More than 1 million people immigrate to the U.S. each year, and tens of millions more who would like to.
These facts are a testament, first and foremost, to the strength and dynamism of the American economy: relative to most of the world, a worker is going to be more valuable in the States.
Immigration, of course, is a hot button issue that gets a lot of Americans riled up, because of the (mostly mistaken) idea that allowing in foreign labor will drive down wages and take jobs away from Americans already living here. But people aren’t the only things that immigrate; money (or capital) does too.
The Brookings Institution released a report Friday morning on that mobile money called “FDI in U.S. Metro Areas.” The FDI in that title stands for foreign direct investment, which is what economists call investments by foreign-owned companies into operations in America. According to the report, this sort of investment supports 5.6 million jobs here in America, or roughly 5% of the total workforce, as of 2011.
So where does the capital that supports so much economic activity emigrate from? Unlike immigrant labor, immigrant capital comes mostly from developed nations in Europe and elsewhere. Here are the top 10 countries supporting jobs here in the U.S (click image to enlarge):
It makes sense that developed nations are the most active exporters of capital, as business leaders in developing countries are focused on the ample growth opportunities they have at home. But as countries like China make the transition from emerging to developed economic status, the U.S. will stand to benefit from Chinese investment as well. According to the report:
FDI from China garners considerable interest even though, in employment terms, Chinese firms (excluding Hong Kong) accounted for only 11,600 U.S. jobs in 2011 by Brookings’ accounting, just 0.2 percent of all jobs in FOEs. This relatively modest number, however, masks rapid growth: From 2007 to 2011, the BEA estimates that employment in the U.S. affiliates of Chinese companies increased by over 800 percent.
Of course, growth of this sort of economic cooperation between China and the U.S. will also probably require greater political trust between the two countries. As it stands now, regulators and government officials are hesitant to allow China to gain a foothold in critical U.S. industries, like banking. That may be changing, however, as the Federal Reserve approved a Chinese-owned bank to set up branches in America in 2012 for the first time. Considering the rapid growth in Chinese investment abroad in recent years, we’d be wise to keep our doors open to immigrant capital as best we can.
