Trump Erroneously Says U.S. Is “Full”   

President Donald Trump at an April 5 roundtable on the border at the U.S. Border Patrol station in Calexico, California addressed arriving Central Americans: “Can’t take you anymore. Can’t take you. Our country is full. Our area is full, the sector is full. Can’t take you anymore. I’m sorry.” Two days later he repeated this message in the following April 7 tweet:

  • “Mexico must apprehend all illegals and not let them make the long march up to the United States, or we will have no other choice than to Close the Border and/or institute Tariffs. Our Country is FULL” (Emphasis added.)  [1] 

Trump, however, was wrong in this assertion.[2]

U.S. Needs More Immigrants

 Immediately after the roundtable, U.S. Representative Rep. Pramila Jayapal (Dem., WA) rejected the contention that the U.S. was “full.” She said, “It’s just a ridiculous statement. We have agriculture industries across the country that desperately need workers. We have construction industries in California and in other places that desperately need workers, and immigration has always been not just a question of immigration policy, but who we are as a country.”

A More complete rejection of Trump’s assertion came in an article in the New York Times. It starts by saying this assertion “ runs counter to the consensus among demographers and economists.” This conclusion was documented by the following:

  • The U.S. is a country “where an aging population and declining birthrates among the native-born population are creating underpopulated cities and towns, vacant housing and troubled public finances. . . . Local officials in many of those places view a shrinking population and work force as an existential problem with few obvious solutions.”
  • “In smaller cities and rural areas, demographic decline is a fundamental fact of life. A recent study by the Economic Innovation Group found that 80 percent of American counties, with a combined population of 149 million, saw a decline in their number of prime working-age adults from 2007 to 2017.. . . Local officials in many of those places view a shrinking population and work force as an existential problem with few obvious solutions.” [3]
  • “Population growth in the United States has now hit its lowest level since 1937, partly because of a record-low fertility rate — the number of children born per woman.”
  • “The Congressional Budget Office foresees the American labor force rising by only 0.5 percent a year over the coming decade, about one-third as fast as from 1950 to 2007. That is a crucial reason that economic growth is forecast to remain well below its late 20th-century levels.”
  • “There are now 2.8 workers for every recipient of Social Security benefits, a rate on track to fall to 2.2 by 2035, according to the program’s trustees. Many state pension plans face even greater demography-induced strains.”
  • John Lettieri, president of the Economic Innovation Group, fears a “declining population, falling home prices and weak public finances will create a vicious cycle that the places losing population could find hard to escape.”

One of the solutions to this U.S. problem is creation of “a program of ‘heartland visas,’ in which skilled immigrants could obtain work visas to the United States on the condition they live in one of the counties facing demographic decline — with troubled countries themselves deciding whether to participate.”

Washington Post Editorial

A Washington Post editorial lambasted Trump for his “full” statement. It points out that only a month before these remarks, Trump said, “‘So we’re going to let a lot of people come in because we need workers. We have to have workers.’ And the day after his ‘full’ assertion, the Department of Homeland Security nearly doubled the number of guest worker visas it would issue this year. [4]

The Post editorial then recited the following facts about why the U.S. needs more immigrants:

  • The U.S. “faces a shrinking native-born labor force as baby boomers retire at a rate of 10,000 daily , unemployment reaches historically low levels, and immigration continues to dwindle from Mexico, a traditional source of cheap documented and undocumented employees. In March, the Labor Department reported there were 7.6 million unfilled jobs and just 6.5 million unemployed people, marking 12 straight months during which job openings have exceeded job seekers.”
  • “The labor shortage is sapping growth as well as state and municipal revenue. Small businesses and major corporations have sounded the alarm as the delivery of goods is delayed by a drastic shortage of truckers, and housing prices in some markets are driven up by an inadequate supply of construction workers.”
  • “The deficit is particularly acute in lower-wage jobs, as more and more Americans attend college and are reluctant to take positions in skilled trades and other jobs requiring manual labor. Home health aides who care for the sick and frail are in extremely short supply, as are workers in retail, restaurants and farms. The problem is exacerbated by a fertility rate — the number of children born per woman — that is the lowest since the 1930s. The impact of that decline until now has been partly offset by immigration.”

In short, the Post says, Trump’s “political strategy is a prescription for long-term economic anemia and declining competitiveness.”

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[1] Kim & Perry, ‘Our country is full . . . . So turn around, Trump warns migrants during border roundtable, Wash. Post  (April  5, 2019); Trump, Tweet (April 7, 2019).

[2] Irwin & Badger, Trump Says the U.S. Is ‘Full.’ Much of the Nation Has the Opposite Problem, N.Y. Times (April  9, 2019). This blog also frequently has discussed the U.S. need for more immigrants.  See, e.g., “America’s Farmers Need Immigrants” (March 22, 2019); Businesses Need More Immigrants (March 24, 2019); U.S. Construction Industry Needs More Immigrants (April 3, 2019).

[3] The Economic Innovation Group has published a report on the facts of U.S. population and its impact on economic growth with fascinating U.S. maps showing various population facts. (Economic Innovation Group, From Managing Decline to Building the Future: Could a Heartland Visa Help Struggling Regions?, at 9-10 (April 2019). )

[4] Editorial, The country isn’t ‘full’—and Trump knows it, Wash. Post (April 12, 2019).

 

U.S. Construction Industry Needs More Immigrants 

Two recent posts have discussed the U.S. need for more immigrants in agriculture and business.[1]

This point was underscored by a New York Times article focusing on the need for more immigrants in the construction industry.[2]

This article states, “Nationwide, the average wage of nonsupervisory workers in residential construction hit $25.34 an hour in January. That’s over 6 percent more than a year earlier, close to the steepest annual increase since the government started keeping track almost 30 years ago. Pay is taking off even among those in less-skilled construction trades.”

This “rising cost of . . . [construction] crews reflects a demographic reality that could hamstring industries besides their own: Their labor force is shrinking. President Trump’s threat to close the Mexican border, a move that would cause damage to both economies, only adds to the pressure.”

In addition, “economic growth in Mexico and the aging of . . . [its] population were reducing the flow of Mexican workers into the United States. The number of undocumented immigrants in America declined to 10.7 million at the end of 2017 from a peak of over 12 million at the height of the housing bubble in 2008, according to the Center for Migration Studies.” This is coupled with projections of “very little growth in the[U.S.] working-age population over the next two decades. If the United States were to cut off the flow of new immigrants, Pew noted, its working population would shrink to 166 million in 2035 from 173 million in 2015.”

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[1] “America’s Farms Need Immigrants,” dwkcommentaries.com (Mar. 22, 2019);  Businesses Need More Immigrants, dwkcommentaries.com (Mar. 24, 2019).

[2] Porter, Short of Workers, U.S. Builders and Farmers Crave More Immigrants, N.Y. Times (April 3, 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.

 

 

Robots Replacing Farm Workers 

Prior posts have described the overall shortage of labor in the U.S. today, especially in agriculture.[1] Now these shortages have prompted several firms in this industry to introduce robots and other automation into their businesses.[2]

For example, Taylor Farms of Salinas, California, one of the world’s largest producers and sellers of fresh-cut vegetables, recently unveiled a fleet of robots designed to replace humans. Its smart machines can assemble 60 to 80 salad bags a minute, double the output of a worker. In the process it creates higher-skilled positions that can attract younger, educated workers.

Other examples are Driscoll’s, the berry titan based in Watsonville, Calif., and Christopher Ranch, a giant producer of garlic. Driscoll’s has invested in several robotic strawberry harvesting start-ups, including Agrobot, which uses imaging technology to assess a berry’s ripeness before it is harvested. Christopher Ranch has started using a 30-foot-tall robot to insert garlic buds into sleeves, the nets into which they are bundled for sale in supermarkets. Yet another is Bartley Walker, a family business that  now offers a robotic hoeing machine with a detection camera capable of identifying the pesky weeds that sprout between row crops like broccoli and cauliflower.

In the background is a 2017 survey of California farmers  that reported 55% with labor shortages and nearly 70% for those depending on seasonal workers.

Ideally, growers say, Congress would pass a bill to legalize undocumented farm workers who are already here and encourage them to stay in the fields, as well as include provisions to ensure a steady flow of seasonal workers who could come and go with relative ease.

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[1] E.g., Federal Reserve Bank Endorses Need for More Immigrants, dwkcommentaries.com (Nov. 17, 2018).

[2]  Jordan, As Immigrant Farm Workers Become More Scarce, Robots Replace Humans, N.Y. Times (Nov. 20, 2018).

Fear of Change Driving U.S. and European Clamor Over Immigration

New York Times journalists Amanda Taub and Max Fisher have trenchant insights about the current conflicts over immigration in the U.S. and Europe.[1]

First, they assert that these conflicts “often . . .have more do with race and ethnic identity — or with simple politics.” There is anger amongst the people,, but it “stems less from migration specifically than from a broader anxiety over social change. When people feel a sense of threat or a loss of control, they sometimes become more attached to ethnic and national identities.”

“For some people, the antipathy is explicitly racial. But for many others, the mere fact of cultural change itself can be unsettling. Immigration, unauthorized or otherwise, is just one of the changes that bring about a feeling of the loss of control. Economic dislocation, changes in social hierarchies and demographic change can all produce the same effect.”

In this context, “migrants and asylum seekers have become, for many voters, a symbol of the political establishment’s failure to protect them and their interests.”

Second, in the U.S. “most voters are growing more tolerant of immigration, but a committed minority is increasingly demanding limits on immigration in all forms. Because that minority makes the issue a top priority, it holds considerable power over policy.”

“The two-party American system means that the issue has polarized voters. Both sides see the United States’ core character as at risk of being destroyed. That feeling of existential, zero-sum conflict can make people feel that extreme action is justified to prevent victory for the other side, undermining democratic norms.”

Conclusion

A prior post emphasized this blogger’s opinion that the U.S. needs more immigration to provide (a) skilled and unskilled workers for the American economy, (b) younger people to counterbalance an aging population, (c) financial contributions for the social welfare needs of increasing numbers of retirees and (d) help to rescue small towns from collapse. At the same time, the post said it should be easy to understand why many people fear the  accompanying demographic changes.[2]

Taub and Fisher rightly emphasize why this fear of immigration by many Americans makes them put a top priority on limiting immigration

This current controversy over immigration makes me recall that in American history the once dominant northern European, Protestant population feared new immigrants from southern Europe (Italians and Greeks, for example), Roman Catholic immigrants from Ireland and others from Eastern Europe (Poland, for example) and from Asia. Now for most Americans the descendants of these newer immigrant groups have been subsumed into the “white” category of the population along with the elimination of the disparaging epithets previously used for such people.

Yet the American Anthropological Association has concluded that race is not a scientific concept. As the Association declared in a 1998 statement:[3]

  • It “has become clear that human populations are not unambiguous, clearly demarcated, biologically distinct groups. Evidence from the analysis of genetics (e.g., DNA) indicates that most physical variation, about 94%, lies within so-called racial groups. Conventional geographic “racial” groupings differ from one another only in about 6% of their genes. This means that there is greater variation within “racial” groups than between them. In neighboring populations there is much overlapping of genes and their phenotypic (physical) expressions. Throughout history whenever different groups have come into contact, they have interbred. The continued sharing of genetic materials has maintained all of humankind as a single species. . . . [Thus,] any attempt to establish lines of division among biological populations [is] both arbitrary and subjective.”

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[1]  Taub & Fisher, In U.S. and Europe, Migration Conflict Points to Deeper Political Problems, N.Y. Times (June 29, 2018).

[2] More Immigrants Needed in U.S., dwkcommentaries.com (June 23, 2018); White Anxiety and Fearing Immigration, dwkcommentaries.com (June 25, 2018).

[3] Anthropologists’ Opinion That Race Is Not a Scientific Concept, dwkcommentaries.com (June 7, 2016); Anthropologists’ Statement Regarding the Historical and Cultural Background to the Concept of Race, dwkcommentaries.com (June 8, 2016); Highlights of American Anthropological Association’s exhibit on Race, dwkcommentaries.com (June 27,  2016).

U.S. Needs More Immigrants

With longer life expectancy, increasing numbers of baby-boomer retirements from the active labor force and  a low birth rate that now is lower than the death rate, the U.S. increasingly faces the need to find more workers. The source is obvious: more immigrants.[1]

Barron’s Article[2]

A noted business publication, Barron’s, put it this way, “Across the nation, in industries as varied as trucking, construction, retailing, fast food, oil drilling, technology, and manufacturing, it’s becoming increasingly difficult to find good help. And with the economy in its ninth year of growth and another baby boomer retiring every nine seconds, the labor crunch is about to get much worse.”

“Census Bureau projections show the overall U.S. population, a rough proxy for the country’s demand for goods and services, growing faster than the workforce— which supplies those goods and services— through 2030 and probably beyond. From 2017 to 2027, the nation faces a shortage of 8.2 million workers, according to Thomas Lee, head of research at Fundstrat Global Advisors.”

Another restriction on labor supply is the “people [who] have dropped out of the workforce, owing to factors such as disability, opioid addiction, and prison records that make it hard to snare jobs. The labor force participation rate, which measures the percentage of the adult population that’s working or actively seeking employment, has dropped to 63% from 67% in 2000.”

Washington Post Editorial[3]

A Washington Post editorial opens with this statement: “American employers in an array of industries — manufacturing, agriculture, trucking, home building, energy, food service, retail and others — are warning that a long-brewing labor shortage is reaching crisis proportions.”

While the U.S. needs more skilled and English language-proficient immigrants, the editorial continues, “employers in food processing, retail, landscaping and other industries that rely on low-skilled labor are already desperate for workers.”

“By driving away legal and illegal immigrants even as unemployment flatlines and baby boomers retire, [President Trump] deprives businesses of oxygen in the form of labor. That’s not a recipe for making America great.”

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[1]  The above demographic challenges are not just U.S. problems. See World Faces Demographic Challenges, dwkcommentaries.com (April 3, 2018).

[2] The Great Labor Crunch, Barron’s (Mar. 10, 2018).

[3] Editorial, America needs more workers. Trump’s war on immigration won’t help, Wash. Post (April 8, 2018).

Trump’s Macroeconomic Idiocies

President Trump continues to spout with expensive ways to implement at least some of his campaign promises. He has not yet submitted a proposed budget for the federal government that would reveal whether and how the competing needs for federal expenditures would be reconciled.

So far, however, Trump continues to utter macroeconomic idiocies. Here are a few.

First, he urges unspecified huge increases in military spending.

Second, Trump continues to call for the construction of a wall along the U.S.-Mexico border. Trump initially said it would cost $8 billion and subsequently upped his figure to $10 to $12 billion. Last October, however, the MIT Technology Review put the real figure at $27 to $40 billion. (Editorial, The Costs of Mt. Trump’s Dragnet, N.Y. Times (Feb. 26, 2017.)

Second, Trump has called for expansion of U.S. arrests and deportation of undocumented aliens.  Already such efforts annually cost over $19 billion, and the American Action Forum recently estimated that expelling all unauthorized immigrants and keeping them out would cost $400 to $600 billion. (Iibid.)

Moreover, says that Forum, such drastic actions would reduce the U.S. GDP by $1 trillion. “Farms and restaurants, hotels, manufacturers, retail businesses–all sectors of the [U.S.] economy benefit directly or indirectly from immigrant labor.” In addition, they pay income, property and sales taxes and make financial contributions to our Social Security Administration while generally not collecting any Social Security benefits. That Administration estimates that such contributions annually total $13 billion while only getting back $1 billion. (Ibid.)

Another glaring socio-economic idiocy of Trump’s suggested massive increase of deportations of unauthorized immigrants is its failure to recognize obvious U.S. demografic trends. The U.S. has low birth rates and aging and declining population in many parts of the country, especially in rural areas. Immigrants are needed in those areas to care for older citizens in their own homes or in assisted-living centers of various kinds while foreign-born primary-care physicians already are a major provider of medical care.  (E.g., Karl, Minnesota used to attract more people from other states than it lost to them. Now it’s the opposite. What happened!, Minn. Post (Feb. 24, 2017).)

Third, the recent heavy rains in Northern California and the threatened collapse of the Oroville Dam have highlighted the dangerous condition of many dams and other important infrastructure systems throughout the U.S. and the need to repair, modify and replace many such structures. An expert pointed out, “Most of the dams in the [U.S.] are over 50 years old” and desperately need such work. (E.g., Assoc. Press, Rural California Levees Beseiged by Pounding Wet Winter, N.Y. Times (Feb. 24, 2017); Griggs, Aeschylus & Almukhtar, America’s Aging Dams Are in Need of Repair, N.Y. Times (Feb. 23, 2017).) An objective analysis of competing demands for federal funds should put this demand at the top of the list.

Fourth, Trump also has called for reduced taxes and unspecified changes to health care insurance

Conclusion

From a macroeconomic perspective an argument could be made for a stimulative federal budget with expenditures exceeding revenues. But the Trump proposals to date show no sign of confronting the questions of how much is too much.

There are many reasons to oppose Trump’s trumpeting the proposed U.S.-Mexico wall and expansion of arrests and deportations of undocumented foreigners: human rights, human decency and promoting positive relations with neighboring countries. They deservedly have received much attention. Yet another reason is their enormous cost.