Undocumented Entrepreneurs

The number of undocumented business owners is rapidly growing in the United States. For undocumented students, entrepreneurship presents an opportunity to creatively pursue and fulfill career aspirations.

Iliana G. Perez, Director of Research and Entrepreneurship at Immigrants Rising, shares her perspective in her article “Your next boss could be an undocumented immigrant; growing number of business founders lack legal status”  Perez writes:

Undocumented entrepreneurs are a growing demographic. In 2016, there were 770,000 in America. Today, there are more than 815,000, according to research from the bipartisan nonprofit New American Economy. This growth reflects the increasing economic clout that undocumented immigrants in America hold nationwide. 

According to NAE, there are now 1.5 million Latino-immigrant business owners in the U.S., a net increase of 100,000 in the last two years. Today they employ more than a million people. This means that immigrants — many of whom are undocumented — now write paychecks for an increasing number of Americans. 

Undocumented millennials, like our grantees, are driving this trend. For my doctoral work, I analyzed 2015 American Community Survey census data and found nearly a third — approximately 200,565 — of Latino millennial entrepreneurs are undocumented. Their annual business income is $1,300-$1,500 higher on average than naturalized immigrants and American-born millennials. 

As it turns out, entrepreneurship is one of the main ways that undocumented immigrants can thrive in America’s workforce. The federal government doesn’t require undocumented immigrants to have work authorization or a social security number in order to be an independent contractor or start a business. Anyone, regardless of immigration status, can get an Individual Tax ID Number to open bank accounts, build credit, incorporate as a business, provide employee benefits, and pay taxes. 

All of this makes entrepreneurship a more lucrative option for an undocumented person. They can charge higher hourly rates or have large business contracts, compared to working under the table for cash or using fake documentation. All told, undocumented entrepreneurs earned $15.2 billion in business income in 2016. Even more remarkable, in 20 states, they have higher rates of entrepreneurship than naturalized immigrants and native-born Americans. 

What Perez describes speaks to the resiliency, perseverance, and innovation of undocumented individuals who are able to succeed despite many obstacles. The Entrepreneurship Fund, through Immigrant’s Rising has provided funding to many undocumented entrepreneurs who are promoting social change. Over the past several years, they have invested more than $400,000 in 13 new start-ups. While the Entrepreneurship Fund is not currently accepting new applications (stay tuned for a new application cycle), they suggest  Venturize — a free online resource hub for small business owners seeking funding. For individuals looking to get started with entrepreneurship, they suggest visiting the e-learning hub at UndocuHustle.org. Immigrants Rising also offers business consultations with an Entrepreneurship Specialist. So, think about it… what is YOUR business idea?

By Tara Malone
Tara Malone Associate Director, Regional Campuses Tara Malone