Primary degree share by nativity —workers with a bachelor’s degree or more education. 2009-2012
Native-Born
Foreign-Born
n STEM
13.2%
16.9%
28%
n HUMANITIES
5.6%
45.5%
5.0%
12.2%
n EDUCATION
n BUSINESS & ICON
6.4%
n SOCIAL SCIENCE
9.5%
24.3%
24.2%
n OTHER
9.2%
Source: American Community Survey
Continued from page 125
The graph on page 121 shows that foreign-born workers
tend to cluster in high and low education groups. However,
considering that the EB-5 program is a self-selection of
wealthy families, it is practically guaranteed that most of EB-5
immigrants will lie in the right half of the graph. Furthermore,
considering the fact that many of these immigrants are wealthy
due mainly to their entrepreneurial spirit, there is an exponential increase in the innovative effect on the economies where
these immigrants finally reside. These families have also been
shown to focus their educational efforts on the STEM fields
currently being promoted by the United States government as
is shown by the pie charts above.
Impact of EB-5 Immigrants’
Household Spending:
An often overlooked aspect of EB-5 immigration is the effect
of investors’ household acquisition and spending as they settle
into the United States. For example, 80 percent of investors
in a sample partnership reported having a net worth above
$1 million which implies that their spending will be greatly
significant to the economies in which they settle.
To find out how large that impact is, two parameters
are vital, their yearly average income and their household
spending patterns. “Accredited investors” are defined as: “a
natural person with income exceeding $200,000 in each of the
two most recent years or joint income with a spouse exceeding
$300,000 for those years” (Rule 501 of Regulation D). Most
126
studies use this rule to input a $300,000 average income into
their models. To be conservative, this article does away with
this assumption and uses the average income as declared from
a sample of investors into a selected EB-5 partnership as an
income input. The average yearly income for a sample EB-5
partnership investor is therefore $173,310.
For the high income household spending patterns, the US
department of labor statistics consumer expenditure survey
data is used to create a spending structure for the average
wealthy family (over $90,000 a year). The data used is
summarized in the table below.
Extracting proportionately the spending patterns and
applying them to an average EB-5 investor’s income in an
IMPLAN impact model reveals the impacts of economic
activity on the U.S. economy. Each investor’s household
spending therefore supports 1.5 American jobs and contribute
$227,037 and $47,122 to the Gross Domestic Product and
taxes respectively. As of the end of fiscal year 2015, there were
17,367 I-526 petitions awaiting adjudication, and it has been
suggested that the number increased to over 21,000 during
the first quarter of fiscal year 2016. These seventeen thousand
families are awaiting adjudication and the opportunity to
come to the United States and impact the economy through
their household expenditures. These 17,367 families will be
the cause for the creation of more than 27,000 American jobs
and add over four billion dollars to the economy just from
their yearly household expenditures.
EB5 INVESTORS MAGAZINE