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Leon Kaye headshot

Far from a Burden, Refugees Are a Net Positive Economically

By Leon Kaye

Estimates suggest the number of Syrian refugees worldwide has passed the 5 million mark, with over 650,000 in Jordan alone. And the discussion over where these displaced citizens will go overlooks the general outcome: Migrants, including refugees, create a net positive impact for communities worldwide.

Recent surveys, as well as studies completed over the past several decades, corroborate the evidence that has long been visible in American communities. Take a look at the 100-plus year history of the Armenian community in Fresno, California, and in recent years, the Hmong; Bosnians who fled the 1990s civil war and relocated to St. Louis; Vietnamese in cities such as San Jose and Houston; or the Haitians and Cubans in Miami. The data suggests that while refugees often face hiccups when they first move to a new land, overall they have a leading role in revitalizing communities and catalyzing economic growth.

As Karen Coates, a journalism fellow at Brandeis University, acknowledged in a recent article, there are some caveats to the conclusions that refugees bring far more to new communities than what they take away. A sudden influx of a million refugees in Germany creates plenty of challenges; that same amount of refugees in a country with its own struggles, including Middle East states such as Lebanon and Jordan, can spark a crisis.

But as the global consultancy McKinsey concluded, refugees can generate an economic boost when they migrate to more developed countries – where at least half of the world’s refugees have resettled in recent years.

Whether migrants move voluntarily or leave political chaos and violence, the statistics are difficult to deny. McKinsey’s researchers concluded that while they comprise 3.4 percent of the world’s population, migrants contribute 10 percent to global GDP. Lower-skilled workers free up established citizens to embark upon higher-value work, and they contribute to society with their own innovation or entrepreneurship. In 2015, that resulted in an additional $6.7 trillion to global GDP.

One microeconomic example is how refugees’ economic impact can be seen in the upstate New York rust belt city of Utica. At one time, the city was an economic powerhouse in its own right. Its network of canals and railroads eventually fostered industries such as textiles, munitions, furniture and electronics. But during the second half of the 20th century, the city’s manufacturing sector lurched into a rapid free-fall, dragging the regional economy down with it.

But in recent years, data suggests the approximate 15,000 refugees who resettled in Utica have provided more than their fair share of economic revitalization. The city’s population has begun to grow again. And, as is the case in many cities and towns, these immigrants have become 30 percent more likely to start new businesses.

In an Associated Press interview earlier this year, the city’s mayor, Robert Palmieri, suggested that those critical of refugee resettlement programs should visit Utica and see the difference.

Noting that Bosnians have refurbished old homes and Somalis have opened businesses in the city’s core, Palmeiri urged leaders to visit his city and learn about immigration's impact, saying: “See what it’s all about and how beneficial it’s been as a melting pot and blending [refugees] into the fiber of America.”

Image credit: Andy V./Flickr

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

Read more stories by Leon Kaye