LDN - Business

'They're addicted to me': How immigrants keep U.S. heartland cities afloat

[March 05, 2020] By Howard Schneider

ST. LOUIS (Reuters) - One evening last fall, Jawad Rahimi held forth in his downtown bodega as a steady stream of hockey fans en route to a St. Louis Blues game mingled with his neighborhood regulars.

A native of Afghanistan who arrived 16 years ago as a refugee from Azerbaijan, Rahimi has become a fixture in a city center beset with vacant homes and abandoned buildings. A typical day brings a steady flow of customers who come for beer, snacks or just to banter in his St. Louis corner store.

"I think they're addicted to me," he said, nodding to the patrons who traded friendly banter with him as they bought snacks and drinks and lottery tickets.

Indeed, St. Louis - and more than a dozen other cities in heartland states which were as often as not carried by Donald Trump in 2016 when curbing immigration was a central plank of his campaign - is hooked on Rahimi and those like him who are serving as economic props for sometimes troubled urban areas.

A dentist by training, the 46-year-old worked in an embroidery shop as he learned English before opening his store. He is now raising two daughters here.

"St. Louis was a good place to start," he said.

Between 2010 and 2018, if not for the influx of 15,000 foreign-born residents who arrived here, St. Louis's chronic population shrinkage would have been more than double the 10,000 recorded in that span.

Moreover, a Reuters analysis of census data covering that period shows immigration reversed what would have been outright population declines in 18 cities, including Detroit, Milwaukee and Akron, Ohio, rust belt manufacturing towns in swing states where the 2020 presidential election will be decided.

In St. Louis and elsewhere, immigrants are helping arrest population decline in urban areas caught on the losing end of an internal U.S. trend. Increasingly, people and jobs are concentrating in a few dozen high-performing metropolitan areas, leaving others struggling to maintain population, economic growth rates, or both.

Nationally, the United States recorded its lowest immigration level since the great financial crisis in 2018 as Trump made slowing immigration a top priority - at one point declaring the country "full." At 202,000, the increase in foreign-born residents in 2018 was about a third of the average since 2010.

(GRAPHIC: Slowing population growth and a slower economy - https://fingfx.thomsonreuters.com/
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To officials in this Midwestern town, that poses a challenge: where to find the bodies needed to fill those empty homes, start businesses and keep the population from shrinking even faster?

For Betsy Cohen, the answer is simple: More Jawad Rahimis.

"When those numbers fall, it is hard to have the growth in the region we want," said Cohen, executive director of the St. Louis Mosaic Project, whose aim is to make St. Louis's immigrant population the fastest growing in the country.

"Every person counts," Cohen said. "All skill lines. All families. We need people."

PUSHING BACK

If the immigration debate nationally focuses on visceral issues like border security and family separation, cities like St. Louis are pursuing a different narrative - of immigration as needed to stabilize often struggling local economies and downtowns.

After Trump gave governors the right to reject refugees, only one state, Texas, did so. The issue is tied up in court, but many Republican state leaders have rendered it moot by saying they would still welcome refugees.

In a January letter to the State Department, Missouri Governor Mike Parson said the new arrivals would inevitably become "patriotic and productive fellow Americans."

Pittsburgh, Buffalo and a host of other places, largely in the northeast and industrial Midwest, have also relied on immigrants to ease their overall population loss, and the economic drag that goes with it.

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Jawad Rahimi poses at his convenience store in St Louis, Missouri, U.S October 2, 2019. REUTERS/Howard Schneider

At its root, annual expansion in an area's gross domestic product is based on the number of people working and how productive they are. Productivity growth has been disappointing since the 1990s.

Though the U.S. unemployment rate is low and many previously sidelined adults have started working again, underlying growth in the labor force has averaged below 1% annually since the 2007 to 2009 financial crisis. It is being pinched at both ends, with the population aging, and overall fertility rates well below the replacement level.

At the same time, the country's economic geography features a widening divide between places that are adding disproportionate numbers of people and jobs, and those that see their college graduates and mid-career professionals leave town.

It can become self-reinforcing, economists Adam Ozimek, Kenan Fikri, and John Lettieri wrote in a report last year for the Economic Innovation Group. Smaller populations leave a smaller tax base, leading to a decline in services and real estate values, fewer business starts - and fewer reasons to stay.

The one factor that's somewhat controllable is immigration, the organization noted, suggesting that like Australia and Canada the United States could expand immigration with visas targeted "to places confronting chronic population stagnation or loss as a means of boosting economic dynamism and fiscal stability."

BETTER AT THEIR STORY

There has been a push in the Midwest in particular to acknowledge regional population decline as relevant to the national immigration debate.

In a 2017 report, the Chicago Council on Global Affairs noted the "extreme native population loss" in Midwestern cities of people aged 35-44, a group entering their prime earning years. The 1.4 million person decline in that group between 2000 and 2015 represented a fall of 24%, eased at least somewhat by the arrival of 313,000 foreign-born residents of that age.

The 12-state region from the Dakotas to Missouri and Ohio, "is home to dozens of metropolitan areas that have come to be increasingly defined by immigration and rely on immigration as a source of population stability... The foreign-born now play a critical role in offsetting regional workforce gaps."

In Chicago's Pilsen neighborhood, the dynamic is on display. Initially the home of Czech and other eastern European immigrants whose churches still spire over local homes and shops, the area was in decline during the 1970s and 80s. The people who stayed were the Latino immigrants who have anchored a neighborhood revival.

Marcos Carbajal, 36, left a career with Northern Trust Bank to put his MBA from Northwestern University's Kellogg School of Management to what he feels will be better use - building his dad's Michoacan-style barbecue stand, Carnitas Uruapan, from a 45-year-old neighborhood staple into a recognizable citywide brand, and possibly beyond.

"The first generation struggles to move up and traditionally the second generation has better access to education, a better job... better positioning," he said.

The family has kept the building on Chicago's W. 18th Street occupied and on the tax rolls since the 1970s, and with 38 employees, a second location now open, and a third "in our sights," Carbajal said their footprint and economic impact, is expanding. "The food has not changed, the recipe has not changed but we are getting better at telling our story.”

(Reporting by Howard Schneider; Editing by Dan Burns and Edward Tobin)

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