Businesses Need More Immigrants

A prior post discussed U.S. farmers’ need for more immigration. Businesses too are recognizing that same need. One example is in Texas.[1]

In late February over 50 Texas companies and chambers of commerce formed the Texans for Economic Growth Coalition, which is “dedicated to recognizing and supporting the positive impact immigrants have on the Texas economy as business owners, taxpayers, and consumers.”

This Coalition immediately partnered with the Texas Business Immigration Coalition and the Texas Business Leadership Council to release the Texas Compact on Immigration, that stated, “”We are committed to promoting common-sense immigration reforms that strengthen our economy and attract talent and business to our state.”  One of their goals is “to head off bills that would punish immigrants and hurt the economy. . . . Another goal is to make a persuasive case on the economic value of immigration.”

Another bipartisan national pro-immigration group, New American Economy, which was founded by Michael Bloomberg, voiced its support of the Texas coalition, saying that the Compact was voicing “why immigrant-friendly policies will help ensure the ongoing vitality of Texas’ economy.”

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[1]  Texans for Economic Growth; Texas Compact on Immigration; Schnurman, Why Texas businesses are fighting for more immigrants, StarTribune p. K1 (Mar. 24, 2019); New Business Coalition, Texans for Economic Growth, and Texas Immigration Coalition Launch Texas Compact on Immigration, New American Economy (Feb. 26, 2019).

 

 

 

“America’s Farms Need Immigrants”   

This is the title of a letter to the Editor of the New York Times from an Illinois farmer. He says, “Rural farming areas need people. We need farm workers to bring their families and fill our schools and places of worship. We need people not just to work but also to support our small-town economies, attend our events and make themselves at home.” [1]

He adds, “Anti-immigration policy is devastating to America’s small towns. Fear of ‘the other’ is killing us.”

His comments were prompted by a Times article describing the same phenomenon for small dairy farmers in upstate New York.[2]

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[1]  Morse, America’s Farms Need Immigrants, N.Y. Times (Mar. 21, 2019).

[2] Goldbaum, Trump Crackdown Unnerves Immigrants, and the Farmers Who Rely on Them, N.Y. Times (Mar. 18, 2019).  See also the posts listed in  “U.S. Population & Immigration“ section of List of Posts to dwkcommentaries—Topical: United States (POLITICS).

 

 

 

Cuba’s Success and Problems with an Aging, Declining Population

One of the successes of the Cuban Revolution has been better health care for average Cubans and thus their increasing life spans. Simultaneously, however, the number of younger Cubans has been declining. The result, Cuba has a declining, aging population that is now the oldest in Latin America,

The average life expectancy for a Cuban man is 76.8 years and 81.3 years for a woman, according to 2018 data from the World Health Organization. To address the challenges of this changing demography, the Cuban government has made the following changes:

  • Several years ago, the Cuban government began to progressively raise its retirement age from 60 to 65 for men and from 55 to 60 for women. It also allowed people to collect their pensions and still work.
  • In December 2018, the government raised the minimum pension from 200 Cuban pesos to 249 Cuban pesos, which amounts to less than $10. Many pensioners complain they are barely getting by.
  • Cuba’s Ministry of Public Health provides funding for Círculos de Abuelos (Grandparents Circles), which provide adult daycare for the elderly with meals, games, conversation and socialization.

On the other hand, Cuba’s low fertility rate and birth rate are seen as markers of low confidence in Cuba’s future. The same is shown by high out-migration of younger Cubans looking for a better life and future prospects in other countries. Nor is Cuba attracting in-migration of younger people from other countries for the same reason.

In short, for this aging U.S. gringo, Cuba needs to adopt policies that give younger Cubans solid reasons to believe that their future on the island will be better. And that is not more of the same.

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Whitefield, ‘Circulos de Abuelos’ serve Cuba’s rapidly aging population—the oldest in the Americas, Miami Herald (Mar. 7, 2019); Cuban Realities Adversely Affecting Normalization with the U.S., dwkcommenaries.com (Nov. 12, 2015).

Raúl Castro’s Celebration of the 60th Anniversary of the Cuban Revolution’s Triumph

On January 1, 2019, the 60st anniversary of the triumph of the Cuban Revolution, Raúl Castro delivered a lengthy address in Santiago de Cuba celebrating that anniversary as well as the 150th anniversary of the beginning of Cuba’s wars of independence from Spain. [1]

Castro said Cuba “will continue to prioritize defense training tasks, at all levels, in the interests of safeguarding independence, territorial integrity, sovereignty and peace, based on the strategic concept of the War of the Entire People, as is reflected in the recently approved Constitution of the Republic.”[2]

Also mentioned were the challenges facing the Cuan economy in 2019. It was necessary to “reduce all non-essential expenses and save more; increase and diversify exports; raise the efficiency of the investment process and enhance the participation of foreign investment, which, as stated in the guiding Party documents, is not a complement, but a fundamental element for development.”

In addition, the speech was peppered with the  following negative comments about the U.S. involvement in that history:

  • “Cuba’s victory against Spain “was usurped by the U.S. intervention and the military occupation of the country, which gave way to a long period of oppression and corrupt governments, subservient to its hegemonic designs.”
  • “The Revolutionaries attack on the Moncada barracks on July 26, 1953 also was an assault on ‘the crimes and abuses of a bloody tyranny, completely subordinated to the interests of the United States.”
  • “Already on January 8, 1959, upon his arrival in Havana, the Commander of the Revolution [Fidel] expressed: ‘The tyranny has been overthrown, the joy is immense and yet there is still much to be done. We do not fool ourselves into believing that from now on everything will be easy, perhaps from now on everything will be more difficult.'”
  • “On May 14, 1959, Cuba adopted the first Agrarian Reform Law “that upset the powerful economic interests of U.S. monopolies and the Creole bourgeoisie, which redoubled the conspiracies against the revolutionary process.”
  • “The nascent Revolution was subjected to all types of aggressions and threats, such as the actions of armed gangs financed by the U.S. government; assassination plans against Fidel and other leaders; the murder of young literacy teachers, many of them still adolescents; sabotage and terrorism throughout the country with the terrible toll of 3,478 dead and 2,099 disabled; the economic, commercial and financial blockade, and other political and diplomatic measures in order to isolate us; the campaigns of lies to defame the Revolution and its leaders; the mercenary invasion at Playa Girón [Bay of Pigs] in April 1961; the October [Missile] Crisis in 1962, when the military invasion of Cuba was being prepared in the United States; and an endless list of hostile acts against our homeland.”
  • “Over 60 years Cuba has has “seen twelve U.S. administrations that have not ceased in the effort to force a regime change in Cuba, one way or another, with varying degrees of aggressiveness.”
  • “Now once again, the U.S. government seems to be taking the course of confrontation with Cuba, and presenting our peaceful and solidary country as a threat to the region. It resorts to the sinister Monroe Doctrine to try to roll back history to the shameful era in which subjugated governments and military dictatorships joined it in isolating Cuba.”
  • “Increasingly, senior officials of the [U.S.] current administration, with the complicity of certain lackeys, disseminate new falsehoods and again try to blame Cuba for all the ills of the region, as if these were not the result of ruthless neoliberal policies that cause poverty, hunger, inequality, organized crime, drug trafficking, political corruption, abuse and deprivation of workers’ rights, displaced people, the eviction of campesinos, the repression of students, and precarious health, education and housing conditions for the vast majority.”
  • “They are the same who declare the intention to continue forcing the deterioration of bilateral relations, and promote new measures of economic, commercial and financial blockade to restrict the performance of the national economy, cause additional constraints on the consumption and welfare of the people, hinder even further foreign trade, and curb the flow of foreign investment. They say they are willing to challenge International Law, to contravene the rules of international trade and economic relations, and aggressively apply extraterritorial measures and laws against the sovereignty of other states.”
  • “The extreme right in Florida . . . has hijacked [U.S.] policy toward Cuba, to the pleasure of the most reactionary forces of the current U.S. government.”
  • “On July 26, [2018] here in Santiago, I explained that an adverse scenario had formed, and again the euphoria of our enemies had resurfaced, and the haste to materialize their dreams of destroying the example of Cuba. I also pointed out the conviction that the imperialist blockade of Venezuela, Nicaragua and our country was tightening. Events have confirmed that assessment.”
  • “After almost a decade of practicing unconventional warfare to prevent the continuity, or impede the return of progressive governments, Washington power circles sponsored coups – first a military coup to overthrow President Zelaya in Honduras, and later they resorted to parliamentary-judicial coups against Lugo in Paraguay, and Dilma Rousseff in Brazil.”
  • The U.S. “promoted rigged and politically motivated judicial proceedings, as well as campaigns of manipulation and discredit against leftist leaders and organizations, making use of monopoly control over mass media.”
  • “The aggressive actions [of the U.S.] against [Venezuela] . . . must cease. As we warned some time ago, the repeated declaration of Venezuela as a threat to the national security of the United States, the open calls for a military coup against its constitutional government, the military training exercises undertaken in the vicinity of Venezuelan borders, as well as tensions and incidents in the area, can only lead to serious instability and unpredictable consequences.”
  • “It is equally dangerous and unacceptable that the United States government unilaterally sanctions and also proclaims the Republic of Nicaragua a threat to its national security. We reject the attempts of the discredited OAS, Organization of American States, to interfere in the affairs of this sister nation.”
  • “Faced with the [U.S. recent reassertion of the] Monroe Doctrine, the principles of the Proclamation of Latin America and the Caribbean as a Zone of Peace, signed in Havana by Heads of State and Government, which some allies of the United States now seek to disregard, must be applied and defended, for the good of all.”[3]
  • “As expressed by our Minister of Economy and Planning at the last session of the National Assembly, the cost to Cuba of [the U.S. blockade of Cuba is]calculated according to internationally approved methodology, [at] 4.321 billion dollars last year, equivalent to almost 12 million in damages every day, a fact that is overlooked by analysts who tend to question national economic performance.”

Nevertheless, Raúl reiterated Cuba’s “willingness to coexist in a civilized manner, despite the differences, in a relationship of peace, respect and mutual benefit with the United States. We have also clearly indicated that Cubans are prepared to resist a confrontational scenario, which we do not want, and we hope that the levelest heads in the U.S. government can avoid.”

American Journalist’s Assessment of Cuba’s Current Situation[4]

Jon Lee Anderson, an American journalist who has written extensively about Cuba, first stated what he saw as Cuba’s achievements over the last 60 years. It is “stable, having overcome such existential threats as the Bay of Pigs invasion in 1961, the Cuban missile crisis in 1962 and a half-century of diplomatic isolation and withering economic sanctions imposed by the United States.”

Cuba also has “weathered the collapse of the Soviet Union, its main Cold War benefactor, and a slew of traumatic internal ructions including the Mariel boatlift in 1980 and the Cuban raft exodus in 1994. Last but not least, Cuba has managed its first major political transitions, following the death in 2016 of its defining leader, Fidel Castro; the presidential retirement, last year, of his younger brother, Raúl Castro; and Raúl’s succession in office by Miguel Díaz-Canel Bermúdez, a 58-year-old Communist Party loyalist.”

Most importantly, he says, “the Cuban Communist system shows no sign of collapse.” But it is going through significant changes with greater opportunity to disagree with the government as evidenced by recent changes to regulations affecting the private sector and the arts.

Conclusion

Although I hope that there will be increasing opportunities for Cubans to express disagreement with their government’s policies, I am not as sanguine as Anderson about whether and when there will significant changes on such questions. Like any well-established and large system or organization, such changes are difficult and usually take longer than anticipated by some.

It also is interesting to compare this lengthy speech by Raúl with the shorter and less revealing recent statement by President Diaz-Canel that was mentioned in a prior post. Is this difference significant?

According to a U.S. journalist, the latest version of the proposed new Constitution, if as anticipated it is approved in the February referendum, provides that “the National Assembly must approve a new electoral law within six months after the new Constitution is enacted. Then, within another three months, the National Assembly must choose a new president, vice president and Council of State from among its deputies currently in office.” In addition, the new Constitution would create the new office of Prime Minister, requiring the president to share power. Therefore, it is possible that Diaz-Canel will be President for only a short time.[5]

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[1] Castro, After 60 years of struggle, sacrifices, efforts and victories, we see a free, independent country, the master of its own destiny (Jan. 2, 2019).

[2] The final draft of the proposed Constitution that will be submitted to a referendum in February 2019 is now available online.

[3] In February 2018, the Monroe Doctrine was favorably mentioned, in response to a question by an academic observer, by then Secretary of State Rex Tillerson, as discussed in an earlier post.

[4]  Anderson,  Cuba’s Next Transformation, N.Y. Times (Jan. 5, 2019).

[5] Gámez Torres, Cuba could have a new government soon if draft Constitution takes effect, Miami Herald (Jan. 5, 2019).

Other Perspectives on Reinvigorating U.S. Rural Areas

A prior post painted a grim picture of the prospects of reinvigorating rural areas in the U.S. Now Ellen Rosen, a free-lance journalist on business and finance, has a more optimistic view in two articles in the New York Times.

Offering More Perks to New Workers[1]

 Starting with the same problem discussed in the earlier post—manufacturers’ difficulty in finding new workers–Rosen illustrates how two companies combat that problem.

Alexandria Industries in Alexandria, Minnesota (a town of 13,000  population in the west central part of the state) offers a free health clinic within a block of its facility and requires employees to work at least eight hours of overtime per month

Wigwam Mills in Sheboygan, Wisconsin (a town of 49,000 population on the west shore of Lake Michigan, 50 miles north of Milwaukee) offers cash bonuses to employees who bring in new recruits who last at least 60 days and provides wi-fi enabled buses for employees in nearby larger cities.

Other incentives elsewhere include:waiver of state taxes to persons who relocate to rural areas for four years; relief from state and local taxes for businesses that relocate to distressed areas for at least four or five years;; assistance to employees on repayment of student loans; payments to people who relocate to a state and who work remotely for a business located elsewhere; and on-site day care.

Economic Factors Affecting businesses in Rural Areas[2]

Cheaper labor is often seen as an advantage for firms in rural areas. But sometimes, rural labor costs are equivalent or higher to induce people to relocate, and labor costs may represent a smaller portion of total costs of manufacturing a product.

Other relative costs of real estate, energy and taxes affect location of a business. Proximity to suppliers or customers may be important, especially for those dealing with perishable products. Costs of transportation and proximity to transportation hubs may be important.

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[1]  Rosen, Manufacturers Increase Efforts to Woo Workers to Rural Areas, N.Y. Times (Aug. 3, 2018).  This article was reprinted in a special “Technology” section of the hard copy of the December 16 Sunday Times.

[2] Rosen, For Manufacturers, a Complex Mix Can Determine Location, N.Y. Times (July 17, 2018). This article was reprinted in a special “Technology” section of the hard copy of the December 16 Sunday Times.

 

 

Major Difficulties in Reinvigorating U.S. Rural Areas

As previously discussed in this blog, most rural areas of the U.S. have aging, declining population. Therefore, this blog has advocated for increasing immigration and having these immigrants settle in the small and medium-size towns in these areas.[1]

However, Eduardo Porter, an economics writer for the New York Times, presents persuasive reasons why  reinvigorating these rural areas has been and will be very difficult.[2]

He starts by pointing out that for the last 25 years the 60 million people now living on farms and in hamlets and small towns have experienced “relentless economic decline” in terms of median income and population along with an increase in median age. Moreover, their share of U.S. population and income are shrinking while crime and opioid abuse are increasing. The result is “intensifying ruralization of distress,” with “distress”  measured “as a combination of data ranging from joblessness and poverty to abandoned homes and educational attainment.” Indeed, he says, “These days, economic growth bypasses rural economies.”

Although many ideas have surfaced on how to address and alleviate these problems, Porter is very doubtful that they will be successful.

The primary reason is “the inescapable reality of agglomeration, one of the most powerful forces shaping the American economy over the last three decades. Innovative companies choose to locate where other successful, innovative companies are. That’s where they can find lots of highly skilled workers. The more densely packed these pools of talent are, the more workers can learn from each other and the more productive they become. This dynamic feeds on itself, drawing more high-tech firms and highly skilled workers to where they already are.”

Therefore, he endorses a suggestion in a Brookings Institution report that any effort to address the problems of rural America should “focus on middle-sized places that are near big tech hubs and have some critical infrastructure, rather than scatter assistance all over the landscape.”

Another suggestion is to help rural residents relocate to prosperous cities and, therefore, focus on developing affordable housing in these cities.

Moreover, not all cities are equal in this regard. A Wall Street Journal article asserts, “Technology is creating an economy in which superstar employees work for superstar firms that gather them into superstar cities, leading to a stark geographic concentration of wealth.[3] The article cites to a study by the Brookings Institution that created an index of every metro area in the U.S.  according to the extent to which their workers use computers in their jobs (their digitalization), Those indices resulted in the following list of superstar cities:

  San Jose-Sunnyvale-Santa Clara, Calif.

  California-Lexington Park, Md.

  Huntsville, Ala.

  Boulder, Colo.

  Durham-Chapel Hill, N.C.

  Trenton, N.J.

 Washington D.C.-Arlington-Alexandria, Va.-Md.-W.Va.

 Boston-Cambridge-Newton, Mass.-N.H.

  Austin-Round Rock, Texas

  San Francisco-Oakland-Hayward, Calif.

  Ann Arbor, Mich.

  Salt Lake City, Utah

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[1] See the posts listed in the “U.S. Population & Immigration”  section in List of Posts to dwkcommentaries—Topical: United States (POLITICS).

[2]  Porter, The Hard Truths of Trying to ‘Save’ the Rural Economy, N.Y. Times (Dec. 14, 2018).

[3] Mims, Where You Should Move to Make the Most Money: America’s Superstar Cities, W.S.J. (Dec. 15, 2018).

State of Minnesota Faces  Increasing Shortage of Workers

Last week had great news for the State of Minnesota. The State government was projected to have a  $1.5 billion surplus in its budget over the next two years [1]

On the other hand, this great news was coupled with a more troubling projection. The tight labor market caused by retiring baby boomers is an immediate problem, and its pinch on growing businesses is only going to get worse.

The report itself put it this way, “The state continues to add jobs at a steady pace, driving the unemployment rate well below the U.S. rate. Together, high demand for labor and low unemployment continue to support growth in total Minnesota wage income and wages per worker. However, as retiring baby boomers dampen growth in the state’s workforce, forecast employment growth is increasingly constrained. This means that more of Minnesota’s growth in total wage income is expected to arise from higher wages per worker, and less from increases in the number of people working.”

“Strong demand for workers,” the report continued, “combined with low unemployment, continues to tighten Minnesota’s labor market. Statewide, there have been fewer unemployed job-seekers than open positions for the past 18 months. Other indicators, such as initial claims for unemployment insurance and temporary help employment, are at levels consistent with a tight labor market. In October, Minnesota’s seasonally adjusted unemployment rate was 2.8 percent, 0.9 percent below the national rate, 0.5 percentage points lower than a year ago, and the lowest unemployment rate the state has seen in more than 18 years.”

According to Walker Orenstein in MINNPost, there are five key facts underlying the projected worker shortage.

  1. There have been fewer unemployed job-seekers than open jobs for the past 18 months.

In October 2018, the state’s unemployment rate was 2.8 percent, which is 0.9 percent lower than the national rate and the lowest for the state in more than 18 years. The rate is still 5.4 percent for black Minnesotans and 5.0 percent for Hispanic residents, but those numbers also have dropped over the last few years.

  1. Job vacancies are up 16 percent compared to last year.

Minnesota has about 142,000 open jobs, a 16 percent jump over the same point in 2017. That’s more job openings compared to fewer than 100,000 unemployed people. The economic forecast report says the industries with the most open jobs are health care, accommodation and food service, retail and manufacturing.

When businesses can’t find people to fill the jobs they have open as baby boomers retire, it hampers their ability to grow and succeed. That crunch is being felt especially hard in the Twin Cities, where there are two job vacancies for every unemployed person, according to the report.

  1. Nearly 70 percent of people age 16 and older are employed.

Minnesota’s 68 percent rate of working people is the highest of any state and 7.4 points higher than the national rate,  This is great news, but  it also illustrates just how few people there are left for businesses to entice into working compared to other states.

  1. Wages are expected to rise as businesses struggle to find workers.

A “moderate acceleration” in salary growth is forecast. The forecasters expect wages to increase at higher rates than the national average during 2019 and 2020, but slow through 2023.

  1. More people are moving in, than out (for once).

From 2016 to 2017, nearly 8,000 more people moved to Minnesota from inside the U.S. than left the state, reversing a 15-year-long trend of negative domestic migration.

While the report warns one year of growth in this statistic doesn’t signal a long-term growth trend, the number of new Minnesotans is good news in an otherwise bleak landscape of worker shortages.

Shortage of Police Recruits[2]

A subset of the overall shortage of new workers is the problem Minnesota police departments are having in “attracting and keeping new police officers.”  For Minneapolis, “officials blamed the shrinking candidate pool on decreasing interest in the profession, lower enrollment and graduation rates from area college law enforcement programs, and ‘internal issues with the application, testing and hiring processes.’”

This also is a problem throughout the U.S. attributable to “low pay, high turnover and unflattering news coverage in the wake of high-profile police shootings.”

The Proposed Solutions to the Worker Shortage

The initial responses to this problem from Minnesota elected officials, in this blogger’s opinion, were meager at best.

Outgoing Speaker of the House Kurt Daudet (Rep.) suggested the state improve at enticing young people into trades and manufacturing — two industries struggling to fill positions. Gov.-elect Tim Walz (DFL) said some school districts lack the money to properly train an adequate workforce thanks to the state’s over-reliance on local property taxes to pay for schools.

So far at least, no public official is advocating for what the state really needs—more immigrants.[3]

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[1]  Minnesota Management & Budget, Budget and Economic Forecast (December 2018); Orenstein, A warning lurks beneath state budget surplus prediction: not enough workers to go around, MINNPost (Dec. 11, 2018); Berkel, Minnesota projects $1.5 billion surplus, StarTribune (Dec. 6, 2018).

[2]  Jany, Minnesota police look to combat crisis of statewide shortage in potential recruits, StarTribune (Dec. 13, 2018).

[3] See posts listed in the “U.S. Population & Immigration” section of List of Posts to dwkcommentaries—Topical—United States  (POLITICS).