Federal Reserve Bank Endorses Need for More Immigrants

On November 13 the Federal Reserve Bank of Minneapolis concluded its second annual Regional Economic Conditions Conference with a strong endorsement of the U.S. need for more immigrants.[1]

Its Senior Vice President and Research Director Mark Wright  summed up the proceedings by saying, ““What’s clear to me is that, in the same way that immigration has played a very large role in shaping the history of this country, it is going to do so again in the future, one way or another. The simple laws of demography and economics demand it.”

Wright added, “But what can’t get lost in purely thinking about the statistics, the spreadsheets, and the government budgets and how that’s affected by immigration, we also have to recognize that behind those statistics are the very real lives of many people, many families who are living in a great deal of uncertainty and great deal of difficulty right now.”

The conference’s keynote speaker, U.S. Senator Ron Johnson (Rep., WI), agreed. He said, “If you don’t have enough human capital, you’re not going to have a growing economy. No policies, no tax cuts, no deregulation is going to make up for the fact that we simply don’t have enough workers. … We’re going to need a vibrant, legal immigration population.”

Therefore, Senator Johnson called on his fellow members of Congress to adopt an approach of continuous (and incremental) improvement of immigration policy to be responsive to current conditions. He also emphasized the need for  a legal immigration system where states would have a stronger voice in determining the appropriate mix of skilled workers it could welcome to address local labor force needs and where greater emphasis was placed on immigrants work skills, rather than family reunification.

More specifically Johnson said he would reintroduce a bill to allow states to administer guest-worker visas allowing the individuals to stay in the U.S. for one year to take jobs, and he previously has suggested having an annual cap of 500,000 of such visas

Political reality, however, said Johnson, requires the Congress first to fix illegal immigration.

Another speaker, Ryan Allen, Associate Professor of  Community and Economic Development at the University of Minnesota’s Humphrey School of Public Affairs, emphasized that as fertility rates among native-born Americans lag and as the population ages, the growth of the labor force will stagnate, but for the inflow of immigrants. For the State of Minnesota, the labor force is growing at what Allen called an “anemic” one-half of 1 percent annually, and that’s not enough to ensure economic growth. In Allen’s view, to maintain the current labor force growth rate, Minnesota needs more than four times the number of immigrants that the state demographer projects will arrive in the state over the next three decades.

These thoughts were echoed by speakers from North and South Dakota. And a Montana immigration attorney redefined what “assimilation” of migrants should mean going forward. “They’re working, they’re providing for themselves and their family, they’re contributing to the economy by spending the money they earn. They are assimilated—perhaps not in language all of the time, perhaps not in skin tone or cultural background. They are assimilated in the sense that they are part of our economy.”

This Federal Reserve Bank’s President, Neel Kashkari, frequently makes these points about immigration.[2]

Conclusion

Recent Minnesota statistics provide further evidence of this need. Its unemployment rate in October remained at 2.8% while the state added jobs at a slower rate than last year and employers were working harder to attract and retain talent. A recent survey by the Minnesota Chamber of Commerce found that the difficulty of finding skilled workers is so pervasive that it is threatening business growth in the state. [3]

These conditions are also true throughout the U.S., Europe and other industrialized countries.[4]

It, therefore, is contradictory for the Trump Administration to increasingly deny and delay applications for legal immigration.[5]

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[1] Weiner, Human capital, demographics,, economic growth, and immigrants, Fed. Res. Bank of Mpls,  (Nov. 14, 2018); Ramstad, Sen. Ron Johnson says illegal immigration needs to be fixed before other reform, StarTribune (Nov. 14, 2018).

[2] E.g., Kashkari,  WSJ Op-Ed: Immigration Is Practically a Free Lunch for America (Jan. 19, 2018).

[3] Ramstad, Minnesota adds 3,400 jobs in October; unemployment holds at 2.8 percent, StarTribune (Nov. 15, 2018); DePass, Minnesota Chamber of Commerce Survey: Hiring woes threaten state’s business growth, StarTribune (Nov. 15, 2018).

[4] Noack, Fertility rates around the world are declining, some Trump supporters won’t like the solution, Wash, Post (Nov. 9, 2018); Freeman, Is America Running Out of Workers?, W.S.J. (Nov. 1, 2018). See also these posts to dwkcommentaries: U.S. Needs More Immigrants (April 14, 2018); Other Factors Favoring U.S. Immigration (May 17, 2018); Impact of Declining, Aging, Rural Population (May 22, 2018); More Immigrants Needed in U.S. (June 23, 2018); Fear of Change Driving U.S. and European Clamor Over Immigration (July 3, 2018); Outstate Minnesota Newspaper Stresses Need for Immigrants (July 27, 2018); Outstate Minnesota City Aided by Immigrants Aug. 5, 2018).

[5]  Bier, America Is Rejecting More Legal Immigrants Than Ever, N.Y. Times (Nov.15, 2018).

 

Outstate Minnesota City Aided by Immigrants

As noted in a prior post, a banker in Worthington, a city in the southwestern corner of Minnesota, estimated immigrants own more than a quarter of the businesses operating in that community. “If we embrace it, it’s what’s going to help rural Minnesota grow again.”

This report was amplified in an August 4 article in the StarTribune, Minnesota’s leading newspaper while another recent article addressed the general problems of outstate Minnesota.

 Additional Report on Worthington, Minnesota[1]

This city’s 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 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.

One of the largest employers in the town, JBS USA pork processing plant, has employees who are native speakers of at least 50 languages and dialects. The company seems supportive of its largely immigrant workforce with its human resources director helping an immigrant community form their own church.

Worthington recently was 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.”

 “A Social Contract for Rural Minnesota”

Another recent article in the StarTribune lamented the struggles of “many of our smallest towns . . . to stay relevant” as their aging populations decline.[2] The author, Jim Mulder, the retired executive director of the Association of Minnesota Counties and an adjunct professor at the University of St. Thomas in St. Paul and a policy fellow at Growth and Justice, therefore, proposed a Social Contract for Rural Minnesota with the following six elements:

  1. Education. Develop “new tools and strategies for educating children in sparsely populated areas. . . . [that] focus on outcomes, not on structure and process.”
  2. Health care. With a “shortage of physicians, dentists and mental health professionals . . . . [we must use] mobile health clinics, . . .by housing county social service and public health officials [closer to the people, by aggressively using] nurse practitioners and physician assistants [and by providing ] transportation services for the elderly to get to care providers].”
  3. Housing. Provide assistance to residents to meet their housing needs, including improving the housing quality.
  4. Transportation. Invest in better roads and bridges and transit of all types.
  5. Public infrastructure. Fund and build right-sized water and sewer systems.
  6. Economic development. Increase jobs.

Analysis of the Social Contract for Rural Minnesota

Although I liked the idea of a social contract for rural Minnesota, I thought the one proposed by Mr. Mulder missed the key issue. Therefore, I wrote the following letter to the Editor of the StarTribune, which was published on August 5:

  • “While I agree with Jim Mulder that we need “a shared commitment to success for one Minnesota” (“One Minnesota: Your undivided attention, please,”Opinion Exchange, July 29), his “Social contract for Rural Minnesota” misses the point.”
  • “We all know that rural Minnesota has an aging and declining population, which underlies all the problems he seeks to address. Thus, these parts of the state need more and younger people, and the obvious source of such people is more immigration. This point was made by an editorial in the Mankato Free Press that the Star Tribune reprinted (“The immigrant workforce: It’s critical for Minnesota’s economy,” July 24).”
  • “Thus, the social contract requires development of welcoming rural communities for people from all over the world.”

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[1] Schafer, Immigration and Immigrants are a positive force in Worthington, StarTribune (August 5, 2018).

[2] Mulder, One Minnesota: YOUR UNDIVIDED Attention, Please, StarTribune at OP1 (July 29, 2018).

More Immigrants Needed in U.S.

Previous posts have pointed out the U.S. need for more immigrants, in the opinion of this blogger. This conclusion follows from the U.S. declining birth rate, the aging, declining population of the rural parts of many states and the current low unemployment rates and the difficulties many companies are facing in finding additional workers.[1]

Bret Stephens, a conservative New York Times columnist, eloquently reiterates these  same points: (1) “The U.S. fertility rate has fallen to a record low.” (2) “Americans are getting older.” (3) There are “labor shortages in multiple industries throughout the country [that] inhibit business growth.” (4) “Much of rural or small-town America is emptying out.” (5) “The immigrant share (including the undocumented) of the U.S. population is not especially large.” [2]

Then Stephens adds a sixth, and more controversial, reason: “immigrants — legal or otherwise — make better citizens than native-born Americans. More entrepreneurialMore church-going. Less likely to have kids out of wedlockFar less likely to commit crime.” This reason is supported by (a) a 2015 National Academy of Sciences study that concluded that “immigrants are . . . much less likely than natives to commit crimes;” (b) a 2017 Cato Institute report that 0.85 percent of undocumented immigrants are incarcerated compared with 1.53 percent of native-born Americans; and (c) a 2018 Marshall Project analysis of 200 metropolitan areas in the U.S. with falling crime while their immigrant population was increasing.[3]

Another concurring opinion was voiced in the Wall Street Journal earlier this year by Neel Kashkari, the President of the Minneapolis’ Federal Reserve Bank. He said, “Robust immigration levels are vital to growing the American economy.” The reason is simple: immigration should lead to population growth, which “drives economic growth because a larger population means more workers to produce things and more consumers to buy things.” He concludes, “Immigration is as close to a free lunch as there is for America. Our welcoming culture provides us an unfair competitive advantage most countries would love to have. Let’s use that advantage to win the immigration competition and accelerate growth. We’d be crazy not to.”[4]

The impact of an aging American population is also the focus of another Wall Street Journal article. It says the U.S. is becoming  “a country with fewer workers to support the elderly—a shift that will add to strains on retirement programs such as Social Security and sharpen the national debate on the role of immigration in the workforce.”[5]

Yet another fact supporting this need for more immigrants is the June 21 U.S. Census Bureau report of estimated U.S. population “that showed, for the first time, a decline in the white population. The drop was small, just 0.02 percent, or 31,516 people in the year ending last July. But a demographer at the bureau, Molly Cromwell, said that it was real, and followed a 9,475 person drop the year before. That one was so small that it was essentially viewed as no change, she said.”[6]

This change was associated with deaths exceeding births among white people in more than half of the states in the country. Here is a map of the U.S. with states in blue having more white deaths than births in 2016.[7]

The Census Bureau had been projecting  “that whites could drop below 50 percent of the population around 2045, a relatively slow-moving change that has been years in the making.” But this new report leads some demographers to say that shift might come even sooner.

“The change has broad implications for identity and for the country’s political and economic life, transforming a mostly white baby boomer society into a multiethnic and racial patchwork. A majority of the youngest Americans are already non-white and look less like older generations than at any point in modern American history.”

Some political observers believe this current and future demographic change was a potent issue in the 2016 presidential election that helped drive many white voters to support Donald Trump.

Another New York Times columnist, Paul Krugman, sees many Americans exhibiting hatred of immigrants fueled by false beliefs that they are murderers and rapists and criminals or by what Krugman calls “sick fantasies.” He asks, “Where does this fear and hatred of immigrants come from? A lot of it seems to be fear of the unknown: The most anti-immigrant states seem to be places, like West Virginia, where hardly any immigrants live.”  He concludes, “the real crisis is an upsurge in hatred — unreasoning hatred that bears no relationship to anything the . . .[immigrants] have done. And anyone making excuses for that hatred — who tries, for example, to turn it into a “both sides” story — is, in effect, an apologist for crimes against humanity.”[8]

These demographic changes and challenges are not unique to the U.S. An article in the New York Times “states, “Immigration is reshaping societies around the globe. Barriers erected by wealthier nations have been unable to keep out those from the global South — typically poor, and often desperate — who come searching for work and a better life. While immigrants have often delivered economic benefits to the countries taking them in, they have also shaken the prevailing order and upended the politics of the industrialized world — where the native-born often exaggerate both their numbers and their needs.” Their article has many amazing global maps regarding immigration flows.[9]

Conclusion

It is easy to understand why many people fear these changes in the makeup of their communities and seek political answers that purportedly will stop these changes. Those of us who do not share this fear need to develop a message that emphasizes the constancy of change in human life on this planet, that these changes will have positive effects on life in the U.S. and that we as a society can cope with any negative effects.

Another element in this effort should be emphasizing the well-established fact that in any large group of people—be they immigrants or Republicans or Democrats or business executives or farmers—there will be a few “bad apples.” But the “bad apples” should not define the group as a whole. The American people at large get this point as a recent public opinion poll indicated that 75% of them believe immigration generally is good for the nation.[10]

We also have to battle against the vile rhetoric of Donald Trump, who just this week said his hardline stance on immigration was aimed at stopping the “death and destruction caused by people that [sic] shouldn’t be here.” He emphasized this point by having with him “angel families,” who are relatives of people who had been killed by undocumented aliens and who talked about their legitimate grief over loss of loved ones.

A good answer to such rhetoric was provided by John Rash, an editorial writer and columnist for the StarTribune (Minnesota’s largest circulation newspaper), in discussing a new exhibit at the Minnesota History Center:  “Somalis + Minnesota.” This exhibit, he says, “shows how migrants enrich Minnesota” by highlighting “the lives of a cultural cross-section of some [of the 57,000 Somali-Minnesotans,] including state Rep. Ilhan Omar, who made her own news after topping another immigrant, state Sen. Patricia Torres Ray, to get the DFL Party endorsement for the Fifth District congressional race.”  Rash adds, “the settlement of Somalis is just the latest contribution to Minnesota’s mosaic. Recent years have seen Vietnamese, Hmong, Karen and other immigrant communities enrich the state.”[11]

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[1] See these posts to dwkcommentaries: U.S. Needs More Immigrants (April 14, 2018); Other Factors Favoring U.S. Immigration (May 17, 2018); Comment: Wall Street Journal: U.S. Immigration Debate Disconnected from Economic Realities (May 21, 2018); Impact of Declining, Aging, Rural Population (May 22, 2018); Comment: More U.S. Guest Worker Visas for 2018 (May 26, 2018); Comment: Wall Street Journal Calls for More Guest Worker Visas (May 29, 2018); Comment: Small Town in Pennsylvania Bolstered by Immigrants (June 4, 2018);

[2] Stephens, Our Real Immigration Problem, N.Y. Times (June 21, 2018).

[3] Rogers, Trump, Defending Immigration Policy, Laments Deaths Caused by People Who ‘Shouldn’t Be Here,’ N.Y. Times (June 22, 2018).

[4] Kashkari, WSJ Op-Ed: Immigration Is Practically a Free Lunch for America, W.S.J. (Jan. 19, 2018)  Kashkari reiterated these views on June 21 at a roundtable event at the African Development Center in Minneapolis. (Ramstad, Immigration plays a key role in economic growth, Kashkari says, StarTribune (June 22, 2018).)

[5]  Adamy & Overberg, Growth in Retiring Baby Boomers Strains U.S. Entitlement Programs, W.S.J. (June 21, 2018).

[6] Tavernise, Fewer Births Than Deaths Among Whites in Majority of U.S. States, N.Y. Times (June 20, 2018); Sáenz & Johnson, White deaths Exceed births in a Majority of U.S. States, Applied Population Lab, UW-Madison (June 18, 2018).

[7]  The graph’s source: Analysis of National Center for Health Statistics data by Rogelio Sáenz, University of Texas at San Antonio, and Kenneth M. Johnson, University of New Hampshire.

[8]  Krugman, Return of the Blood Libel, N.Y. Times (June 21, 2018).

[9] Porter & Russell, Immigration Myths and Global Realities, N.Y. Times (June 20, 2018).

[10] Chokshi, 75 Percent of Americans Say Immigration Is Good for Country, Poll Finds, N.Y. Times (June 23, 2018); Brenan, Record-High 75% of Americans Say Immigration Is Good Thing, Gallup (June 21, 2018).

[11] Rash, Rash Report: The migration issue is global, and growing, StarTribune (June 22, 2018). See also Prather, ‘Somalis + Minnesota’ exhibit opens Saturday at Minnesota History Center, StarTribune (June 22, 2018); Jones, “Somalis + Minnesota” at history museum, StarTribune (June 22, 2018) (photographs of exhibit).