1. WEDNESDAY, OCTOBER 3, 2012 KLMNO EZ SU Economy & Business A15
Decline in immigrant businesses fuels concerns
Economic recovery in
U.S. could pay the price
for today’s visa rules
Obama’s economic team, Version 2.0
What the president’s
lineup might look like
if he wins reelection
BY J.D. HARRISON
The once steady rise in immi-
grant entrepreneurship has
stalled in the United States,
threatening to further slow an
already sluggish economic recov-
ery.
Over the past six years, the
proportion of new companies
founded by foreign-born individ-
uals has slipped to 24.3 percent
from 25.3 percent, according to a
Kauffman Foundation survey
published Tuesday. This updated
previous studies showing a boom
in immigrant entrepreneurship
over previous decades.
The group’s researchers now
wonder whether “the period of
unprecedented expansion of im-
migrant-led entrepreneurship
that characterized the 1980s and
1990s has come to a close.”
The drop is even more pro-
nounced in the nation’s preemi-
nent start-up community, Silicon
Valley, where the number of new
firms with at least one immigrant
founder dropped to 43.9 percent
from 52.4 percent in 2005.
“I knew the numbers were
slowing, but that was shocking,
andthat’swhenIrealizedthiswas
worse than we thought,” Vivek
Wadhwa, director of research at
the Center for Entrepreneurship
and Research Commercialization
at Duke University’s Pratt School
of Engineering, said in an inter-
view about the study, which com-
piled data from 1,882 firms na-
tionally that were started in the
past six years. (Wadhwa writes a
columnforTheWashingtonPost.)
The growing consensus among
economists is that young busi-
nesses — rather than small busi-
nesses in general — represent the
most reliable, consistent source
of job creation, and foreign-born
entrepreneurs have long been at
the helm of many of those firms.
In December, the National Foun-
dation for American Policy re-
leased a study showing that near-
ly half of the country’s top ven-
ture-backed, early-stage compa-
nies were founded by at least one
immigrant.
Expanded to include fast-
growing start-ups with immi-
grants in upper-management po-
sitions, the number leaps to
74 percent.
But increasingly strict immi-
gration laws are making it more
difficult for those immigrants to
start their enterprises in the Unit-
ed States, prompting a “reverse
brain drain,” according to the re-
searchers behind the Kauffman
study. Of particular concern is the
growing number of foreign-born
students who earn advanced de-
grees at U.S. universities but after
graduating are forced to return
home, where some create firms
that compete against American
companies.
Last month, 165 university
presidents and chancellors sent a
letter to Congress and President
Obama urging them to support
visa changes that would allow
foreign-born students who earn
advanced degrees to stay in the
United States and work or start
companies here. The current im-
migration system, they said, pos-
es “a critical threat to America’s
preeminence as a global center of
innovation and prosperity.”
Lawmakers have already pro-
posed several remedies over the
pastyear—mostrecently,Startup
Act 2.0, which would create a new
visa category for immigrants who
start companies and hire workers
in the United States. The bill
would also provide green cards
forstudentswhoreceivegraduate
degreesinmathandsciencefields
from U.S. colleges. But the meas-
ure has been stalled by a bitter
partisan divide over broader im-
migration changes.
“Both sides support these tar-
geted changes, but Democrats
want comprehensive immigra-
tion reform, and they’re con-
cerned that, if this is taken care of,
the urgency around immigration
reform won’t be there anymore
and they won’t be able to resolve
the larger amnesty issue,” Wadh-
wa said. “So you have the all-or-
nothing strategy versus the all-
the-job-creators-we-can-get
strategy. That’s what it boils down
to right now.”
Should lawmakers not address
the country’s immigration issues,
the economic road to recovery
may get significantly longer,
Wadhwa warned, and the United
States will likely struggle to main-
tain competitiveness in global
markets.
“If we wait five years to fix the
immigration system, the undocu-
mented, illegal workers will still
be here, but the high-skilled im-
migrants will be long gone,” he
said. “They’ll be back home build-
ing the next Googles and Intels in
other countries, and we will wake
up five years from now and won-
der how we let this happen.”
harrisonj@washpost.com
Twitter: @jd_harrison and
@onsmallbiz.
BY NEIL IRWIN
In the high campaign season,
the clash between President
Obama and Mitt Romney de-
mands most of the attention of
the two rivals and their aides:
how to attack, when to parry and
so on. There is not much time on
the trail for them to consider the
gory details of how they might
govern, in a second term for
Obama or a first for Romney.
But come Jan. 20, somebody
will govern, and he will confront
an economy that remains stuck in
high unemployment and slow
growth, as well as enormous
budget deficits and a polarized
political environment that makes
addressing either a difficult task.
Based on conversations with
economic policy veterans allied
with each party, here is a run-
down of how the president could
build his economic team as he
picks his Treasury secretary and
White House advisers, with the
Romney version to come Thurs-
day.
Timothy F. Geithner has made
no secret of his intention to step
down as Treasury secretary at the
end of Obama’s first term, leaving
open the administration’s senior-
most economic policy job. When
Geithner came into office in 2009,
job No. 1 was rescuing the nation’s
financial system. In 2013, the
Treasury secretary faces the chal-
lenge of helping to manage high-
stakes negotiations over U.S. fiscal
policy. Obama, his aides have said,
hopes to leave office with a longer-
term deficit reduction deal in
place.
Two veterans of fiscal policy
battles would have an edge in
considerations for the big office
at 1500 Pennsylvania Ave.: White
House Chief of Staff Jacob Lew
and fiscal commission co-chair-
man Erskine B. Bowles, who was
a chief of staff in the Clinton
administration. Both know the
budget backward and forward
and have long experience in the
trenches negotiating with con-
gressional Republicans.
Lew is a favorite of many
inside the White House and is
viewed as an effective chief of
staff. But in moving next door to
the Treasury Department, Lew
would leave Obama with another
major job to fill.
Bowles has shown more inde-
pendence from the president and
less willingness to toe the Demo-
cratic Party line while leading the
Simpson-Bowles commission.
But he would also add to the
president’s credibility as a deficit
hawk in negotiations over a long-
term budget deal.
Other names that could show
up on the list include outsiders,
such as Wall Street titans Larry
Fink and Roger Altman, and ad-
ministration insiders, such as
Gene B. Sperling of the National
Economic Council, Deputy Treas-
ury Secretary Neal S. Wolin and
Lael Brainard, undersecretary
for international affairs.
Other changes to the economic
team would probably be less dra-
matic than they would be under a
Romney administration, but
there is sure to be some shuffling
around as some officials return to
the private sector or seek new
jobs within the government.
Michael Froman, the White
House adviser for international
economic matters, is a strong
candidate to replace Ron Kirk as
U.S. trade representative.
Sperling, who was also NEC
director during the Clinton ad-
ministration, seems inclined to
stay around a bit longer, even
without a promotion. But at some
point there might be a vacancy in
that crucial job of coordinating
the administration’s economic
policy. If Sperling took that job, it
would offer a chance for one of
his deputies, such as Jason Fur-
man, to succeed him as NEC
chief.
Jeffrey Zients has won strong
reviews for his performance as
acting director of the Office of
Management and Budget, despite
having relatively little experience
with the federal budget. Coming
from a corporate background —
as chief executive of the Advisory
Board Co. — Zients worked on the
management side of the OMB
before serving as acting budget
chief. With his business-heavy
résumé, he could be tapped for
commerce secretary and serve as
the administration’s liaison to the
corporate world, working to
patch up Obama’s strained rela-
tionship with business.
Lew and Bowles are most
experienced with domestic fiscal
matters. If either is named Treas-
ury secretary, he might consider a
deputy with a strong background
in international affairs. Brainard,
Geithner’s point person on the
euro-zone crisis, the United
States’ economic relationship
with China and other delicate
tasks of financial diplomacy,
would offer that experience.
If she took that job, Brainard
could be in line to take Treasury’s
top job late in Obama’s second
term or in a future Democratic
administration, as Larry H. Sum-
mers did after serving as deputy
secretary under Robert Rubin.
But there’s also a chance she
could move to the White House,
perhaps to succeed Sperling at
the NEC.
Mary Miller, the Treasury un-
dersecretary for domestic fi-
nance, could emerge as a candi-
date for any of several financial
regulatory jobs, such as a post on
the Commodity Futures Trading
Commission or as one of the bank
regulators.
irwinn@washpost.com
The growing burden on caregivers
Once again, my
husband and I
have joined the
millions in this
country providing
care for an elderly
relative.
A few years
ago, we cared for
my husband’s
father. But he
insisted on
returning to his home. The
situation worked for a while.
Then it became clear that my
father-in-law would need to
move back in with us.
There is joy in caregiving. Yet
it’s also a tough job, and it can
bring on lots of stress, anxiety
and a strain on your finances.
And in our country’s never-
ending battle to contain health-
care costs, caregivers are
increasingly performing tasks
usually left to trained medical
staffs.
Patients who are discharged
from the hospital or return
home after same-day medical
procedures often require a lot of
medical attention. When that
patient is elderly with chronic
physical and cognitive
conditions, many of those
medical duties may fall to a
member of the family.
A report from AARP’s Public
Policy Institute and the United
Hospital Fund, a nonprofit
research organization, confirms
what many caregivers have
known for years — that they are
doing far more than helping
with daily living tasks such as
bathing, dressing, eating,
shopping and/or managing the
finances of elderly parents or
relatives.
“At a time when federal and
state health policy is driving
changes to reduce
hospitalizations and nursing
home admissions, it is critical to
consider who will care for
people with multiple chronic
conditions who need substantial
help with tasks that are often
considered ‘nursing’ or ‘medical’
care,” the report’s authors wrote.
“The default is the family, ready
or not.”
There are more than
42 million unpaid family
caregivers in the United States,
according to the report, “Home
Alone: Family Caregivers
Providing Complex Chronic
Care.” Almost half of family
caregivers performed medical or
nursing tasks that included
managing multiple medications,
helping with devices for
mobility, preparing food for
special diets, caring for wounds,
administering IVs and
injections, using monitors,
managing incontinence and
operating specialized medical
equipment.
The report was based on a
national survey of 1,677 family
caregivers. Many respondents
reported having to administer
five to nine prescription
medications a day. Forty percent
of those surveyed said they felt
stressed and worried about
making a mistake. At one point,
to manage all the medication my
father-in-law had to take, my
husband created a spreadsheet,
which included dosage details —
how many times a day, how
much — and what the drug does.
Although the report was
aimed at professionals in the
elder-care field and
policymakers, it’s an important
validation for caregivers’
expanded responsibilities and
shows that they need more
training.
“It really calls for far more
systematic and sustained efforts
to help family caregivers
perform tasks that 20 years ago
would have been done in
hospitals,” said Carol Levine,
director of the Families and
Health Care Project for the
United Hospital Fund. “Having
been there myself, often the
tasks are presented to you as
‘This is what you need to do’
rather than ‘Are you able to do
this or willing to do this?’”
So what do you do if you are a
caregiver facing more medical or
medication responsibilities than
you think you can handle?
Ask for help.
“Find out what types of help
are available,” Levine said.
“What you also need to do is be
realistic about what you can and
can’t do.”
In our case, we hired
professional long-term care
assistants to help with my
father-in-law, who requires a
great deal of care and
monitoring for his diabetes.
If your elderly relative is
being discharged from a medical
facility and you aren’t
comfortable administering
medication or handling medical
equipment, let the medical team
know. You might get pushback,
Levine said, but press anyway.
“While loved ones are in the
hospital, you aren’t allowed to
touch pills or run machines,
and then when they are ready to
go home, you get a quick
tutorial,” Levine said. “In the
hospital, there is always
somebody to call — an aide,
nurse or doctor. When you are
home, you are really all alone. I
don’t think professionals
understand that.”
If you’re a caregiver looking
for help, go to www.aarp.org/
home­family/caregiving. Read
the article by Levine on whether
you are suited for the medical
jobs of family caregiving. You
can also find resources at
www.nextstepincare.org.
Family caregivers are crucial
in the mission to lower health-
care costs. But if we don’t take
care to make sure they are
supported and trained for all the
care they have to give, this
mission will fail.
Readers can write to Michelle
Singletary at The Washington Post,
1150 15th St. NW, Washington, D.C.
20071, or singletarym@
washpost.com. Personal responses
may not be possible, and comments
or questions may be used in a future
column, with the writer’s name,
unless otherwise requested. To read
previous Color of Money columns, go
to postbusiness.com.
Michelle
Singletary
THE COLOR
OF MONEY
Timothy F. Geithner has
made no secret of his
intention to step down
as Treasury secretary.
Holiday forecast
less merry for retail
Group expects slower
sales growth than in
past two seasons
BY ANNE D'INNOCENZIO
new york — Americans are ex-
pectedtospendmoreduringwhat
is traditionally the busiest shop-
ping season of the year, but they
are not exactly as ready to shop till
they drop as they have been in the
past two years.
TheNationalRetailFederation,
the nation’s largest retail trade
group, said Tuesdaythatitexpects
sales during the winter holiday
shoppingperiodinNovemberand
December to rise 4.1 percent this
year. That is more than a percent-
agepointlowerthanthegrowthin
each of the past two years and
would be the smallest increase
since 2009, when sales were up
just 0.3 percent.
The projections are an impor-
tant indicator for retailers that
depend on the last two months of
the year for up to 40 percent of
their annual sales. But the esti-
mates also offer valuable insight
for economists who closely watch
consumer spending, which ac-
counts for up to 70 percent of
economic activity.
The holiday shopping season is
one gauge of not only the shop-
ping habits but also the mind-set
of the average American during
what has turned out to be a slow
and uneven economic recovery.
People are feeling better about
rising home prices and a rebound-
ingstockmarket,butjobgrowthis
still weak and prices for things
such as food and gas are higher.
“Inalltheyears,thisisthemost
challenging year doing a forecast,”
said Matthew Shay, president and
chief executive of the National Re-
tail Federation, based in Washing-
ton. “There are so many uncer-
tainties.”
No one’s feeling those uncer-
tainties more than U.S. shoppers.
Darlene Johnson of Silver Spring
said her outlook has improved in
the past few months. The value of
her 401(k) retirement plan has
risen. Home sales where she lives
are up again, and her neighbors
are getting higher prices for their
houses.
Still,Johnson,who’sbeengrap-
pling with higher food and gas
prices, says the economy is still
not stable enough for her to
splurge during this holiday shop-
ping season.
Last year, she overindulged and
spent about $5,000, she said. It
took until this past May to pay
down her credit card debt. As a
result, this year she plans to cut
her holiday spending to $1,500.
“I felt too much pressure finan-
cially,” said Johnson, who works
for the National Institutes of
Health. “I am not going to do it to
myself again.”
It’s Americans’ worries about
the economic uncertainty that led
the National Retail Federation to
predict slower growth during the
winter holiday shopping season
thantheincreasesof5.6percentin
2010 and 5.5 percent in 2011.
The federation’s forecast is more
optimistic than that of the Interna-
tionalCouncilofShoppingCenters,
a mall trade group that last week
said it predicts a 2.9 percent in-
crease. It’s also higher than the
3.3 percent growth estimated last
month by ShopperTrak, a Chicago-
basedanalyzerofretailfoottraffic.
The forecasts come as retailers
wrap up what is expected to be a
strong back-to-school shopping
season.Therehavebeennoofficial
numbers out on sales for that
shopping period, which is typical-
ly the second-biggest shopping
seasonoftheyearandabarometer
for what people are willing to
spend during the winter holidays.
But Ken Perkins, president of Re-
tailMetrics, said he expects rev-
enue at stores open at least a year
to be up 5 percent for the com-
bined August and September
months.
For their part, retailers already
arebeingcautious.JohnChalleng-
er, chief executive of Challenger,
Gray & Christmas, says retailers
are expected to increase holiday
hiring by 6 percent to about
700,000 for the October-through-
December period compared with
a year ago, when that figure was
660,200. The National Retail Fed-
eration predicts that merchants
will hire between 585,000 and
625,000 seasonal workers for the
holidays. That is in line with last
year’s 607,000, according to the
trade group’s measure.
Retailers are already starting to
offer enticements to lure holiday
shoppers. Kmart, Toys R Us and
Wal-Mart Stores announced last
month that they are either lower-
ingorwaivingtheupfrontservices
fees for their interest-free pay-
over-time program. All three said
the moves were in response to
complaints from shoppers.
— Associated Press
MATT MCCLAIN FOR THE WASHINGTON POST
Black Friday
shoppers
crowd a
Fairfax Best
Buy last year.
The National
Retail
Federation
said it expects
holiday sales
to rise
4.1 percent
this year,
after rising
5.5 percent in
2011.