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Concern about Trump's immigration policies impacting business fades on Main Street
CNBC
Wed, 14 Aug 2019 14:26

Concern about Trump's immigration policies impacting business fades on Main Street

CNBC
Wed, 14 Aug 2019 14:26

Concern about Trump's immigration policies impacting business fades on Main Street

A U.S. Border Patrol agent takes down personal data from Salvadorian mother Ana Esmeralda and her son Manuel Alexander, 2, after they were taken into custody on July 02, 2019 in Los Ebanos, Texas.

John Moore | Getty Images
In early 2019, with the crisis at the U.S.s southern border reaching a tipping point, immigration surged to become the issue that small business owners said they cared about the most. In the first quarter of this year, more than a quarter of small business owners (27%) named immigration as the top issue, when only a year prior just 11% had said the same.

But those concerns among small business owners do not extend to their work. The percentage of small business owners who expect any effect on their businesses — positive or negative — as a result of changes to immigration policy has barely budged in the past two years. Even when concerns about immigration spiked, about 6 in 10 small business owners said they didnt expect immigration policy to impact their businesses, the same as in previous quarters.
While the crisis at the border continues, the concerns among small business owners already seem to be fading. This quarter the percent naming immigration the top issue is down five percentage points from its peak six months ago.

These data come from the quarterly CNBC/SurveyMonkey Small Business Survey, a regular check-in on the state of small business optimism in the United States. The latest survey was fielded July 29 to Aug. 4 among a sample of nearly 2,300 small business owners.
Majorities of small business owners say that immigration policy has had no impact on their business in the past 12 months (69%) and that they expect immigration policy to have no effect on their business in the next 12 months (61%).

However, among the minority who have been affected by immigration policy thus far, three times as many small business owners say they have been hurt by the U.S.s immigration policy as the number who say theyve been helped (21% vs. 7%). For this small subset, hiring difficulties have only become more problematic thanks to the immigration crisis.
Nearly half of small business owners (46%) who say immigration policy has hurt their business in the last 12 months say theyve hired or attempted to hire new employees in the same time period. Of these small business owners, 52% say U.S. immigration policy has made it more difficult to hire new workers.
For most small business owners, immigration is a political concern rather than a business one, at least for now. For a small minority, though, immigrant workers are helping to close a gap in the labor force that has proved otherwise impossible to fill.
In the fourth quarter of 2018, some small business owners reported taking some unusual steps to attract new employees and retain existing ones. Thanks to the low unemployment rate, demand for workers was then and remains now at a relative high point.

Many small business owners have increased wages, offered on-the-job training or started providing other perks. Some survey respondents wrote in that theyve helped foreign workers secure visas, assisting in whats typically a burdensome and time-consuming process.
Even with the labor market sustaining its hot streak, small businesses are still looking to hire. About 3 in 10 small business owners continue to say that they plan to increase their headcount in the next year, but relatively few are relying on foreign workers to do so. Just 18% of small business owners say its necessary for their business to be able to hire workers from other countries.

Those small businesses tend to be clustered in the south and middle of the country in states with large agriculture sectors, including Mississippi, Iowa and Kansas. In more northern and mountainous regions, about half as many small businesses report relying on foreign workers.
Of course, not all foreign workers want to immigrate to the U.S. Especially in industries with large seasonal variations in employment, including agriculture and hospitality, small businesses are likely looking to hire temporary workers who intend to leave the U.S. after their work is done.

Nevertheless, recent changes to federal immigration policies are making it more difficult to fill positions for a small subset of small business owners. Half of those (50%) who say its necessary for them to hire workers from other countries also say U.S. immigration policy has made it more difficult for them to hire in the last 12 months.

In particular, those looking to hire low-skilled labor may be in the greatest need of hiring immigrant workers. Vox cites the recent Immigrations and Customs Enforcement raids as revealing a fundamental flaw in the immigration system: its preference for high-skilled over low-skilled workers. Current immigration policy in the U.S. makes it difficult for low-skilled workers to come here legally, and the increased threats of deportations and raids are intended to deter anyone from immigrating illegally as well.

For most small business owners, immigration is a political concern rather than a business one, at least for now. For a small minority, though, immigrant workers are helping to close a gap in the labor force that has proved otherwise impossible to fill.

—By Laura Wronski, senior research scientist, SurveyMonkey

The CNBC|SurveyMonkey Small Business Survey for Q3 was conducted across approximately 2,300 small business owners between July 29 and Aug. 4. The survey is conducted quarterly using SurveyMonkeys online platform and based on its survey methodology. SurveyMonkey publishes additional quarterly small business data and analysis.