Immigration Reform and Its Impact on Small Businesses

There has been a lot of talk in the news about immigration reform and we’ve heard from members wondering what that will mean for them. On May 8, 2013, the Wisconsin LGBT Chamber of Commerce co-sponsored a call by Small Business Majority to discuss the implications that immigration reform will have on small businesses here in Wisconsin.

According to Small Business Majority, currently, there are 11 million undocumented workers in the United States. If immigration reform takes place, there could be $1.5 trillion added to the economy within 10 years. The net increase of tax revenue could range from $4.5 billion to $5.3 billion within the first three years after the reforms take place.

How is immigration reform being handled by the United States government? There are two plans that have been put forward for consideration. The US Senate introduced a bill which was drafted by senators who have been dubbed the “Gang of Eight.” It is intended to work as a template to be used jointly by Congress and the president. The Obama Administration has also proposed a bill that closely resembles the plan created by the Senate.

Both plans would require employee verification, impose fines on businesses who knowingly employ undocumented workers and require the creation of new fraud-resistant social security cards.

Seven in ten entrepreneurs believe in delaying it the employment verification system until it is bug-proof and fully operational. Both plans proposed offer phase in like techniques in order to assure that no burden would take place on small businesses.

While immigration reform would make a tremendous difference regarding those who want to come to the United States, there is the question of what happens to the undocumented workers who are already living and working in the country. The plans proposed would allow for a path of citizenship for the immigrants who have no criminal record. In order to gain legal citizenship, the individual would have to register for legal status, pass a background check, learn English, as well as pay a fine and satisfy their federal tax liabilities.

These immigration reform plans would offer new visa programs to legal immigrants who have degrees within science, technology, engineering or math (which is also considered as a STEM degree). Based on income and job creation, more visas will also be offered. The Senate bill also proposed a new “W-visa” program for low skilled guest workers. A program will also be implemented for those who work in the agricultural field.

Immigration reform is important for the small business community because it will provide a more stable workforce. 

Immigrants play a large part within the small business community. In the research conducted by Small Business Majority, it was found that 22% of small businesses have employed a legal immigrant and that number reaches 45% when it comes to businesses that employ more than 10 individuals. The research also showed that 11% of small business owners define themselves as immigrants and that 21% of owners say they have at least one parent that is an immigrant. In 2011 alone, there was over $775 billion in revenue generated from immigrant-owned businesses.

As more information becomes available on the proposals and the plans advance through Congress, we will be sure to keep our members informed on what impact the proposed reforms will have on your business.

Article by Amanda Peschek, Communications and Outreach Intern