U.S. economy – dwkcommentaries

Columnist Says U.S. Economic Problems May Be Reason for Trump’s Downfall

Nicholas Kristof, a New York Times columnist, says that “what may impede Trump and preserve American democracy is not popular revulsion at the historic damage that he is doing to America but rather alarm at the myriad banal impacts on our daily lives because of Trumpian mismanagement.”

“Trump’s tariffs, even if partly delayed, presumably will raise consumer prices and hurt the financial markets and thus our retirement savings; they will create a mess of supply chains for manufacturing goods. One gauge of what to expect: The latest estimate from the Atlanta Federal Reserve is an astonishing 2.4 percent decline in American G.D.P. in the first quarter of 2025.”

“What’s more, Republicans are now apparently preparing to slash Medicaid to pay for continued tax cuts for the rich. . . [The] federal government would be providing less money to pay for health care for the roughly 72 million Americans on Medicaid. The essential reality is that the plan appears to cut health care for the poorest Americans so that the richest Americans can get a big tax cut — and this is not just morally outrageous but also politically fraught.”

When federal employees who are discharged “are health workers at a V.A. hospital, patients will notice. When they manage agriculture programs, farmers will notice.”

“In Western states, we’re already fearful of the ways the Trump cuts will hamstring firefighting during the next fire season.”

“In short, Trump-Musk incompetence and recklessness may — just may — discredit the vandals in Washington and rein them in.”

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Kristof, The Thing That Could Be Trump’s Undoing, N.Y. Times (Mar. 8, 2024).

Washington Post’s Criticism of Trump’s Tariffs

A Washington Post editorial voices criticism of Trump’s policy and comments about tariffs.

“The market never lies. It is often mistaken, as it was during the post-election honeymoon, when investors seemed to assume Donald Trump didn’t really mean it about tariffs. But it always tells you exactly what it thinks.”

“Right now, it is thinking that the stiff tariffs Trump has imposed will cost American companies, and the economy, dearly. Markets have plummeted since Trump announced new levies on Canada, Mexico and China, erasing nearly all gains since his election. The president might think that “trade wars are good, and easy to win,” but investors disagree.”

“In this, they reflect not only the consensus among economists but also the realities facing American businesses and consumers.”

“’Customers are pausing on new orders as a result of uncertainty regarding tariffs,’ a transportation equipment company reported. ‘The incoming tariffs are causing our products to increase in price,’ a machinery manufacturer said. A maker of electrical equipment added, ‘The uncertainty about tariffs keeps us cautious on spending, despite the strong sales right now.’”

“’Regime uncertainty’ is the economic term for worries like these. Investments take time to pay off, and when government policy constantly shifts, companies have a hard time telling whether an investment will be worth it. Investors, too, get nervous about the rules governing businesses and those surrounding the taxation of their profits. By slowing investment and innovation, regime uncertainty stifles the economy and makes it harder to attract foreign investment.”

The ” president’s frequent shifts in policy stand to have a chilling effect. In the past month alone, tariffs have been imposed, delayed, reimposed, and now — at least for some categories of goods — delayed for another month. Adding to the unease are the administration’s attacks on the justice system, which foreign investors, especially, are bound to be watching. To repeat: There is a reason that so much foreign debt is structured to be governed by U.S. law. Signaling that America’s trade policies could change at any time, and that its justice system is vulnerable to political influence, risks the country’s position as a global destination for securities issuance and investment capital.”

“The haste with which this year’s tariffs have been imposed, and Trump’s dubious rationales for imposing them, justifiably make people worry that the current trade rules could be rewritten again and again.”

“And while companies could resolve this uncertainty once and for all by making, and sourcing, products in the United States, this is a costly proposition — too costly, in some cases, to be worthwhile. If domestically made products are more expensive than foreign ones, investments might not pencil out, and some exporters might find themselves priced out of global markets. This retrenchment will ripple through an economy that already looks fragile.”

“On the same day that the Trump administration announced the tariffs would go into effect, the Federal Reserve Bank of Atlanta said it had revised its estimate of first quarter gross-domestic product downward, to -2.8 percent. Consumers say they are nervous about inflation, job prospects and, yes, tariffs.”

“[M]anufacturers think abrupt changes in trade policy are bad for business.”

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Editorial, The market’s grim view of tariff shenanigans, Wash. Post (Mar.7, 2025).

U.S. Fertility Rate Falls to Record Low

On April 25, the U.S. Centers for Disease Control and Prevention released its report on U.S. fertility rates that showed the total fertility rate fell to 1.62 births per woman in 2023, a 2% decline from the prior year and the lowest rate since the government began tracking that data in the 1930’s.[1]

This is attributed to women having fewer children, later in life; to women having fulfilling careers and more access to contraception; young people being more uncertain about their futures and spending more of their income on home ownership, student debt and child care.

The total number of children born in the U.S. in 2023 was approximately 3.59 million.

This phenomenon is partially offset by increasing immigration of people from other countries. In short, the U.S. benefits from increasing immigration.[2]

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[1] Calfas & DeBarros, U.S. Fertility Rate Falls to Record Low, W.S.J. (April 25, 2024)

[2] 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); U.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).

Another Documentation of the U.S. Need for Immigrants

Just yesterday this blog published a lengthy post about how the problems in the U.S. asylum system were promoting increases in U.S. immigration that were benefiting the U.S. economy.[1]

Now the New York Times has published a lengthy article focusing on the positive impact of new immigrants to this country with its declining and aging population.[2]

The Example of the State of Maine

The State of Maine has the oldest population in the U.S. with a median age of 45.1. Its “native-born employees either leave the work force or barrel toward retirement.” This especially presents a problem for the State’s annual $1 billion business of catching, cleaning and selling the lobsters off its Atlantic coast. As Ben Conniff, a founder of the State’s lobster processing plant (Luke’s Lobster), put it, “Folks in Maine are generally not looking for manufacturing work, especially in food manufacturing.”

In response, the founders of this company started Lift All Boats “to supplement and diversify the fast-aging lobster fishing industry. It aims to teach minorities and other industry outsiders how to lobster and how to work their way through the extensive and complex licensing process, and about half of the participants have been foreign-born.” And Maine’s state legislators are creating an Office of New Americans to attract and integrate immigrants into the work force.”

The Rest of the U.S.

“Nationally, even with the barriers that prevent some immigrants from being hired, the huge recent inflow has been helping to bolster job growth and speed up the economy. . . . The new supply of immigrants has allowed employers to hire at a rapid pace without overheating the labor market. And with more people earning and spending money, the economy has been insulated against the slowdown and even recession that many economists once saw as all but inevitable as the Federal Reserve raised interest rates in 2022 and 2023.”

“Ernie Tedeschi, a research scholar at Yale Law School, estimates that the labor force would have decreased by about 1.2 million people without immigration from 2019 to the end of 2023 because of population aging, but that immigration has instead allowed it to grow by two million.” In the longer run, “economists think the immigration wave could also improve America’s labor force demographics . . . even as the native-born population ages, with a greater share of the population in retirement with each year.”

“In fact, immigration is poised to become increasingly critical to America’s demographics. By 2042, the Congressional Budget Office estimates, all American population growth will be due to immigration, as deaths cancel out births among native-born people. And largely because immigration has picked up so much, the C.B.O. thinks that the U.S. adult population will be 7.4 million people larger in 2033 than it had previously expected.”

“Immigration could help reduce the federal deficit by boosting growth and increasing the working-age tax base.”

However, “nobody knows how long today’s big immigration flows will last. Many are spurred by geopolitical instability, including economic crisis and crime in Venezuela, violence in Congo, and humanitarian crises across other parts of Africa and the Middle East.” This, as we in the U.S. know, has sparked a lot of political unrest over this development.

Nor does anyone know about the future course of the U.S. economy. If it slows, “fewer immigrants might want to come to the United States, and those who did might struggle to find work . . . [and] compete against American workers for jobs, particularly those with lower skill levels.” However, “recent economic research has suggested that immigrants mostly compete with one another for work, since they tend to work in different roles from those of native-born Americans.”

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[1] Problems in U.S. Asylum System Help Promote Increases in U.S. Immigration, dwkcommentaries.com (April 11, 2024).

[2] Smialek, Immigrants in Maine Are Filling a Labor Gap. It May Be a Prelude for the U.S., N.Y. Times (April 12.2024).

U.S. Has Long-Term Labor Crisis

The Wall Street Journal has set forth a detailed analysis of the U.S. long-term labor crisis.[1]

“Work experts have warned for years that the combination of baby boomer retirements, low birthrates, shifting immigration policies and changing worker preferences is leaving U.S. employers with too few workers to fill job openings. While the labor market is softening, none of those factors are expected to change dramatically in the coming years.”

“The U.S. birthrate—the number of births per 1,000 people—has been falling for decades, declining by about half since the 1960s.”

“Labor shortages can be eased by funneling more people into the labor force or making the current workforce more productive. That can be done through immigration; outsourcing more work overseas; tapping underutilized labor pools such as people with disabilities and the formerly incarcerated; and improving productivity through automation, training and refining business and production processes.”

“Offshoring, the scourge of the U.S. manufacturing workforce in the last decades of the 20th century, has lost favor with some business leaders after the pandemic highlighted the vulnerabilities of a global supply chain. Reshoring—bringing manufacturing back to the U.S.—is gathering momentum, backed by billions of dollars in government subsidies.”

“Generative AI tools such as ChatGPT could help, but the technology is too new to know exactly where large language models can be reliably applied in business or work settings.”

“That leaves immigration. After falling during the pandemic because of Covid-related policies, immigration has come back strongly. But it remains a divisive issue, and business leaders say the lack of a coherent, stable policy is contributing to the labor problem.”

Conclusion

This blogger agrees that U.S. should significantly revise its immigration laws to encourage the immigration of people who could be productive workers in our economy.[2] But the U.S. Congress currently is dysfunctional on many issues, including immigration.

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[1] Weber & Pipe, Why America Has a Long-Term Labor Crisis, in Six Charts, W.S.J. (Sept. 21, 2023).

[2] See, e.g., the following posts to dwkcommentaries.com: U.S. Afghan Special Visa Program Still Facing Immense Problems (Sept. 2, 2023); Overwhelmed U.S. Immigration Court System (Sept. 1, 2023):Increasing Migrant Crossings at U.S. Border Call for Legal Change (Aug. 16, 2023);Wall Street Journal Editorial: U.S. Needs More Immigrants (July 25, 2023); Other States Join Iowa in Encouraging Immigration To combat Aging, Declining Population (Feb. 22, 2023);More Details on U.S. and Other Countries’ Worker Shortages (Feb. 9, 2023);Iowa State Government Encouraging Refugee and Migrant Resettlement (Feb. 3, 2023).

Pandemic Journal (# 24): What We Are Learning in the Pandemic

Peggy Noonan, a Wall Street Journal columnist, offers her thoughts on what we are learning in the coronavirus pandemic. Here are her main points along with reactions thereto.

Noonan’s Observations[1]

She says we have learned a lot. “How intertwined and interconnected our economy is, how provisional, how this thing depended on that. And how whisperingly thin were everybody’s profit margins. The well-being of the West Side block depends on human traffic, which depends on restaurants and bars, which depend on the theater being open. It was a George Bailey economy: every man on that transport died. Harry wasn’t there to save them, because you weren’t there to save Harry.” [2] “Every economy is, in the end, and if you’re interested in economics you knew this, but not the way you know it after the business catastrophe of 2020.”

“But the biggest things I suspect we learned were internal. No matter what you do for a living, when you weren’t busy introspection knocked on the door and settled in. Two different men, professionals, both blinked with surprise as they reported, unasked, that they can’t believe they have their college-age kids home again and they’re all together and they have dinner every night and play board games. They were so grateful. They had no idea this was possible, that it would make them so happy. That it had been missing.”

“People have suffered. They’ve been afraid. The ground on which they stand has shifted. Many have been reviewing their lives, thinking not only of ‘what’s important’ or ‘what makes me happy’ but ‘what was I designed to do?’ They’ve been conducting a kind of internal life review, reflecting on the decision that seemed small and turned out to be crucial, wondering about paths not taken, recognizing strokes of luck. They’ve been thinking about their religious faith or lack of it, about their relationships. Phone calls have been longer, love more easily expressed, its lack more admitted.”

“It has been a dramatic time. We have stopped and thought about our lives, and our society’s arrangements. We have applauded together, for the first time, those whose jobs kept our towns up and operating, from nurses to truckers. We’ve rethought not only what is ‘essential’ but who is important. All this will change you as a nation.”

“Here is what I am certain of. We will emerge a plainer people in a plainer country, and maybe a deeper one. Something big inside us shifted.”

“[Y]ou can almost hear people thinking eh, our time is finite, our money limited—maybe that’s not gray[hair]. it’s silver. . . . I like the simplicity of this.”

“The world has admired and imitated America’s crisp chic, but I see an altering of the national style. For reasons economic and existential a new simplicity is coming, glitz leaving.”

“We’re getting pared down. We’re paring ourselves down.”

‘The pioneer genes shall prevail, and women will focus on the essentials: nurturing their children in the arc of safety (homes and schools) providing food (driving to breadlines and food banks) and making do with what is already in the closet. Everything old will be suddenly new again.”

“America is about to become a plainer place. Maybe a deeper one, too. Maybe that’s good.”

Reflections

Do you agree with any of these observations?

Some of her reflections concern individuals and every-day life. I certainly hope that “America is about to become a ‘plainer place’ and ‘a deeper one.’”

Economically we certainly should have learned “how intertwined and interconnected our economy is, how provisional, how this thing depended on that. And how whisperingly thin were everybody’s profit margins.”

Noonan, however, fails to mention the big economic lessons of the pandemic for me and many others: the immense economic inequality in the U.S.; the many ways of racial injustice in the U.S.; and our horrendous health-care system. All of these problems require government action.

That, in turn, raises my concern over the future impact of the many, young, conservative federal judges who recently have been confirmed by the U.S. Senate, some in the midst of the pandemic, pursuant to Majority Leader Mitch McConnell’s agenda.[3]

More generally, the need for government action emphasizes my belief that many aspects of the U.S. system of government are obsolete: the Electoral College; every state having two senators with equal voting rights regardless of the state’s population; the U.S. Senate’s filibuster rule; the horribly complicated system of voting and its manipulation to suppress voting, including President Trump’s recent rantings against voting by mail.[4]

The Trump Administration’s inconsistent and wavering foreign policies before and during the pandemic raise the question of what will become of the international system of institutions, treaties and laws that the U.S. helped to create after World War II to foster and preserve peace and human rights. In my opinion, we should be leading the world in reforming and modernizing this system, not tearing at its roots.[5]

All of these larger issues raise the issue of what can one individual do about them.

My answer. Carefully review candidates for office and vote for those who promise to work on these problems. Provide financial support to political parties and candidates as well as organizations that are supporting these reform measures. Advocate for individuals, organizations and policies involved in this effort. (I choose to do my advocacy with this blog.)

Noonan appropriately mentions many people expressing gratitude for simple things in the midst of the pandemic. I have gratitude for my wife, sons, their families and I being in good health and for my wife and I are not living in a senior-citizen retirement home. I am grateful for being retired with good savings and thus not worrying about keeping my job or finding a new one or about how I will be able to pay for food or the mortgage.[6]

I also am grateful for friends and family and have made efforts to reconnect with them.[7]

Like Noonan, I hope that people are “reviewing their lives, thinking not only of ‘what’s important’ or ‘what makes me happy’ but ‘what was I designed to do?’ They’ve been conducting a kind of internal life review, reflecting on the decision that seemed small and turned out to be crucial, wondering about paths not taken, recognizing strokes of luck.”

For a Christian, this means discerning your calling for a particular time and place and recognizing that your calling may change over time. This includes forgiving others for their wrongs as well as praying for forgiveness for your own misdeeds.[8]

I trust that I will continue learning about the world during this pandemic. Another of the many subjects I have learned something about are prior pandemics, especially the Flu Pandemic of 1918. [9]

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[1] Noonan, A Plainer People in a Plainer Time, W.S.J. (May 22, 2020).

[2] Noonan apparently refers to brothers George and Harry Bailey, characters in the movie “It’s a Wonderful Life.” George was a wealthy banker who suffers various difficulties, including not being present to save his brother from drowning. As a result, George contemplates suicide before being rescued by his guardian angel and friends. (It’s a Wonderful Life, Wikipedia.)

[3] E.g., Hulse, McConnell Has a Request for Veteran Federal Judges: Pleases Quit, N.Y. Times (Mar. 16, 2020; Hulse, Trump Picks McConnell Protégé for Influential Appeals Court Seat, N.Y. Times (April 3, 2020).

[4] See, e.g., these entries in dwkcommentareis.com: Search: filibuster; U.S. Needs More Democratization (Feb. 14, 2020); Responses to Ezra Klein’s Democratization Thesis (Feb. 15, 2020); Open Letter to U.S. Senate from 70 former Senators (Feb. 29, 2020); Pandemic Journal (# 10): Wisconsin’s Primary Election (April 10, 2020) (and comments thereto).

[5] E.g., Douthat, The End of the New World Order, N.Y. Times (May 23, 2020).

[6] See, e.g., these posts to dwkcommentaries.com: Gratitude I (Mar. 15, 2012); Gratitude II (April 11, 2012); Gratitude III (April 12, 2014); Another Perspective on Gratitude; (Nov. 23, 2015); Other Thoughts About Gratitude. (Nov. 26, 2015).

[7] Pandemic Journal (# 8): Reconnecting with Family and Friends (April 8, 2020).

[8] See, e.g., these posts to dwkcommentaries.com: The Roads Not Taken (April 27, 2011); My General Thoughts on Vocation (Feb. 6, 2014); Other Scriptural Passages About Vocation (Feb. 17, 2014); My Vocations (Feb. 23, 2014); Why I do Not Want to Die at 75 (Sept. 25, 2014); What Is Your Call Story? (Feb. 28, 2019); My Call Stories (Mar. 4, 2019). See also List of Posts to dwkcommentaries—Topical: RELIGION; A Christian-Muslim Conversation About Forgiveness (May 15, 2017).

[9] See, e.g., the following posts to dwkcommentaries.com: Pandemic Journal (# 3): 1918 Flu (Mar. 27, 2020); Pandemic Journal (# 22): Other Reflections on the Flu Pandemic of 1918-1920 (May 17, 2020).

Pandemic Journal (# 13): World Economic Depression

The COVID-19 pandemic has caused a global economic depression. Many people have lost their jobs. Stores are closing. Governments are facing huge reductions in tax collections and large deficits.

In the U.S. alone, as of April 18, 33 million people recently have filed applications for unemployment insurance benefits. Moreover, “Some economists expect a fresh surge of claims in future weeks as workers who were previously unable to file because of backlogged state systems are counted, and as states begin to accept applications from people who are newly eligible.” Economists believe that the national unemployment rate for April could reach 20%.[1]

On April 24, the U.S. Congressional Budget Office forecasted a $3.7 trillion federal government deficit, a 5.6% U.S. economic contraction and an unemployment rate of nearly 12% by year’s end.[2]

“Laid-off workers need money quickly so that they can continue to pay rent, and credit card bills and for groceries. If they can’t, the hole that the larger economy has fallen into ‘gets deeper and deeper, and more difficult to crawl out of.’” As a result, many banks are confronting defaults on loans and mortgages.

“Pain is everywhere, but it is most widespread among the most vulnerable. For example, 52 percent of low-income households — below $37,500 a year for a family of three — said someone in the household had lost a job because of the coronavirus, compared with 32 percent of upper-income ones (with earnings over $112,600) [while] forty-two percent of families in the middle have been affected as well. Those without a college education have taken a disproportionate hit, as have Hispanics and African-Americans.”

J.P. Morgan “sees GDP in the U.S. falling at an annualized rate of 40% in the three months through June, the eurozone tumbling 45%, with the U.K. economy expected to contract by 59.3% and Japan by 35%. Some forecasts are for a relatively quick rebound, though the outlook depends on how quickly and thoroughly the coronavirus can be contained.”[3]

On April 24, President Trump signed into law for $484 billion of relief for small businesses and hospitals and for expansion of coronavirus testing capacity.[4]

Here is local bit of good news. On April 27, the State of Minnesota will be allowing the opening of manufacturers and offices that don’t have face-to-face interaction with clients and weren’t deemed critical industries that were exempt from the stay-at-home order. Roughly 20,000 companies in this category with 100,000 employees now have the option to reopen if they complete and publicize plans to maintain social distancing, worker hygiene and workspace cleanliness. On the other hand, HealthPartners, a Minnesota-based nonprofit group operating seven hospitals, dozens of clinics and a large health insurance business, announced that it was furloughing 2,600 workers due to suspension of nonemergency surgeries.[5]

Bill Gates, the wealthy co-founder of Microsoft and now co-chair of the Bill & Melinda Gates Foundation, has said that the U.S. and other countries would be aided in returning to normal if we were able to make the following innovations. Create coronavirus tests that are self-administered. Adopt consistent standards about who gets tested. Implement consistent, reliable means for contact tracing. Voluntary adoption of digital tools that help one remember where you have been and whom you have contacted. Develop drugs for treating the virus. Develop a vaccine and a fair, effective way for its distribution and use.[6]

Conclusion

While I worry about all of the unemployed, their families and the general condition of the U.S. (and global) economies, I am grateful that I am retired and thus not personally involved in these wrenching struggles.

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[1] Chaney & Guilford, Millions of U.S. Workers Filed for Unemployment Benefits Last Week, W.S.J. (April 23, 2020;); Cohen, Jobless Numbers Are ‘Eye-Watering’ but Understate the Crisis, N.Y. Times (April 23, 2020); Siegel & Van Dam, 4.4 million Americans sought jobless benefits last week, as economic pain continued across the United States, Wash. Post (April 23, 2020); Rugaber, 26 million have sought US jobless aid since virus hit, StarTribune (April 23, 2020).

[2] The federal budget will be nearly $4 trillion in 2020, the C.B.O. says, N.Y. Times (April 24, 2020).

[3] Hannon & Sparshott, Global Economy Hit by Record Collapse of Business Activity, W.S.J.(April 23,2020).

[4] Duehren & Hughes, House Approves $484 Billion bill to Aid Small Business, Hospitals, W.S.J. (April 23, 2020).

[5] Olson & Horwatt, Restrictions could be lifted on up to 100,000 Minnesota workers by Monday, StarTribune (April 24, 2020); Snowbeck, COVID-19 fallout: HealthPartners to furlough 2,600 workers, StarTribune (April 24, 2020),

[6] Gates, Here are the innovations we need to reopen the economy, Wash. Post (April 23, 2020).

Immigrants Come to America to Work

This is the title of a column by Jason Riley of the Wall Street Journal. He concludes that indeed immigrants do come to work, not to go on the dole. He cites several reasons for this conclusion.[1]

First, they do not go to the states with the most generous public benefits like New York and California. Instead, the Brookings Institution’s analysis of census data, between 2010 and 2018 shows that “the five states with the fastest-growing foreign-born populations are North Dakota, South Dakota, Minnesota, Delaware and Iowa.” During that same period, South Dakota’s immigrant population grew by 58.2% while New York’s by only 3.5%.

Second, in 2018 the percentage of U.S. workers who were foreign-born reached its highest level since 1996 while its unemployment rate was 3.5%. versus 4% for the native-born. And the labor participation rate for the foreign-born was slightly higher, 65.7% versus 62.3%.This has occurred during a period of record low unemployment, contrary to the concern that immigrants were displacing the native-born.

Third, according to the libertarian Cato Institute, “the native-born make use of means-tested welfare and entitlement programs at significantly higher rates than their foreign-born counterparts.” Moreover, “immigrants are less likely to consume welfare benefits and, when they do, they generally consume a lower dollar value of benefits than native born Americans.”

Fourth, “the assumption that people who arrive poor will stay that way is ahistorical. Immigrants are self-selecting. The poorest of the poor can’t afford the trip, and the ones who do come tend to be more motivated and less risk-averse than nonimmigrants.”

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[1] Riley, Immigrants Come to America to Work, W.S.J. (Jan. 28, 2020).

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).