 1 year estimates, University of Minnesota, www.ipums.orga

[3] “The Consequences of Legalization Versus Mass Deportation in Colorado”, August 2012, Raúl Hinojosa-Ojeda, Center for American Progress, https://cdn.americanprogress.org/wp-content/uploads/2012/08/Colorado-2.pdf

[4] “Economic Effects of Key Components of Immigration Reform, Colorado”, Regional Economic Models, Inc., 2013