CNBC | SurveyMonkey Small Business Survey

If DACA killed, the US could lose $433 billion over the next 10 years

DACA supporter, Lauren Gonzales, protests the Trump administrations termination of the Deferred Action for Childhood Arrivals program. Los Angeles, California on September 5, 2017.
Ronen Tivony | NurPhoto | Getty Images
DACA supporter, Lauren Gonzales, protests the Trump administrations termination of the Deferred Action for Childhood Arrivals program. Los Angeles, California on September 5, 2017.

Hopes for President Trump to repeal the Deferred Action for Childhood Arrivals program has diminished dramatically after the White House put out an aggressive list of demands. The Trump administration wants tougher immigration and border security measures, crackdowns on sanctuary cities, green card restrictions and money for a border wall. Now there is a lot of concern over what will happen to the estimated 700,000 people covered by the DACA program. Not only would there be a huge human factor to consider in sending them back to countries with which most aren't familiar, but the cost to our economy could be staggering: According to a Center for American Progress study earlier this year, the estimated loss of DACA workers would reduce U.S. GDP by $433 billion over the next 10 years, with California, Texas and Illinois being hit hardest.

The first-ever CNBC/SurveyMonkey Small Business Survey in June found that 21 percent of small-business owners expect changes in immigration policy to have a negative effect on their businesses. Already many small- and midsize business owners have been peppering HR service-provider companies, like TriNet, with questions about how the DACA rescission will affect some of their employees. (Mark Zuckerberg's pro-immigration reform group, FWD.us, found that 91 percent of DACA recipients are employed.)

The survey findings highlight an important factor being overlooked by policymakers in Washington: the economic contribution made by immigrants.

By their very nature, immigrants are risk-takers, and some of our most successful are foreign-born, like Elon Musk of Tesla (South Africa), Google 's Sergey Brin (Russia) and investor George Soros (Hungary). "Many immigrants start businesses—whether it's high-tech companies like Elon Musk or Main Street businesses—so they're wonderful sources of entrepreneurship," says James Richards, a director of TriNet, which partners with 13,000 small- and medium-sized businesses that collectively have more than 330,000 employees.

Immigrants are almost twice as likely to start businesses in the United States as native-born Americans, research from the Ewing Marion Kauffman Foundation reveals. Many are key job creators, since companies founded by immigrants that are backed by venture capital have created an estimated average of 150 jobs per company and generated $63 billion in sales.

According to a study by the New American Economy, immigrants or their children founded more than 40 percent of the companies on the Fortune 500 list in 2010. In fact, seven of the 10 most valuable brands in the world come from American companies founded by immigrants or their children, including Apple, Google, AT&T, GE, IBM and McDonald's. The group also found that immigrants started 28 percent of all new businesses in the United States in 2011, despite accounting for less than 13 percent of the population, and that they're more than twice as likely to start a business as a native-born American.

The ultimate risk takers

Tutoring franchise CEO Hao Lam from Vietnam and brothers Edi and Etrit Demaj from Kosovo — who launched a number of high-tech real estate enterprises in the Detroit area — did more than just risk their careers to get where they are; they risked their lives.

Brothers Etrit (left) and Edi Demaj escaped wartorn Kosovo in the ‘90s to come to America. Etrit was 16 and Edi 20 when they started their first business, fixing, flipping and renting homes.
Source: Joe Sidote
Brothers Etrit (left) and Edi Demaj escaped wartorn Kosovo in the ‘90s to come to America. Etrit was 16 and Edi 20 when they started their first business, fixing, flipping and renting homes.

Lam and the Demaj brothers are as passionate about what immigrants have to offer America as they are about living in this country, and they think repealing DACA is a huge step backward, even though they all three immigrated here legally and are American citizens.

"It would be a big loss to the country if President Trump were to stop the program," says Lam, 49, the founder and CEO of the Best in Class Education Center franchise, a Seattle-based chain of 50 learning centers in 10 states that employ about 300 people. "Immigrants and refugees here work hard, create jobs. We are so grateful to live in this wonderful country. If we were to deport 700,000 people, it will be very devastating for the economy and to a lot of wonderful families here."

"Many immigrants start businesses— whether it's high-tech companies like Elon Musk or Main Street businesses— so they're wonderful sources of entrepreneurship." -James Richards , Director of product, TriNet

For Edi and Etrit, who were educated at Oakland University in suburban Detroit, the concerns are both micro and macro. "We have friends that moved to the U.S. when they were one or two years old that are now fearing that they're going to be deported — they're more American than we are," says Edi, 31, who is the co-founder and COO of Rocket Fiber, an ultrafast Detroit internet service provider that has generated 70 jobs since its launch two years ago. "This is all they know."

Adds Etrit, 28, who was COO of Detroit-based smart building technology company Hepta Systems before leaving recently to co-found Kodelabs, a software development and real estate technology start-up, with Edi: "From an economic standpoint, immigrants only make this country better, because different minds think differently, and that's what makes this country amazing. When you put a bunch of different people around a table, greatness happens."

Hao Lam is a good example of immigrants making this country better. It took Lam 13 tries before he successfully escaped Vietnam as a 20-year-old in 1988, avoiding death on a couple of occasions, he says. During the weeklong trip aboard a crowded boat to a Philippine refugee camp, he survived on three capfuls of water a day.

"It wasn't enough to wet your lips," he recalls. "Luckily, the fourth or fifth day, there was a big rain and we squeezed the water out of our wet clothes."

Hao Lam is the founder and CEO of the Best in Class Education Center franchise.
Source: Ellis Kao
Hao Lam is the founder and CEO of the Best in Class Education Center franchise.

He spent a year in the refugee camp before immigrating to British Columbia, where an uncle lived and he learned to speak English. After graduating from the University of British Columbia in 1995, he made his way to Seattle, where he soon opened his first Best in Class tutoring center. Lam relied on family to start him off.

"When I first started the business, I borrowed $100,000 from my aunt Lien, who owned a restaurant in Holland," he said. "In the middle of 2012, my sister Kitty rescued me financially when I had to buy out my 50-50 partner and get the franchise up and running. Luckily, I have family members who are wiling to help me when I am in need."

Edi and Etrit survived similar perilous circumstances to come to America. The late '90s ethnic war in Kosovo destroyed everything they had except for their lives, but many friends and family weren't so lucky. "We were fortunate enough to make it out of there alive," says Edi, who spent four days living in a sedan with his family and another family, waiting to cross the border into Macedonia. "It was months and months of going through things nobody should have to go through."

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An uncle in Detroit sponsored their immigration to the United States, where Edi and Etrit hit the ground running. Etrit was 16 and Edi 20 when they started their first business, fixing, flipping and renting homes. A short while later Edi went to work for Dan Gilbert's Bedrock Real Estate Services. Gilbert is the Quicken Loans founder and billionaire who has poured nearly $2 billion of his own money into revitalizing Detroit. Etrit, in the meantime, went into banking at Chase.

According to Edi, the culture within the Quicken Loans family of companies is such that innovation is rewarded, and people that come up with ideas are given a chance.

Edi was working for Gilbert when he and co-founders Marc Hudson and Randy Foster, both software developers for Quicken, came up with the idea of Rocket Fiber, the ultrafast Detroit internet service provider. The co-founders pitched the concept to Gilbert, who embraced the idea and went on to become the main investor in the $30 million they've raised thus far, said Edi.

"Dan got involved in the same way he gets involved with other companies he has invested in. We pitched him a concept that he could invest in, he liked it and believed it is needed and could be a success, and invested in it," Edi said. The co-founder would not disclose revenues except to say it is in the millions and they have thousands of clients on board, both businesses and residential.

"For hundreds of years now, America has been able to attract top talent in the world," said Edi. "The second we lose the ability is the second we start heading downhill. To go back now and do something that is totally the opposite of that makes zero sense. Maybe we're naive, maybe we're too hopeful, or maybe we believe in this country more than anybody else, but America always figures the right thing out in the end."

— By Tom Cunneff, special to CNBC.com