Last month, immigrants across the U.S. went on a one-day strike to highlight their importance to the nation’s economy.
While Wisconsin doesn’t have a large immigrant population, it is growing and it’s economic impact on the state is quite significant. Yet, a new study from the financial education website NerdWallet shows immigrant households in Wisconsin are making that impact on less income than their U.S.-born counterparts.
According to NerdWallet, immigrants in Wisconsin earn $47,575 in median annual income, while U.S.-born households earn $56,025.
Much of the data in the study comes from the U.S. Census Bureau and the 2015 American Community Survey, which defines immigrants or “foreign-born” residents, as people who weren’t U.S. citizens at birth, but who lived in the nation at the time of the 2015 ACS. Neither the Census Bureau nor NerdWallet distinguish between authorized and unauthorized immigrants.
The Census Bureau data points to a few reasons why foreign-born households in Wisconsin may earn less than U.S.-born households. According to the data, immigrants do work in management, business, and science, but at a rate 4% less than U.S. born households.
Language could also be a barrier for why immigrants are making nearly $10,000 less in Wisconsin, since 25.8% of households have limited English-speaking abilities. Additionally, there are slightly fewer self-employed immigrants in Wisconsin than U.S.-born business owners (4.6% vs. 5.2%).
Economic driver
In spite of their lower household incomes, Wisconsin immigrants are a critical piece of the Badger State’s economy.
According to the New Americans in Wisconsin report from the American Immigration Council published in 2015, “immigrants, Latinos, and Asians account for growing shares of the economy and population in Wisconsin. Immigrants (the foreign-born) make up 4.8% of the state’s population, and more than two-fifths of them are naturalized U.S. citizens who are eligible to vote. ‘New Americans’ — immigrants and the children of immigrants — account for 3.5% of registered voters in the state. Immigrants are not only integral to the state’s economy as workers, but also account for tens of million of dollars in tax revenue and consumer purchasing power.
“Moreover, Latinos and Asians (both foreign-born and native-born) wield $12.5 billion in consumer purchasing power, and the businesses they own had sales and receipts of $4.7 billion and employed more than 26,500 people at last count.”
From 2000 to 2010, a number of cities in Wisconsin saw their population increase mostly or in part due to immigration, according to the Chicago Council on Global Affairs. Madison’s population during that period experienced 18.8% growth due to immigration. Other metro areas experiencing significant growth due to immigration include Sheboygan (82.5%), Appleton-Oshkosh (11.7%), Eau Claire (8.6%), Green Bay (18.7%), Janesville (24.8%), La Crosse (30%), Milwaukee (46.6%), and Racine (27.1%).
The New Americans in Wisconsin report shows that during that same 2000–2010 period the value added by immigration to the price of the average home in Dane County was $979.
The 2014 purchasing power of Latinos in Wisconsin totaled $7.4 billion — an increase of 855% since 1990, notes the New Americans report, and Asian buying power totaled $5 billion — an increase of 856% since 1990.
From 2006 to 2010, there were 10,342 new immigrant business owners in Wisconsin, and new immigrant business owners had total net business income of $589 million, which represented 4.6% of all net business income in the state.
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Taxing situation
Immigrants are also a boon for Wisconsin’s tax rolls, and in this particular case the distinction between authorized and unauthorized immigrants is actually quite important.
According to the U.S. Census Bureau, immigrants comprised 5.6% of the state’s workforce in 2013 (or 172,619 workers). The Pew Hispanic Center also reports that in 2012 unauthorized immigrants comprised 1.8% of the state’s workforce (or 55,000 workers).
Latinos in Wisconsin paid $605 million in federal taxes and $420 million in state/local taxes in 2013, according to the Partnership for a New American Economy. In particular, foreign-born Latinos paid $228 million in federal taxes and $178 million in state/local taxes.
The federal tax contribution of Wisconsin’s Latino population included $511 million to Social Security and $120 million to Medicare in 2013. Foreign-born Latinos contributed over $215 million to Social Security and $50 million to Medicare that year.
Here’s where the data gets really interesting. Unauthorized immigrants in Wisconsin paid $98.7 million in state and local taxes in 2010, including $66.9 million in sales taxes, $22.9 million in state income taxes, and $8.9 million in property taxes, according to data from the Institute for Taxation and Economic Policy.
Were unauthorized immigrants in Wisconsin to have legal status, they would pay $131.3 million in state and local taxes, including $69.9 million in sales taxes, $52.2 million in state income taxes, and $9.1 million in property taxes.
If all unauthorized immigrants were removed from Wisconsin, the state would lose $2.6 billion in economic activity, $1.2 billion in gross state product, and approximately 14,579 jobs, even accounting for adequate market adjustment time, according to a report by the Perryman Group.
“Wisconsin can ill-afford to alienate such an important component of its labor force, tax base, and business community,” the New Americans in Wisconsin report notes.
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