Minnesota’s Challenges of Declining, Aging Population

Minnesota has an aging, declining population coupled with shortages of skilled and other labor, as discussed in prior posts.[1] Here is additional information on that subject along with words about the problems of shortages of medical care in rural parts of the nation and the challenges of having more immigrants.

Skilled Labor Shortages[2]

As of September 30, 2019, “the number of job vacancies in Minnesota continues to climb and is now at the highest total on record — which state officials said continues to be of concern because it could slow economic growth. . . . More than half of the job vacancies were in the seven-county Twin Cities area. . . . While most of the openings statewide are in the health care and social assistance field, nearly 8% are in manufacturing.”

These shortages have led to employers expanding “job candidate lists to include older workers, people with disabilities, people of color and other groups sometimes marginalized from good-paying jobs.”

Other responses to these shortages include employers busing metro-area residents to companies in smaller nearby cities, buying houses to rent to new employees, investing in apartment buildings for renting to the newcomers, engaging in social media campaigns about the companies and their towns, designing high school courses for needed job skills, and sponsoring social activities for newcomers.

Warning signs of a downturn in the U.S. and Minnesota economy, however, threaten this demand for more skilled and other labor. On October 1, a report showed that nationwide factory activity in September fell to the lowest level since 2009, the last month of the Great Recession. As a result, some economists now consider the manufacturing sector to be in a recession. This  follows months of worrying earnings and other economic reports that signaled slowing economies around the world and heightened pressures as U.S. factories scrambled to deal with the shortage of skilled workers and the fallout from a volatile trade war with China.

Creighton University’s Economic Forecasting Group, which measures activity in Minnesota and eight other states including the Dakota, said through its Director, Ernie Goss, “Based on the last two months of surveys of manufacturing supply managers, both the U.S. and Mid-America economies are likely to move even lower in the months ahead.”  The probability of a recession during the first half of 2020 has “risen significantly” over the past few months.

Another expert, Thomas Simons, senior money market economist at Jefferies LLC, said that the Mid-America economy has been expanding in 2019 at a pace well below that of the nation and that  recent reports were “troubling,” “weaker than expected” and dragged down by “non-organic forces” such as the trade war and Boeing’s grounding of its entire fleet of 737 Max Jets. . .  Manufacturing itself is in a recession, but it does not mean that the overall economy is in a recession.” These thoughts were echoed by Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis: “Easily the biggest issue that [manufacturing executives] talk about is trade. . . . The manufacturers are not just worried about the trade war between the Trump administration and China, but also unresolved trade agreements with Canada and Mexico, Germany’s weak economy and unfinished U.S. trade policies that affect Europe’s auto industry.”

Another bit of negative news came on October 1 when the World Trade Organization slashed its forecast for trade growth for this year and next. World trade in merchandise is now expected to expand by only 1.2 percent during 2019, in what would be the weakest year since 2009, when it plunged by nearly 13 percent in the midst of the worst global financial crisis since the Great Depression. The W.T.O. warned that intensifying trade conflicts posed a direct threat to jobs and livelihoods, while discouraging companies from expanding and innovating.

In response to this new negative news, global stock markets declined on October 1 and 2.

Medical Care Shortages [3]

Rural areas in Minnesota and other states also are facing shortages of primary-care physicians and other doctors. “In the medical desert that has become rural America, nothing is more basic or more essential than access to doctors, but they are increasingly difficult to find. The federal government now designates nearly 80 percent of rural America as ‘medically underserved.’ It is home to 20 percent of the U.S. population but fewer than 10 percent of its doctors, and that ratio is worsening each year because of what health experts refer to as “the gray wave.” Rural doctors are three years older than urban doctors on average, with half over 50 and more than a quarter beyond 60. Health officials predict the number of rural doctors will decline by 23 percent over the next decade as the number of urban doctors remains flat.”

One example of this shortage is the State of Texas, where “159 of the state’s 254 counties have no general surgeons, 121 counties have no medical specialists, and 35 counties have no doctors at all. Thirty more counties are each forced to rely on just a single doctor.”

A related problem is the closure of at least 113 rural hospitals in the U.S. since 2010. It, therefore, should not be surprising that “elderly patients are more likely to die when the nearest rural hospital closes and they have to travel farther for treatment of time-sensitive conditions such as heart attacks and strokes, according to a study by a new University of Minnesota health economist.” This study also invalidates  the theory that rural patients might do better after a hospital closes because they would travel farther for higher-quality care.

 Challenges of More Immigrants [4]

The Minnesota city of Worthington has been cited in this blog as an example of a city that has successfully welcomed and integrated immigrants. Its “population has surged from fewer than 10,000 in 1990 to more than 13,000 today and its residents expect it to exceed 14,000 in the near future with immigrants constituting roughly one-third of the population.  And the median age is under 36.”

“Some of the [Worthington] immigrants are entrepreneurs, who described the difficulties they had in getting their businesses started and frustration over lack of stores with their favorite foods and police forces still almost exclusively locally born white people. But they still expressed optimism about their future in this community.”

Worthington had recently been visited by “Neel Kashkari, the president of the Minneapolis Federal Reserve Bank. At a community meeting in the town he said, “If you do the math, there are three choices we have as a society. One choice is just accept slower growth. A second choice is to subsidize [human] fertility. Or number three, you can embrace immigration. Now the advantage we have in the U.S. is that, while we are not perfect, we are better than just about any other country at embracing immigrants and integrating them in our society.”

More recently, the Washington Post published a critical article about this small city as it struggles to meet the educational needs of the children of these immigrants and the costs of doing so.

This article reports that in the past six years, more than 400 unaccompanied minors have been placed in Worthington’s . . .[county]— the second most per capita in the country. . . . Their arrival has helped swell Worthington’s student population by almost one-third, forcing administrators to convert storage space into classrooms and teachers to sprint between periods, book carts in tow.” As a consequence, “the number of ELL [English language learner] students in Worthington has nearly doubled since 2013, to 35 percent of students. In the high school, where most unaccompanied minors are placed, it has almost tripled.”

In response, the Worthington school district has “scrambled to hire Spanish-speaking teachers, who are part educators, part parents, part therapists. Many unaccompanied minors live with unfamiliar relatives who offer little support. Teachers often fill the void, arriving early, staying late, even buying their students groceries.”

To meet this challenge, the school district over the last five years has “asked residents to approve an expansion of its schools to handle the surge in enrollment. Five times, the voters have refused” with another scheduled this Fall. According to this article, “The driving force [in this Trump-supporting county]behind the defeats has been a handful of white farmers,’ who provide a major portion of its tax base. One activist said, ““White people here don’t want to pay for people of color and undocumented children to go to school.”

The Executive Director of the Immigrant Law Center of Minnesota, Veena Iyer, disagreed  with the Washington Post article. She said, “Immigrants keep Worthington strong, growing, and working — and many residents welcome them. The Immigrant Law Center of Minnesota has worked in Worthington for more than a decade. We have seen many residents respond with welcome arms and generosity as one wave of immigrants after another arrived. This century’s immigrants reversed a decline in population and prosperity that threatened Worthington and that still characterizes too many rural communities. . . . These immigrants come from Guatemala and Mexico, and also from Laos, Myanmar and Ethiopia. In all, they come from 80 different countries and speak more than 40 languages. They are young — with an average age of 36 — and hardworking. Immigrants make large contributions to the local economy and help make Worthington a vibrant and dynamic community. . . . Immigrants remain a crucial part of Worthington’s past, its present and its hope for the future.”

The Washington Post article, however, spurred Michele Bachmann, the former Republican member of the House of Representatives from a district north of the Twin Cities and far away from Worthington, to write an article in the leading newspaper of the State, lamenting the “ideological civil war” in the town created by the immigrants’ causing “significant social disruption and severely strain[ing] local resources.”

Bachmann’s article prompted a letter to the editor from a former senior vice president of the Minnesota Chamber of Commerce, who voiced three criticisms of Bachmann. First, she failed to recognize that immigrants pay state and federal income and payroll taxes, sales taxes when they shop and real estate taxes whether they are homeowners or renters. Second, she also failed to recognize that immigrants “are significant contributors to the development and growth of our economy.” They “start businesses and help existing ones to grow” and replace “our retiring baby boomer workforce.” Third, she failed to suggest “ways to redesign [our broken immigration system] to support 21st century community growth and the development of our economy.”

 Impact of Lower Immigration Numbers [5]

The latest data from the Census Bureau’s American Community Service indicates that the net increase of immigrants in the U.S. population “dropped to almost 200,000 people in 2018, a decline of more than 70 percent from the prior year.” According to the Chief Demographer at the Brookings Institution, William Frey, said this “was likely caused to a more restrictive approach by the Trump administration.”

Mr. Frey also pointed out that of the 14 states with the lowest concentrations of foreign-born people, 12 voted for Mr. Trump in 2016. In half of those 12 states, Asians dominated recent immigrant gains and in 10 of those states, immigrants are more likely than native-born residents to hold bachelor’s degrees.

Another expert, David Bier of the Cato Institute, observed, “It’s remarkable. This is something that really hasn’t happened since the Great Recession. This should be very concerning to the administration that its policies are scaring people away.”

Also favoring more U.S. immigration was the Chair of the Latino Donor Collaborative, Sol Trujillo, who said if  “the U.S. Latino population were an independent economy, its gross domestic product would be the fastest-growing among the world’s developed economies. U.S. Latino GDP is now $2.3 trillion, as detailed in a new report that estimates the group’s economic output by measuring their share across 71 industries.” Continued growth of the U.S. economy requires the continued growth of Latino immigration to counteract the decline in U.S. labor-force growth.

In addition, Trujillo says, “Latinos also strengthen the economy by creating jobs. Latino entrepreneurs produce more than $700 billion annually. And as Latinos in the U.S. have become wealthier, they increasingly contribute to the economy as consumers. They account for nearly 30% of America’s growth in real income. With that comes purchasing power, and from 2010-17 real consumption by Latinos in the U.S. grew 72% faster than the rest of the population.”

Trujillo continues. “The U.S. needs an immigration policy focused on recruiting people who are ready to work in every sort of job, who have demonstrated an exemplary work ethic, and who have become essential workers in many industries.” This requires “comprehensive reform of immigration laws and policies.”

Conclusion

Once again, Minnesota and other states with aging, declining population need more immigrants. The Trump Administration’s anti-immigrant rhetoric and actions are contrary to the U.S. national interest and need to be abolished as soon as possible.

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[1] E.g., Minnesota Facing Slowdown in Labor Force Growth, dwkcommentaries.com (September 3, 2019); Rural Minnesota Endeavoring To Attract Younger People, dwkcommentaries.com (Sept. 2, 2019).

[2] DePass, Job vacancies in Minnesota rise again, StarTribune (September 30, 2019); Forgrave, Worker shortage sparks Minnesota businesses to think outside the box, StarTribune (Sept. 29, 2019); DePass, Manufacturing in Minnesota slumps but faring better than nation as a whole, StarTribune (Oct. 1, 2019); Goodman, Global Trade Is Deteriorating Fast, Sapping the World’s Economy, N.Y. Times (Oct. 1, 2019); Tsang, Stocks Slide as Investors Face New Evidence of a Slowdown, N.Y. Times (Oct. 2, 2019); Bernhard & Vigna, U.S. Stocks Drop on Worries About Growth, W.S.J. (Oct. 2, 2019) .

[3]  Saslow, ‘Out here, it’s just me;’ In the medical desert of rural America, one doctor for 11,000 miles, Wash. Post (Sept. 28, 2019); Olson, Deaths rise after hospitals close, StarTribune (Sept. 29, 2019).

[4]  Outstate Minnesota City Aided by Immigrants, dwkcommentaries (Aug. 5, 2018); Miller, Immigrant kids fill this town’s schools. Their bus driver is leading the backlash, Wash. Post (Sept. 22, 2019); Iyer, Immigrants make our community stronger, StarTribune (Sept. 26, 2019); Bachmann, Washington Post article shows that open borders rip our towns apart, StarTribune (Sept. 26, 2019); Letters re Bachmann, Star Tribune (Sept. 30, 2019);

 

[5] Tavernise, Immigrant Population Growth in the U.S. Slows to a Trickle, N.Y. Times (Sept. 26, 2019); Trujillo, Latino Workers Save America From Stagnation, W.S>J. (Sept. 25, 2019).