Immigrants the Lifeblood U.S. Economy

 The Mortgage Corner

“For most of the past half-century, adults in the U.S. Baby Boom generation – those born after World War II and before 1965 – have been the main driver of the nation’s expanding workforce. But as this large generation heads into retirement, the increase in the potential labor force will slow markedly, and immigrants will play the primary role in the future growth of the working-age population (though they will remain a minority of it).” PEW RESEARCH

PEW

I wrote in 2017 that the stakes are enormous if Republicans succeed in removing most of the estimated 11 million undocumented worker (only half of which are from Mexico and the Latin countries), and cut legal immigration in half, as they have promised to do, economic growth will plummet, since it is mainly based on growth of the working age population, as well as labor productivity, which has also fallen since 2000.

America has always had a labor shortage. It’s the reason we have needed immigrants and led in technology to keep our production levels high. And as the 2017 PEW study above highlights, immigrants have been at the core of our national workforce.

This is while the Trump administration continues to trip over itself in every economic sector, repeating the same mistakes it made during Trump’s first term. This is not only with its tariff policy—negotiating with China to lower their tariffs, though China says they are not currently in talks—but is especially true with its immigration policy that is designed to please its MAGA base.

It's pleasing no one else. Former Labor Secretary Robert Reich reports on Substack that one American was detained by ICE in Arizona for 10 days until his relatives produced papers proving his citizenship, because ICE didn’t believe he was American. Meanwhile, ICE handcuffed and deported a group of German teenagers vacationing in Hawaii because they turned up without a hotel pre-booked, which ICE found “suspicious.”

The number of adults in the prime working ages of 25 to 64 – 173.2 million in 2015 – will rise to 183.2 million in 2035, according to Pew Research Center projections. That total growth of 10 million over two decades will be lower than the total in any single decade since the Baby Boomers began pouring into the workforce in the 1960s. The growth rate of working-age adults will also be markedly reduced, says the study.

The Biden administration’s record growth was based in large part because of the immigration surge that Trump is attempting to reverse, but that Trump characterized as criminals to stir up his MAGA base. There was no crime wave; records show immigrants commit fewer crimes than American citizens.

So Trump is creating a worker shortage when he wants to bring back manufacturing. Who will replace the immigrants? We need to develop more labor-saving technologies, which means developing better computer chips that Biden has already funded for more Research and Development grants and the CHIPs Act, but will take time to develop.

Trump has no plan of his own, other than slash the government programs that would create newer technologies, nor is anything being done at the congressional level, except pushing for more tax cuts. This was his only accomplishment during the first Trump administration.

It’s a sad day when Trump, Republicans and his MAGA supporters see immigrants as threats when they are the only readily available resource that will grow our economy.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Strong Retail Sales, Job Growth in 2017?

Financial FAQs

The prospects for 2017 growth are confusing, to say the least. For instance, will Prez-Elect Trump initiate multiple trade wars by pushing through tariffs on foreign imports to bring manufacturing jobs home to the U.S.? And will this cause the dollar’s value to continue to rise, thus harming the resulting exports, which could cancel out much of the benefits of bringing manufacturing jobs home (since manufacturing sector depends largely on exports)?

Graph: Econoday

But retail sales should benefit from the post-election rise in consumer confidence, though mostly via online sales (since prices are generally lower for online goods). Econoday reports non-store sales rose 1.3 percent in December for a year-on-year rate of 13.2 percent, among the very best showings and last exceeded in November 2011. So, taking in the whole and not just ecommerce or autos, there's more off notes than on notes in the December retail sales report, per Econoday. Consumer spirits may be very high and if this benefited retail sales in December, it was mostly isolated to vehicles when looking at in-store sales.

And there's already plenty of jobs out there, exactly 5.522 million of them in November, as I said last week. This against only 5.160 million hires in the month, a wide gap over the last couple of years as employers find it difficult to fill slots.

But get this, Econoday also says if each of those 5.522 million jobs were immediately filled, the number of unemployed would fall to 1.887 million for an unemployment rate of 1.2 percent, which will never happen. There are too many working-age adults who either won’t or can no longer work due to disabilities, lack of employable skills and the like.

Widening out the definition of unemployment (i.e., to those not even looking for work) does soften the view of labor slack but even here the pool of available workers, at 13.2 million in December, is shrinking, down from 14.0 million as recently as September.

Graph: Econoday

So the 2017 growth picture is still too fuzzy to see clearly. Consumer and business optimism can change to pessimism in a flash; or a Tweet.

Harlan Green © 2016

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Where’s the Outrage, Mr. President?

Financial FAQs

Where’s the outrage, Mr. President, when the New York Times just reported that at least 250 Disney World employees have been discharged, with many forced to train their own foreign replacements that have temporary H-IB work visas? Those are visas that are supposed to supply foreign workers where no American workers can be found. Yet Disney discharged those supposedly ‘irreplacable’ American data managers, in order to replace them with foreign workers.

Where’s the outrage when this is not even a “loophole” as characterized by the NYTimes, but flagrant violation of federal guidelines for the H-1B visas? And this during a jobless recovery from the worst depression since the Great Depression?

The Times reported the legal requirements for eligibility of such work visas.  According to federal guidelines, the visas are intended for foreigners with advanced science or computer skills to fill discrete positions when American workers with those skills cannot be found.

Their use, the guidelines say, should not “adversely affect the wages and working conditions” of Americans. Because of legal loopholes, however, in practice, companies do not have to recruit American workers first or guarantee that Americans will not be displaced.

“The program has created a highly lucrative business model of bringing in cheaper H-1B workers to substitute for Americans,” said Ronil Hira, according to the Times article, a professor of public policy at Howard University who studies visa programs and has testified before Congress about H-1B visas.

As if to compound the hurt for American workers, former employees said “many immigrants who arrived were younger technicians with limited data skills who did not speak English fluently and had to be instructed in the basics of the work.”

This is not the first time you didn’t speak out for American workers, Mr. President. You were also conspicuously silent during the reelection of Wisconsin Governor Scott Walker, when he turned Wisconsin into a right to work state and banned collective bargaining of public workers, which has reduced union membership drastically.

This is even though Wisconsin was one of the first states to establish unions and the right to collective bargain, which should be the right of every worker employee.

So when will you finally begin to lead the support for working Americans whose incomes haven’t really risen since the 1970s (when inflation factored in), and wealth virtually destroyed from the busted housing bubble?

“Many American companies use H-1B visas to bring in small numbers of foreigners for openings demanding specialized skills, according to official reports,” said the Times. “But for years, most top recipients of the visas have been outsourcing or consulting firms based in India, or their American subsidiaries, which import workers for large contracts to take over entire in-house technology units — and to cut costs. The immigrants are employees of the outsourcing companies.”

You should be lauded for Obamacare, and the many other programs you support for the poorest Americans, but what about skilled American workers that are still losing their jobs through no fault of their own?

And now you want U.S. workers to trust your word that the Trans-Pacific Partnership trade agreement will be good for American workers, not just American corporations?

Harlan Green © 2015

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen