Category: Economics

Will the World’s Population Cease To Expand?  

This blog has published many posts about the U.S. currently experiencing a declining and aging population and seeing one solution in encouraging immigration from other countries that have increasing and younger populations.[1]

This perspective is complicated by some population experts seeing a future peak in world population and a subsequent shrinkage in same without reaching a plateau and stable population.[2]

Dean Spears’ Opinion

Dean Spears (an economist at the Population Research Center at the University of Texas, Austin) asserts that various experts agree that world population soon will peak and then shrink. Here are those experts’ opinions on the timing of such a peak: U.N. demographers, 2080s; Wittgenstein Center for Demography and Global Human Capital, 2070s; Institute for Health Metrics and Evaluation at the University of Washington, 2060s.

The common element in these projections is families having smaller family sizes. The main reason, Spears claims, is “people want smaller families than people did in the past. Humanity is building a better, freer world with more opportunities for everyone, especially for women. That progress deserves everyone’s continued efforts. That progress also means that, for many of us, the desire to build a family can clash with other important goals, including having a career, pursuing projects and maintaining relationships.”

These competing interests could lead to “backsliding on reproductive freedom—by limiting abortion rights, for example. But Spears says, “low birthrates are no reason to reverse progress toward a more free, diverse and equal world.”

Spears concludes this analysis with the following statement: “Humanity needs a compassionate, factual and fair conversation about how to respond to depopulation and how to share the burdens of creating each future generation. The way to have that conversation is to start paying attention now.” (Emphasis added.)

Wall Street Journal’s Perspective

The Wall Street Journal begins its article, “The world is at a startling demographic milestone. Sometime soon, the global fertility rate will drop below the point needed to keep population constant. It may have already happened. Fertility is falling almost everywhere, for women across all levels of income, education and labor-force participation. The falling birthrates come with huge implications for the way people live, how economies grow and the standings of the world’s superpowers.” (Emphasis added.)

“Many government leaders see this as a matter of national urgency. They worry about shrinking workforces, slowing economic growth and underfunded pensions; and the vitality of a society with ever-fewer children. Smaller populations come with diminished global clout, raising questions in the U.S., China and Russia about their long-term standings as superpowers.” (Emphasis added.)

“Some demographers see this as part of a ‘second demographic transition,’ a society wide reorientation toward individualism that puts less emphasis on marriage and parenthood, and makes fewer or no children more acceptable.”

According to Professor Melissa Kearney of the University of Maryland, “state-level differences in parental abortion notification laws, unemployment, Medicaid availability, housing costs, contraceptive usage, religiosity, child-care costs and student debt could explain almost none of the decline. We suspect that this shift reflects broad societal changes that are hard to measure or quantify. . . . If people have a preference for spending time building a career, on leisure, relationships outside the home, that’s more likely to come in conflict with childbearing. Meanwhile, time-use data show that mothers and fathers, especially those that are highly educated, spend more time with their children than in the past. The intensity of parenting is a constraint.”

“With no reversal in birthrates in sight, the attendant economic pressures are intensifying. Since the pandemic, labor shortages have become endemic throughout developed countries. That will only worsen in coming years as the past crisis fall in birthrates yields an ever-shrinking inflow of young workers, placing more strain on healthcare and retirement systems.” (Emphasis added.)

Conclusion

 These articles were the first that this blogger had heard of a projected decline in world population which if and when it happened would have a major impact on many countries and national and international economics and politics. Comments by others on this topic are encouraged.

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[1] See, e.g., the following dwkcommentries.com posts: Naturalized U.S. Citizens: Important Contributors to U.S. Culture and Economy,(June 7, 2015); Iowa State Government Encouraging Refugee and Migrant Resettlement(Feb. 3, 2023); Other States Join Iowa in Encouraging Immigration to Combat Aging, Declining Population (Feb. 22, 2023); Wall Street Journal Editorial: U.S. Needs More Immigrants (July 25, 2023); S. Has Long-Term Labor Crisis (Sept. 26, 2023); Migrants from All Over Flocking to U.S. (Nov. 4, 2023);U.S. States That Could Have the Greatest Benefit from Immigrant Labor (Feb. 28, 2024); Another Documentation of the U.S. Need for Immigrants (April 12, 2024); Negative Impact of Donald Trump’s Proposed Immigration Restrictions (May 15, 2024).

[2] Spears, The World’s Population May Peak in Your Lifetime. What Happens Next?, New York Times (Sept. 18, 2023), Ip & Adamy, Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed, W.S.J. (May 13, 2024).

 

 

Negative Impact on Minnesota of Donald Trump’s Proposed Immigration Restrictions

Candidate Donald Trump’s proposed immigration changes would “send shock waves through [Minnesota’s] economy” according to the StarTribune’s Emma Nelson and Christopher Vondracek. Those changes would bar refugees, carry out mass deportations and limit birthright citizenship. [1] Here are the perceived impact of such proposed changes on the State of Minnesota.

“Minnesota’s unemployment rate is lower than the U.S. as a whole, and employers are struggling to fill nearly 200,000 open jobs. According to the U.S. Chamber of Commerce, Minnesota’s labor shortage is among the country’s more severe, with just 51 workers for every 100 open jobs.”

According the the State’s Demographer, Susan Brower, “there is no other option for growing the workforce other than international immigration or a change in domestic migration patterns, which for 20 years have not worked in the favor of Minnesota. We’d have to see, really, a very drastic change both in domestic migration patterns but also in the level of international immigration to even begin to scratch the surface of meeting the current labor force needs that we have.”

The State currently “is home to about 480,000 foreign-born residents, comprising about 8.5% of the population. . . . Those residents tend to be younger than Minnesota’s native-born population, and most are in their prime working years, filling jobs from agriculture to education to health care. Between 2011 and 2021, immigrants comprised half the state’s labor force growth, though they made up less than 11% of the workforce.”

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[1] Smith & Vondracek, A promised immigration crackdown if Trump wins re-election could cripple Minnesota’s workforce, StarTribune (May 2, 2024).

U.S. Response to Cuban Americans for Normalizing Relations with Cuba

On May 6, the Alliance for Commitment and Respect for Cuba (ACERE), an U.S. organization on behalf of over 200 Cuban-Americans, and 30 Cuban-American organizations and others, sent a letter to the U.S. Department of State with the following request:

  • “[H]elp alleviate the . . .[dire economic crisis] on the island by issuing regulations to support the growth of Cuba’s private sector; rescinding Cuba’s unfounded designation as a state sponsor of terrorism; fully funding and staffing the U.S. Embassy in Havana in order to resume the processing of nonimmigrant visas; and further easing restrictions on travel to facilitate people-to-people exchange and family reunification.”
  • “The signers also urge President Biden to return to a broader path of normalization of U.S.-Cuba relations, which polling indicates enjoys broad support among a vast majority of Cuban-American Democrats in Florida and an overwhelming majority of U.S. citizens.”[1]

The signers of this letter include former federal, state and local officials; academics and university administrators; business owners, executives and investors; lawyers; architects; doctors; scientists; educators; artists, musicians and filmmakers; non-profit administrators; social workers; veterans and other prominent individuals.”

U.S. Response to Letter[2]

On May 9, a State Department official responded to this letter with the following comments:

  • The U.S. welcomes “the opportunity for exchange views with a wide range of civil society groups, including ACERE” and appreciates the work of civil society in achieving the objectives of freedom and democracy for the Cuban people.”
  • “United States policy towards Cuba focuses on supporting the Cuban people, including their human rights, fundamental freedoms, and their political and economic well-being.”
  • The “Administration previously announced a series of measures to support the Cuban people, including the elimination of previous limits on remittances, support for the development of the private sector, easing of travel restrictions and the expansion of consular services in the United States Embassy in Havana.”

Conclusion

As a U.S. citizen and voter without any Cuban genealogical connections, this blogger supports the ACERE request.

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[1] Press Release: Prominent Cuban Americans Call On President Biden To Fulfill His Campaign Promises on Cuba, acere.org (May 6, 2024); Remove Cuba from SST list, claims Cuban Americans, Prensa Latina (May 6, 2024); A group of Cuban Americans asks Biden for a ‘broader path of normalization’ of relations with the regime, Diario de Cuba (May 8, 2024).

[2] The US responds to criticism from ACERE: “the policy towards Cuba focuses on supporting the people, Martinotices.com (May 9, 2024); The US responds to Cuban Americans who demand that Biden ‘normalize’ relations with the regime, Diario de Cuba (May 10, 2024).

No Solutions to Cuba’s Water Crisis 

On a recent national television program, the president of the National Institute of Hydraulic Resources of Cuba (INRH), Antonio Rodríguez Rodríguez, responded to a question from President Diaz-Canel about why 90% of responses in a recent survey said state water services were disastrous.[1]

The response: the water service is “marked by broken equipment, lack of maintenance and spare parts and accessories, that is, the obsolescence of the infrastructure, which prevents establishing an estimated time to resolve the problems, which currently includes the lack of fuel.”

Rodriguez added, “ the responses of the people “coincide with real problems that we have in different places, and affect both the water supply and the solution of leaks or the management of sewage.” This includes “thousands of liters of drinking water are dumped daily as a result of leaks.”

Another point made by Rodriguez was “there are times that we repair [a problem] poorly, that is, we don’t do the job as we have to do it, and we have to go back to the same place once or twice.” This often was due to  “the lack of aggregates and cements.”

The Cuban Citizen Audit Observatory recently reported that despite having extensive reservoir systems, more than 67% of the Cuban population does not receive stable water in their homes” and “almost 2 million Cubans (1,884,000) do not have access to drinking water.”

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[1] There is no solution to the water crisis in Cuba, Diario de Cuba (May 6, 2024).

 

 

 

Minnesota Will Suffer from a Crackdown on U.S. Immigration  

Today “Minnesota is home to about 480,000 foreign-born residents, comprising about 8.5% of the population, according to the state Department of Employment and Economic Development (DEED). Those residents tend to be younger than Minnesota’s native-born population, and most are in their prime working years, filling jobs from agriculture to education to health care. Between 2011 and 2021, immigrants comprised half the state’s labor force growth, though they made up less than 11% of the workforce.”  This includes an estimated 81,000 undocumented residents, 53,000 of whom are civilian workers age 16 or older.[1]

Yet “Minnesota’s [current] unemployment rate is lower than the U.S. as a whole, and employers are struggling to fill nearly 200,000 open jobs. According to the U.S. Chamber of Commerce, Minnesota’s labor shortage is among the country’s more severe, with just 51 workers for every 100 open jobs.”

Minnesota’s need for more workers is especially important in agriculture and health care.

  • The State has rich farmland and relies upon immigrant workforces to tend to livestock or process animals. Many farms hire guest workers through the H-2A visa program, but efforts to increase the number of such visas and to make them available to dairy farm workers have been unsuccessful.
  • Health care’s need for workers has been increasing with :a wave of baby boomer retirements and increasing numbers of older residents needing such care. And foreign-born health-care workers bring an outside perspective that has been shown to improve patient outcomes.

According to Minnesota’s State Demographer Susan Brower, “People don’t understand sometimes that there is no other option for growing the workforce other than international immigration or a change in domestic migration patterns, which for 20 years have not worked in the favor of Minnesota. We’d have to see, really, a very drastic change both in domestic migration patterns but also in the level of international immigration to even begin to scratch the surface of meeting the current labor force needs that we have.”

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[1] Nelson & Vondracek, A promised immigration crackdown if Trump wins re-election could cripple Minnesota workforce, StarTribune (May 2, 2024), This blog has published many posts about the low U.S. fertility rate and the overall U.S. need for more immigration and reforms of our immigration laws. (E.g., U.S. Fertility Rate Falls to Record Low (April 25, 2024) (and prior posts cited in note 2 thereto); More Thoughts on U.S. Low Fertility Rate (May 1, 2024).

Cuba Ranked Last in Press Freedom in Latin America

Reporters without Borders, an international non-governmental and non-profit organization based in Paris, [whose] main objective is to promote and defend freedom of information, ranked Cuba last in the Americas with a score of 168 out of 180. [1] Here is what it said about Cuba:

  • “Year after year, Cuba continues to be the worst country in Latin America in terms of press freedom.”
  • “Media panorama: Television, radio and newspapers are closely monitored by the State, and the private press remains prohibited by the Constitution. The television networks Tele Rebelde and Cubavisión are the most important in the country, while the radio station Radio Reloj is the most listened to. The Granma newspaper is the most widely distributed and is controlled by the State, like the rest of the media. Independent journalists are monitored by agents who try to limit their freedom of movement, make arrests and erase the information they have.”
  • “Political context: Miguel Díaz-Canel, protégé of Raúl Castro, whom he replaced as president of the country in 2019, and later as first secretary of the Communist Party of Cuba, perpetuates the lineage of the Castro family and maintains almost total control of information.”
  • “Legal framework: Bloggers and journalists find a space of freedom on the Internet, access to which is largely controlled by the State, but they do so at their own risk. They are frequently prevented from covering important events, either through detention or house arrest. In 2021, new regulations made the principle of an open, free and inclusive Internet even more utopian, completely violating the right to freedom of expression and information in the digital environment. The new penal code approved in 2022 has reinforced the repertoire of repressive measures in Cuba, through vague terminology (“public disturbances”, “outrage”, “danger to the constitutional order”…) that can easily serve as a pretext for persecute journalists.”
  • “Economic context: Due to the pandemic and the reinforcement of American sanctions, Cuba is going through its worst economic crisis in 30 years, forcing numerous inhabitants to emigrate at any cost.”
  • “Sociocultural context: The protests of the San Isidro movement, in November 2020, and the subsequent mass demonstrations on July 11, 2021, gave rise to a wave of relentless repression, similar to that of the Black Spring of 2003.”
  • “Security: Arrests, arbitrary detentions, threats of imprisonment, persecution and harassment, illegal searches of homes and the confiscation and destruction of material are part of the daily life of journalists who oppose the official Castro line. The authorities also control media coverage by foreign outlets, selectively granting accreditations and expelling those deemed “too negative” toward the regime. “

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[1] Reporters without Borders, America: Political pressures increasingly threaten the independence and safety of journalists (May 2024); Reporters Without Borders places Cuba in 168th place in its global press freedom index, Diario de Cuba (May 3, 2024).

 

U.S. Official Says U.S. Will Not Negotiate Removal of Cuba as State Sponsor of Terrorism    

On April 30, Brian Nichols, the U.S. Undersecretary of State for the Western Hemisphere, conducted a press conference in Miami, Florida.[i]

He said, “The list of countries sponsoring terrorism is not something we can negotiate ; it is a legal process of analysis within various Government departments that finally reaches the Secretary of State for designation. The importance of respecting people’s rights is a different issue.”

He also said that the Biden Administration does not see a fracture in the power leadership of the Cuban regime. “I think instead of speculating after 60 years of that it’s better to focus on the government’s actions.”

On another topic, Nichols mentioned some of the possible Cuban changes that the US and the international community would see as a gesture of goodwill: “They can implement policies that allow more democracy, more freedom of expression. Release the political prisoners they hold, allow peaceful expression and differences with the Government. Allowing broader private economic activities. All of this would be a favorable change for the Cuban people and would be something very welcome by the international community.”

[i] Brian A. Nichols: ‘the removal of Havana from the list of state sponsors of terrorism is not negotiated, Diario de Cuba (May 1, 2024).

More Thoughts on U.S. Low Fertility Rate 

A previous post discussed the issues arising out of the recent record low fertility rate in the U.S.[1] A more recent article added additional thoughts on this development.[2]

First, recent Gallup polling data shows that 45% of respondents said three or more kids was ideal, the highest level since 1971. And American teenage and adult women for decades have desired more kids much higher than the actual fertility rates. That suggests the U.S. should help women achieve the family size they want.

Second, a population that fails to replace itself can face serious challenges. It can lead to stagnant or declining living standards.  It also means fewer workers are available to care for the growing elderly population and pay for its retirement benefits. Already the typical American senior citizen receives more Social Security and Medicare payments than they paid into the system. This problem will worsen as the ratio of retirees to working-age Americans grows.

In fact, this last problem is worse than government numbers suggest because they assume a higher future fertility rate than we have been experiencing.

As a result, the U.S. should adopt policies like mandatory paid maternity leave, lower tax burden for families with young kids, improved access to reproductive care and abortions in emergencies. Of course, increased immigration is another solution.

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[1] U.S. Fertility Rate Falls to Record Low, dwkcommentaries.com (April 25, 2024).

[2] Rampell, Americans are having too few kids. The GOP made the problem worse, Wash. Post (May 1, 2024).

 

Cuban Private Enterprises Offer Opportunities on the Island 

Since 2021, with Cuban government approval,  “roughly 10,200 new Cuban private businesses have opened, creating a dynamic, if fledgling, alternative economy. . . . About 1.5 million people work for private businesses, a 30 percent jump since 2021, and they now represent almost half of the total work force on the Caribbean island” and about 15% of gross domestic production. While “Cubans working for the state, including white-collar professionals, doctors and teachers, make the equivalent of roughly $15 a month in Cuban pesos, . . . employees in the private sector can make five to 10 times that amount.”[1]

Last year, this sector imported roughly $1 billion of goods, mostly from the U.S. and mostly financed by cash remittances sent by Cubans in the U.S. to their relatives back home. “Across Havana, new delis and cafes are appearing, while entire office floors are leasing space to young entrepreneurs bursting with business plans and products, from construction and software to clothes and furniture.”

An example of such businesses is two Home Deli markets in Havana, which offers a mix of locally made items like pasta and ice cream and imported goods like beer and cereals. They are owned by Diana Sainz, who had lived and worked in Europe, but who returned home to Cuba to open and operate these stores.

Another example is a Havana restaurant, La Carreta, that was reopened by a local restaurant owner and Obel Martinez, a Cuban-Amereican interior decorator based in Miami.

The Cuban government, however, could do more to build this sector. Such businesses are limited to 100 employees. Cuba’s state-owned banks do not allow account holders to access deposits in dollars to pay importers because of the government’s lack of foreign currency to pay its own bills. U.S. sanctions also prohibit direct banking between the United States and Cuba. And the Cuban government has kept major industries off limits to private ownership, including mining and tourism.

Benjamin Ziff, the chargé d’affaires who heads the U.S. Embassy in Cuba, observes, “Cuba is falling apart faster than it is being rebuilt. There is no turning back.’’ He wonders “whether the [Cuban] government will allow the private sector “to expand fast enough and freely enough to meet the challenges.”

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[1] Adams, In a Communist Stronghold, Capitalists Become an Economic Lifeline, N.Y. Times (April 29, 3024).

Cubans Have Difficulty Obtaining Pesos  

In recent weeks, ordinary Cubans have begun to form lines outside banks and ATMs in the Cuban capital in search of money to pay for the products or services they use daily.[1]

Omar Everleny Pérez, a Cuban economist and professor at several foreign universities,  listed at least four reasons for the lack of cash in ATMs: a growing fiscal deficit, the nonexistence of bills with a denomination greater than 1,000 Cuban pesos (equivalent to three dollars in the parallel market), high inflation and the non-return of money to the banks.

Perez also says “various private economic actors such as small or medium-sized businessmen who receive that money for transactions, but do not deliver it to the bank out of distrust that they will not be able to withdraw them later or to convert them into dollars as quickly as possible before they depreciate.”

Cuba’s Minister of Economy and Planning, Joaquín Alonso Vázquez, said that for the first quarter of 2024, income from exports decreased, imports also decreased, and different key economic activities are not fulfilled, such as the main agricultural production, sugar and other derivatives, as well as electricity generation.[2]

Another Cuban Minister, Vladimir Regueiro Ale (Finance and Prices), said that the budget deficit stood at 22,822 million pesos. The figure is lower than planned, but around 20% of “this decrease was due to the non-execution of a group of Budget items that have a great impact, especially on social policies.“

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[1] The cash shortage deepens the agony of Cubans in crisis, Diario de Cuba (April 29, 2024).

[2] ‘Unfavorable outlook’: the government falls short in the face of the chaos of the economy in Cuba, Diario de Cuba (April 29, 2024).