Immigrant Entrepreneurs Creating Jobs and Strengthening the U.S. Economy in Growing Industries

The focus of this report evolved from a 2010 conference at Babson College on "Immigrant Entrepreneurship in Massachusetts" sponsored by The Immigrant Learning Center, Inc. (ILC) from which two key ideas emerged. One is that there is an "immigrant entrepreneurship ecology" that includes immigrant neighborhood storefront businesses; immigrant high-tech and health science entrepreneurs; immigrant non-tech growth businesses; and immigrant transnational businesses. A second idea was that these growing, non-tech industries (including transportation, food and building services) have not attracted much attention. Interestingly, these sectors can be crucial to the expansion of the green economy. Within this context, The ILC decided to look at these three sectors in Massachusetts as well as in New York and Pennsylvania.Moreover, the report dramatically illustrates how immigrant entrepreneurs look for niches in underserved markets. For example, vans and other alternatives to mass transit serve unmet transportation needs in urban areas. Food intended to be a "taste of home" for compatriots in local restaurants and grocery stores becomes popular and influences the eating habits of other Americans. Workers who enter industries like landscaping or cleaning because they don't require much English gain experience and see opportunities to start their own companies. Businesses like these add value to American life by expanding the economy rather than taking away from native businesses

Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data

[Excerpt] The impact of foreign direct investment on U.S. employment is provoking a national debate. While local communities compete with one another for investment projects, many of the residents of those communities fear losing their jobs as U.S. companies seek out foreign locations and foreign workers to perform work that traditionally has been done in the United States, generally referred to as outsourcing. Some observers suggest that current U.S. experiences with outsourcing are different from those that have preceded them and that this merits legislative actions by Congress to blunt the economic impact of these activities. Other observers argue that investing abroad by U.S. multinational companies impedes the growth of new jobs in the economy and thwarts the nation’s investments in high technology sectors. Some opponents also argue that mid-career workers who lose good-paying manufacturing and service-sector jobs likely will never recover their standard of living. Economists and others generally argue that free and unimpeded international flows of capital have a positive impact on both domestic and foreign economies. Direct investment is unique among international capital flows because it adds permanently to the capital stock and skill set of a nation, but it also challenges the general theory of capital flows because of the presence of strong cross-border and intra-industry investment. Supporters contend that to the extent that foreign investment shifts jobs abroad, it is a minor component of the overall economic picture and that it is offset somewhat by the investment of foreign firms in the U.S. economy (referred to as insourcing), which supports existing jobs and creates new jobs in the economy. Broad, comprehensive data on U.S. multinational companies generally lag behind current events by two years and were not developed to address the issue of jobs outsourcing. Many economists argue, however, that there is little evidence to date to support the notion that the overseas investment activities of U.S. multinational companies play a significant role in the rate at which jobs are created in the U.S. economy. Instead, they argue that the source of job creation in the economy is rooted in the combination of macroeconomic policies the nation has chosen, the rate of productivity growth, and the availability of resources. This report addresses these issues by analyzing the extent of direct investment into and out of the economy, the role such investment plays in U.S. trade, jobs, and production, and the relationship between direct investment and the broader economic changes that are occurring in the U.S. economy. This report will be updated as events warrant

NAFTA Renegotiation and Modernization

The 115th Congress faces policy issues related to the Trump Administration’s renegotiation and modernization of the North American Free Trade Agreement (NAFTA). NAFTA negotiations were first launched in 1992 under President H. W. Bush, who signed the agreement in December 1992, and continued under President Bill Clinton, who negotiated additional side agreements on labor and the environment. President Clinton signed the agreement into law on December 8 1993, (P.L. 103-182) and NAFTA entered into force on January 1, 1994. It is particularly significant because it was the most comprehensive free trade agreement (FTA) negotiated at the time, contained several groundbreaking provisions, and was the first of a new generation of U.S. FTAs later negotiated. Congress played a major role during its consideration and, after contentious and comprehensive debate, ultimately approved legislation to implement the agreement. NAFTA established trade liberalization commitments that set new rules and disciplines for future FTAs on issues important to the United States, including intellectual property rights protection, services trade, dispute settlement procedures, investment, labor, and the environment. NAFTA’s market-opening provisions gradually eliminated nearly all tariff and most nontariff barriers on goods produced and traded within North America. At the time of NAFTA, average applied U.S. duties on imports from Mexico were 2.07%, while U.S. businesses faced average tariffs of 10%, in addition to nontariff and investment barriers, in Mexico. The U.S.-Canada FTA had been in effect since 1989. Trade among NAFTA partners has tripled since the agreement entered into force, forming a more integrated North American market. The Trump Administration has made NAFTA renegotiation and modernization a prominent initial priority of its trade policy. President Trump has viewed the agreement as the “worst trade deal,” and has stated that he may seek to withdraw from the agreement. He has focused on the trade deficit with Mexico as a major reason for his critique. On May 18, 2017, the Trump Administration sent a 90-day notification to Congress of its intent to begin talks to renegotiate NAFTA, as required by the 2015 Trade Promotion Authority (TPA) (P.L. 114-26). Negotiations started August 16, 2017. Stating they are committed to an expeditious process, negotiators plan to have a series of seven rounds at three-week intervals for a conclusion by the end of 2017 or early 2018. The fourth round of negotiations began at the time this report was printed. The final text of the agreement will not be released until after negotiations are concluded. NAFTA parties have agreed that the information exchanged in the context of the negotiations, such as the negotiating text, proposals of each government, and other materials related to the substance of the negotiations, must remain confidential. Congress will likely continue to be a major participant in shaping and potentially considering an updated NAFTA. Key issues for Congress in regard to the renegotiation or modernization include the constitutional authority of Congress over international trade, its role in revising or withdrawing from the agreement, the U.S. negotiating objectives, the impact on U.S. industries and the U.S. economy, the negotiating objectives of Canada and Mexico, and the impact on broader relations with Canada and Mexico. The outcome of these negotiations will have implications for the future direction of U.S. trade policy under President Trump. NAFTA renegotiation may provide opportunities to address issues not covered in the original text. Technology and industrial production processes have changed significantly since it was negotiated. The widespread use of the Internet has affected economic activities and the use of e-commerce, for example. A modernization could incorporate elements of more recent U.S. FTAs, such as digital and services trade and enhanced IPR protection. Many U.S. manufacturers, services providers, and agricultural producers oppose efforts to eliminate NAFTA and ask that the Trump Administration strive to “do no harm” in the negotiations because they have much to lose if the United States pulls out of the agreement. Other groups contend that NAFTA should be rewritten to include stronger and more enforceable labor protections, provisions on currency manipulation, and stricter rules of origin

The Green Economy and Job Creation: Inclusion of People with Disabilities

The percentage of total employment associated with green goods and services has increased in the United States over the past several years, presenting employment opportunities in a number of related emerging fields. As employment options arise to provide green goods and services, people with disabilities should have equitable employment opportunities in this growth sector of the American economy. A focused strategy to train and engage people with disabilities in the green economy can provide a talented and largely untapped segment of the U.S. workforce, a greater opportunity to participate in this growing employment sector than previously realized

Trade Primer: Qs and As on Trade Concepts, Performance, and Policy

[Excerpt] The 112th Congress has a full legislative and oversight agenda on international trade. The agenda may include considering legislation to implement pending free trade agreements with Panama, South Korea, and Colombia, enhanced enforcement of U.S. trade agreements, as well as oversight of the World Trade Organization\u27s Doha Round and trade relations with China. This report provides information and context for many of these topics. It is intended to be read primarily by Members and staff who may be new to trade issues. This report is divided into four sections in a question-and-answer format: trade concepts, U.S. trade performance, formulation of U.S. trade policy, and trade and investment issues. Additional suggested readings are provided in an appendix. The first section on Trade Concepts deals with why countries trade, the consequences of trade expansion, and the relationship between globalization and trade. Key questions address the benefits of specialization in production and trade, efforts by governments to influence a country\u27s comparative advantage, how trade expansion can be costly and disruptive to workers in particular industries and skill categories, and some unique characteristics of trade between developed countries. The second section, on trade performance, focuses on the U.S. trade deficit and its impact on industries. Several questions address the causes of trade deficits, the role of foreign trade barriers, and how the trade deficit can be reduced. In terms of business impacts, the questions focus on which U.S. industries appear to be the most and least competitive, and on the relative size of the manufacturing sector. The third section deals with the roles played by the Executive Branch, Congress, the private sector, and the Judiciary in the formulation of U.S. trade policy. Information on how trade policy functions are organized in Congress and the Executive Branch, as well as the respective roles of individual Members and the President, is provided. The formal and informal roles of the private sector and the involvement of the Judiciary are also covered. The fourth section, on U.S. trade and investment policy, asks questions related to trade negotiations and agreements and to imports, exports, and investments. The justification, types, and consequences of trade liberalization agreements, along with the role of the World Trade Organization, are treated in this section. The costs and benefits of imports, exports, and investments are also discussed, including how the government deals with disruption and injury to workers and companies caused by imports and its efforts to both restrict and promote exports. The motivations and consequences of foreign direct investment flows are also discussed

Job Creation in the Manufacturing Revival

[Excerpt] After rebounding from the 2007-2009 recession, U.S. manufacturing output has grown little since the second half of 2014. Over the same period, employment in the U.S. manufacturing sector has been flat. These trends defy expectations that forces such as higher labor costs in the emerging economies of Asia, heightened concern about the risk of disruptions to long, complex supply chains, and the development of inexpensive domestic supplies of natural gas would bring a surge of factory production in the United States. The health of U.S. manufacturing is a subject of ongoing interest in Congress. Numerous bills are introduced in each session to encourage capital investment, support training of workers for manufacturing jobs, increase research and development related to manufacturing, and strengthen mandates for the use of domestic goods in federally funded projects and programs. Proponents of such efforts often associate increased factory activity with the creation of jobs for workers without higher education. Evidence suggests, however, that even strong growth in manufacturing output could well have only modest impact on job creation, and is unlikely to increase demand for workers with lower levels of education

Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data

[Excerpt] The impact of foreign direct investment on U.S. employment is provoking a national debate. While local communities compete with one another for investment projects, many of the residents of those communities fear losing their jobs as U.S. companies seek out foreign locations and foreign workers to perform work that traditionally has been done in the United States, generally referred to as outsourcing. Some observers suggest that current U.S. experiences with outsourcing are different from those that have preceded them and that this merits legislative actions by Congress to blunt the economic impact of these activities. Other observers argue that investing abroad by U.S. multinational companies impedes the growth of new jobs in the economy and thwarts the nation’s investments in high technology sectors. Some opponents also argue that mid-career workers who lose good-paying manufacturing and service-sector jobs likely will never recover their standard of living. Economists and others generally argue that free and unimpeded international flows of capital have a positive impact on both domestic and foreign economies. Direct investment is unique among international capital flows because it adds permanently to the capital stock and skill set of a nation, but it also challenges the general theory of capital flows because of the presence of strong cross-border and intra-industry investment. Supporters contend that to the extent that foreign investment shifts jobs abroad, it is a minor component of the overall economic picture and that it is offset somewhat by the investment of foreign firms in the U.S. economy (referred to as insourcing), which supports existing jobs and creates new jobs in the economy. Broad, comprehensive data on U.S. multinational companies generally lag behind current events by two years and were not developed to address the issue of jobs outsourcing. Many economists argue, however, that there is little evidence to date to support the notion that the overseas investment activities of U.S. multinational companies play a significant role in the rate at which jobs are created in the U.S. economy. Instead, they argue that the source of job creation in the economy is rooted in the combination of macroeconomic policies the nation has chosen, the rate of productivity growth, and the availability of resources. This report addresses these issues by analyzing the extent of direct investment into and out of the economy, the role such investment plays in U.S. trade, jobs, and production, and the relationship between direct investment and the broader economic changes that are occurring in the U.S. economy. This report will be updated as events warrant

The EU-South Korea Free Trade Agreement and Its Implications for the United States

[Excerpt] On October 6,2010, the 27 member European Union (EU) and South Korea signed a bilateral free trade agreement (FTA). The agreement is expected to go into effect on July 1, 2011, pending approval by the European Parliament and the South Korean National Assembly. If enacted, the South Korea-EU FTA (KOREU FTA) would be the largest FTA in terms of market size that South Korea has entered into. The KOREU FTA reflects the EU and South Korean trade strategies to use FTAs to strengthen economic ties outside their home regions. It also builds upon the surge in trade and investment flows between South Korea and the EU over the past decade. This agreement has possible implications for U.S. trade with South Korea and congressional action on the proposed U.S.-South Korea FTA (KORUS FTA). The proposed KOREU FTA is very comprehensive. It would reduce and eliminate tariffs and other trade barriers in manufactured goods, agricultural products and services and would also cover such trade-related activities as government procurement, intellectual property rights, labor rights and environmental issues. Most studies done on the potential impact of the KOREU FTA estimate that the agreement will have a small but positive effect on the economies of the EU and South Korea as a whole and that the larger relative impact would be on the South Korean economy. The greatest economic impact of the KOREU FTA would be on specific sectors in each economy. EU services providers would be expected to experience gains from the agreement, especially in the areas of retail and wholesale trade, transportation services, financial services, and business services. In terms of trade in goods, EU exporters of pharmaceuticals, auto parts, industrial machinery, electronics parts, and some agricultural goods and processed foods would be expected to gain from the KOREU FTA\u27s implementation. At the same time, South Korean manufacturers of cars, ships, wireless telecommunications devices, chemical products, and imaging equipment would be expected to increase their exports to the EU market. The KOREU FTA is similar to the proposed KORUS FTA in many respects. Both agreements are comprehensive and both would eliminate tariffs on most trade in goods soon after they enter into force. However, they differ in other respects. Phase-out periods for tariffs on some manufactured goods differ. In addition, the KOREU FTA does not cover foreign direct investment. Unlike the KORUS FTA, the KOREU FTA would not allow trade sanctions to be applied where violations of the workers\u27 rights, and environment provisions have been deemed to occur. In addition, the KORUS FTA would cover a broader range of trade in services than would the KOREU FTA. It is not clear whether these differences in the structures of the FTAs would result in appreciable differences in outcomes in terms of economic gains and losses. U.S. and European firms are close competitors in a number of sectors and industries, particularly autos. Some business representatives argue that enactment of the KOREU FTA before enactment of the KORUS FTA would give European competitors commercial first mover advantages, since EU firms, such as those in the auto industry or the services sector, could gain greater market opportunities in South Korea not afforded to US. firms. On the other hand, other factors could also mitigate such advantages. For example, U.S. multinational firms operating in the EU could benefit from the KOREU FTA. Nevertheless, the content and fate of the KOREU FTA could influence the pace and tone of any debate in the United States on the KORUS FTA in the 112th Congress

Public Research Universities: Serving the Public Good

Public research universities educate about 20 percent of all students nationwide; among the nation's research universities, they award 65 percent of all master's degrees and 68 percent of all research doctorate degrees. They enroll 3.8 million students, including almost 900,000 graduate students, annually.1 Public research universities produce researchers, educators, entrepreneurs, civic leaders, and the basic research breakthroughs that drive innovation, grow our economy, and benefit the daily lives of all Americans.2 Between 2012 and 2013 alone, research at public universities resulted in more than 13,322 patent applications, 522 start-up companies, and 3,094 intellectual property licenses.Public research universities also support the upward social mobility of large numbers of talented and ambitious young people from low socioeconomic status backgrounds, many of whom are the first in their family to pursue postsecondary education. Public research universities provide a high-quality university education at reduced cost and act as pathways to higher-paying jobs than would otherwise be obtainable for most students. The sizable enrollment of undergraduate students from low-income families reflects the mission of public research universities to serve all facets of U.S. society; 31 percent of undergraduate students who attend public research universities receive Pell Grants, and the eight research universities with the highest shares of students who receive Pell Grants are all public.But there is growing concern about the future of these vital institutions. Over the last decade, and especially following the economic collapse of 2008, nearly every state in the nation has dramatically reduced its investment in higher education, with public research universities receiving the most severe cuts. Since 2008, public research universities have suffered a 26 percent drop in state investment.5 Further, declining federal funds for research have added to the strain, despite the slight rebound afforded by the 2016 omnibus spending measure. The current funding model is broken and getting worse, putting at risk a critical component of the nation's postsecondary education system and research infrastructure.The American Academy of Arts & Sciences has created the Lincoln Project: Excellence and Access in Public Higher Education to study the importance of public research universities, analyze economic trends affecting their operation, and recommend new strategies to sustain and strengthen these critical institutions. This publication, the fourth in a series of five Lincoln Project reports, examines the many ways in which public research universities contribute to their communities, states, regions, and the nation, and provides empirical evidence of their service to the public good

Caught Between Superpowers:Alaska’s Economic Relationship with China Amidst the New Cold War

In recent years, Alaska has developed an increasingly robust economic relationship with China. China is the largest foreign buyer of Alaskan goods and China continues to invest in Alaska and promote Alaskan tourism. Meanwhile, the U.S. federal government’s relationship with China has deteriorated over concerns that China poses a danger to U.S. national security. As the U.S. federal government continues to scrutinize Chinese investment and trade with the United States, Alaska’s economic relationship with China increasingly hangs in the balance. Alaska’s relationship with China thus joins a long history of economic ties between states and foreign nations that pose conflicts of interest for the U.S. federal government. Beginning with the ratification of the U.S. Constitution and leading up to the present, the states have staked out a role as advocates on behalf of their citizens in promoting economic ties with foreign nations. This Note argues that the anti-commandeering doctrine provides constitutional protection for Alaska’s promotion of its economic relationship with China from interference by the U.S. federal government. While the federal government may itself regulate commerce between Alaska and China, the federal government may not muzzle the Alaska state government and prevent it from promoting commerce with China. While this state of play might seem like a hollow victory for Alaska, the anti-commandeering doctrine requires the federal government to take action itself — rather than coerce Alaska to take action — and thus forces the federal government to expend greater political capital in passing a law or regulation. The anti-commandeering doctrine thus properly apportions political accountability among the state and federal governments and makes federal intervention less likely