Immigrant-owned companies boast a noticeably higher job creation rate than companies owned by native-born Finns, shows a study by the Research Institute of the Finnish Economy (Etla). (Martti Kainulainen – Lehtikuva)

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BUSINESSES owned by immigrants are creating relatively more jobs than businesses owned by native-born Finns, finds a study by the Research Institute of the Finnish Economy (Etla).

Etla on Tuesday pointed out that the impact of immigrant-owned businesses on economic growth is nevertheless not as significant as one could hope for, as many of the jobs they create are low-paid and low-productivity jobs.

Their contribution to economic and productivity growth is limited also for the simple reason that they account only for about a few per cent of all enterprises and one per cent of labour in the business sector in Finland. The average size of an immigrant-owned business was 4.4 employees and the average annual wage cost per employee 36,000 euros in 2016.

Immigrant-owned businesses, however, have a significant role as providers of employment to certain groups of people, acknowledges Etla.

Mika Maliranta, the research director at Etla, on Tuesday stated in a press release that overall immigrant-owned businesses have had a negative impact on productivity growth in Finland.

“They have created relatively many new low-productivity jobs, which has slowed down the productivity growth of the national economy. You should bear in mind, however, that the impact is very limited because immigrant-owned businesses only account for a few per cent of businesses and one per cent of labour in the business sector,” he commented.

The research data dates back to 2016 and comprises almost 90,000 businesses, including almost 4,000 owned by people of immigrant backgrounds.

Etla also reported that the average wage was over 20 per cent lower in immigrant-owned businesses than in those owned by native-born Finns. Although wages in immigrant-owned businesses have been climbing at a faster-than-average clip in recent years, the wage difference has widened further rather than shrinking.

“The reason for the growing wage differences is that immigrants’ businesses are constantly creating new low-paid jobs – either due to the founding of new businesses or old businesses increasing their headcount,” explained Maliranta.

Aleksi Teivainen – HT
Source: Uusi Suomi