No U.S. Population Growth for Six Months?!?!

March 21, 2017

As part of my monthly calculation of the size of the actual labor force (for the purpose of analyzing the monthly employment report), I use the U.S. population as determined by the “Population Clock” on the home page of the U.S. Census Bureau.  As I write this, it stands at 324.73 million.  This figure typically grows at the rate of about 180,000 per month.  That’s a scary rate of population growth.  The U.N. estimates that half of all world population growth by 2050 will be caused by the growth of the population in only eight nations – seven third world nations and – you guessed it – the United States, the only developed nation that continues to experience third-world-like population growth.

But I’ve noticed something strange in the last six months, and especially since the beginning of the year.  In December, the population clock actually fell back by almost 600,000.  Since then, the population has been growing at a rate of only about 80,000 per month.  Today, it stands at almost exactly the same level as it did at the end of September.

This is great news, but I suspect that some of the reason for the slowdown is not good news.  You may recall that sometime back around December, the CDC announced that death rates in the U.S. were rising while life expectancy had actually declined slightly.  But there’s some really great news too.  Illegal immigrants are being deported and the entry of new illegal immigrants has slowed dramatically.  Even legal immigration has slowed since Trump took office.

Although it’s still early in this new trend, a couple of observations are in order:

  • Most economists predict economic gloom and doom to accompany a lack of population growth.  Contrary to that, the U.S. economy has experienced its best growth in many years in the past six months.  A brightening economic outlook is one of the outcomes I predicted in Five Short Blasts that would accompany a stabilizing or even declining U.S. population.
  • A rising death rate is another outcome that I predicted in my book for nations whose population densities continue to grow beyond a critical level, driven by rising unemployment and poverty.

This is all something I’ll be watching closely as immigration continues to slow dramatically during the Trump administration.


February Employment Report: “Real” or “Fake?”

March 15, 2017

The employment report for the month of February (the first full month of the Trump administration) was released on Friday and the numbers looked pretty good.  The economy added 235,000 jobs and the unemployment rate fell one tenth to 4.7%.  President Trump hailed the news and declared that, though the employment reports during the Obama administration were fake, that the February numbers were very real.

Let’s examine that claim.  First of all, take a look at this chart:  Labor Backlog.  Some explanation is in order.  “Actual labor force growth” is the growth in the labor force if it had grown at the same rate as the overall population as it does in reality.  The “BLS reported labor force growth” is the growth in the labor force that the Bureau of Labor Statistics uses to calculate the unemployment rate.  The “change in employment level” is a figure taken directly from the BLS monthly data.  It’s the growth in the number of people who report being employed in the household survey.  The “labor force backlog” is the difference between the growth in employment level and the “actual labor force growth.”  If the employment level grows faster, then unemployment should decline along with the “labor force backlog.”

Note that during the Obama years, the BLS consistently reported less growth in the labor force than what the growth in the population would suggest.  Only in 2012 and 2015 did the BLS report labor force growth that was slightly above actual growth.  The result is that the “labor force backlog” grew steadily during the Obama administration until it peaked at the end of 2014 at 6,359,000 workers who were unemployed.  By the end of 2016, that backlog had fallen only slightly to 5,994,000 workers.  In spite of that, according to the BLS, the unemployment rate plummeted from 9.9% in 2008 to 4.7% in 2016.  That’s impossible and the only way that the BLS was able to make it appear that the unemployment rate was dropping was by claiming that workers were dropping out of the labor force or by not growing the labor force as the population grew, or through some combination of those factors.  Thus, when Trump claimed that the employment data was “fake” during the Obama administration, he was exactly right.  If you’ve been a follower of this blog, you know that it’s something that I maintained all along throughout the Obama administration.

OK, so how about Trump’s claim that the numbers now are “real?”  So far, in January and February, the BLS has reported growth in the labor force of 416,000 workers.  The actual growth in the labor force – if it grows in proportion to the population – is only 89,000 workers.  In other words, so far in 2017, the BLS now claims that 327,000 “missing” workers have reappeared in the work force.  That supports Trump’s claim that his numbers are real.  But time will tell.  Two months’ of data isn’t nearly enough to judge how honest the Trump administration is being when it comes to the employment reports.  It’s something I’ll watch just as closely as the Obama numbers.


Closing the Book on Obama’s Trade Policy

March 8, 2017

The U.S. trade deficit for the month of January was posted yesterday by the Bureau of Economic Analysis.  It was horrible.  President Trump took office on January 20th, but he can hardly be held responsible for any of the January results.  This is all on former President Obama.

How bad was it?  The overall trade deficit rose to its worst level in nearly five years – $48.5 billion.  At $62.1 billion, the deficit in manufactured goods just missed its all-time worst reading of $62.5 billion set in March of 2015.  As you can see from this chart, if the trend in manufactured goods continues, we’ll have a new record very soon and, without the change in trade policy promised by President Trump, it will likely get worse from there:  Manf’d Goods Balance of Trade.

Then there’s the export numbers.  In January of 2010, lacking the courage to take on the problem with imports, President Obama vowed to double exports in five years in an effort to turn the U.S. into more of an export-driven, Germany-like economy.  It never happened and never even came close.  In January of 2017 – seven years after Obama made that promise – total exports, at $192 billion – remained below the October, 2013 level.  Worse yet, exports of manufactured goods were below the level reached in September, 2011 – up only 26% from when Obama made that promise.  And that increase was due entirely to global economic recovery from the 2009 recession and had nothing to do with any real improvement in America’s export position.

So that closes the book on Obama’s trade policy, which was a total failure.  Actually, if President Trump follows through on his promise of tariffs (or border tax, or whatever you want to call it), this closes the book on a seven-decade-long experiment with free trade and globalization, begun in 1947 with the signing of the Global Agreement on Tariffs and Trade that, by any measure of its effect on the American economy, has been a complete disaster.

  • America’s trade surplus dwindled until we ran our last trade surplus in 1976.
  • 41 consecutive years of trade deficits has yielded a cumulative deficit of $14.4 trillion.  During that time, the national debt, which is closely linked to the trade deficit, grew by $19.4 trillion.  In 1976, the national debt was only $0.5 trillion.  Virtually all of our national debt is due to the cumulative trade deficit since 1976.
  • During this period, family incomes and net worth have declined, our infrastructure has crumbled, and our nation has been bankrupted.  The manufacturing sector of the economy has been gutted.  More than ten million manufacturing jobs have been lost.  The United States, once the world’s preeminent industrial power, has been reduced to a skid-row bum, begging the rest of the world to loan us money to keep us afloat.

This is all on you now, President Trump.  You own it.  You’ve promised to straighten out this mess.  America is watching and waiting.


Student Visas

February 24, 2017

The subject of student visas aggravates me as much as illegal immigration (although we’re finally getting some great news on that front).

Why?  “What’s the problem with student visas?” you might ask.  For most, the topic probably conjures up images of foreign exchange students coming to the U.S. to experience life here and return home to spread the news about what a great place the U.S. is and to help spread our value system around the world.  Or maybe you envision students coming here for an education that can be put to work back home in some underdeveloped country, helping to raise living standards there.  But the reality of the situation is nothing like this.  The student visa program boils down to money.  It’s a system designed to suck trade dollars back into the U.S. economy and to prop up inflated tuitions.

Let’s begin with some data.  Here are the statistics for non-immigrant visas issued from 2011 through 2015.  (The data for 2016 is not yet available.)  Student visas are primarily “F” visas.  “M” visas are for vocational students.  Taken together, they totaled nearly 700,000 in 2015.  These are “non-immigrant” visas, but don’t be fooled.  A large percentage of these students receive immigrant visas (leading to permanent status) almost automatically upon graduation.

Where do these students come from?  About 280,000 came from mainland China.  75,000 came from India.  28,000 came from Saudi Arabia.  27,000 came from South Korea.  17,600 came from Vietnam.  An equal number came from Mexico.  17,000 came from Japan.  The rest are spread across the remaining nations of the world.  The significance of this list will be discussed later.

To get an idea of what the student visa program is really about, take a look at this web site, which provides information for foreign students for how to apply:

https://www.studyusa.com/en/a/33/how-to-get-your-u-s-student-visa

What it boils down to is this:  you have to explain why you want to study in the U.S. and, more importantly, you have to prove that you can pay for it.  There’s no student loan program here, at least not through U.S. agencies.  If you can get scholarship money from your native country, fine, but regardless of how you get the cash, you have to be able to pay your way.  You must also declare your intent to return to your home country when you’re finished with your studies.  But that’s a formality, one easily skirted when you actually get your degree.

In 2015, over 677,000 “F” visas were issued.  223,000 applicants were refused.  In other words, about three quarters of all applicants are accepted.

Now, let’s take a look at some interesting findings about the student visa program published in a study by the Brookings Institution in 2012.  Here’s the link:

https://www.brookings.edu/interactives/the-geography-of-foreign-students-in-u-s-higher-education-origins-and-destinations/#/M10420

“From 2008 to 2012, 85 percent of foreign students pursuing a bachelor’s degree or above attended colleges and universities in 118 metro areas that collectively accounted for 73 percent of U.S. higher education students. They contributed approximately $21.8 billion in tuition and $12.8 billion in other spending—representing a major services export—to those metropolitan economies over the five-year period.”

Got that?  They paid full tuition and living expenses, bringing over $33 billion into the economy.  And that was through 2012.  In 2015, when 25% more visas were issued than in 2012, that figure rises to over $42 billion.

Two-thirds of foreign students pursuing a bachelor’s or higher degree are in science, technology, engineering, mathematics (STEM) or business, management and marketing fields, versus 48 percent of students in the United States.

Remember how tech companies claim that they depend heavily on immigrants to provide the advanced skills that they need?

Forty-five (45) percent of foreign student graduates extend their visas to work in the same metropolitan area as their college or university.

In other words, these students then go on to become the H1-B visa workers that the tech industry (and many others) claim that they need.  So the “non-immigrant” nature of student visas, and the declaration of intent to return to their home country, is truly a joke.  Here’s further evidence that student visas are used as the pipeline for H1-B visas:

http://www.h1base.com/content/f1visa

These companies who claim that they’re dependent on immigrants for the skills they need are trying to pull the wool over your eyes.  What they need are STEM graduates and they get them from American universities.  They like the fact that foreign students contribute to a glut of labor that helps to keep their payroll costs suppressed.  When Apple claims that, if immigrants aren’t allowed to travel freely to work in the U.S., then they might need to relocate to where they can have easier access to immigrant labor, that’s a “crock” and they know it.  Go ahead, Apple, move to Yemen or  Iran or Libya or one of those other countries, and let’s see how successful you can be there.  What you really need are the STEM graduates of American universities.  You won’t find them in those other places.  But what you will find are poverty, illiteracy and oppressive governments.  But you say you can do better there.  So prove it.  Just leave.  Go ahead.  Go.

There’s a mind-numbing amount of information in these links.  Let’s boil it all down:

  • Immigrants currently fill 1.2 million of the seats available in American universities.  That’s a significant percentage of the seats available.
  • Approximately three quarters of foreign students who apply are accepted.  Compare that to the acceptance rate for American students at most prominent universities, where only 10% or fewer attain admission.
  • Why the preference for foreign students?  Because they pay full tuition, propping up the ridiculous rate of tuition increases.
  • Foreign students are given preference over American students because of their ability to pay.  This effectively shuts American students out, especially from STEM curricula.
  • The influx of foreign students actually counts as an export of services.  Can you believe that?  It’s one of the tricks used by the government to draw trade dollars back into the U.S. economy and to keep our trade data from looking even worse than it does.
  • University sports teams have also gotten in on the act, now recruiting foreign students through the “student” visa program, denying athletic scholarships to deserving American athletes.  When it comes time for the Olympics, those athletes, trained in America, compete for their home countries, leaving the American teams thin.
  • Almost half of foreign students then go on to work in America, shutting American students out of those jobs as well.
  • The student visa program feeds into the H1-B visa program, which then begins to feed many of the other immigrant categories such as immediate relatives and family-sponsored preferences.

OK, remember the above list of countries that send the most students?  Did you notice anything about that list?  Did you notice that it includes the countries with whom America has the biggest trade deficits?  That should give you a clue as to where these foreign students are getting the money they need for tuition.  Their parents are getting rich on manufacturing for export to the United States.  What this means is that, in addition to taking your job, they then use your money to pay for their kids to come over here and take your kids’ jobs too!  Can this scheme possibly get any more outrageous?

If you’re an American student who hasn’t been able to get accepted into the school or program of your choice, the student visa program is probably the main reason.  If you’re a recent graduate and find yourself now saddled with crushing student loan debt, you can blame the student visa program for propping up ridiculous tuition rates.  And if you now find yourself struggling to find a job, you can once again blame the student visa program.

The student visa program is an outrage perpetrated on unsuspecting parents and students, depriving them of opportunities to help America out of its trade-created cash crisis, to help greedy universities prop up inflated tuition rates and to help corporations suppress wages with a labor glut.  It has to stop.  No foreign student should be admitted until every last American kid who wants a college education has gotten a seat in a university.  President Trump … please … take a close look at the student visa program and rein it in.


U.S. Immigration – A Little Perspective

February 18, 2017

A lot of claims are made about immigration, especially by those supportive of high rates of immigration into the U.S., no more so than recently.  “We are a nation of immigrants.”  “Our high tech industry needs the special skills that immigrants provide us.”  “Immigrants are ambitious and innovative; 25% of all small businesses are started by immigrants.”  “Immigration boosts our economy through diversity.”  And so on.

Are these claims true?  Do immigrants possess some sort of mystical economic powers lacking in the native-born American population?  Or are these claims mostly hyperbole designed to support some other agenda?

First of all, let’s look at the evidence.  The claim that “we need immigrants to have a viable, vibrant economy” is similar to the claim that “we need free trade in order to have a viable economy.”  Both statements fail the most basic test of logic.  If these statements were true, then it would be impossible for humankind to have a viable economy since we have no trade with or immigrants from other planets.  Think about it.  In order for such a statement to be valid, it has to hold true regardless of how big you draw the circle around any given group of people.

If immigration is critical to a vibrant economy, how does one explain that, of the five largest economies in the world, three rank near the bottom in terms of migration rate?  China, the largest economy in the world and ranking in the top seven percentile in terms of its rate of economic growth, ranks in the bottom half in terms of migration rate.  India, with the fourth largest and seventh fastest-growing economy in the world ranks 84th in terms of migration rate.  And Japan, with the fifth largest economy in the world (but among the slowest-growing economies in the world) ranks 86th in terms of migration rate, with a rate of zero per 1,000 people.  In fact, of the 222 nations on earth, 151 nations have a net migration rate of zero or less.  (Less indicating that they have a net outflow of people.)  Clearly, immigration is no factor at all in determining the health of an economy.  That’s not to say that there aren’t instances where immigrants do, in fact, provide some special skills that are needed by companies and other institutions, but to extrapolate that to mean that more is better simply doesn’t stand up to the data.

There has also been a recent trend in holding up Europe as a shining example of tolerance toward immigration while berating the U.S. for its efforts to reign it in.  If we are to believe the news reports, the European Union (EU) has welcomed an absolute tidal wave of immigrants from the Middle East and Africa, while the U.S. deports and talks of building a wall.  Let’s look at the facts.  In 2014, approximately 284,000 “refugees” arrived in the EU, which has a population comparable in size to the U.S.  In 2015, that number exploded to 1.82 million.  In 2016, the EU began “closing the door” and the number of refugees fell back to below the 2014 level, for a total of about 2.3 million over the course of three years.

Compare that figure to the U.S. where over a million illegal immigrants have crossed our southern border year in and year out for decades, while the U.S. admitted legal immigrants at about the same rate – a million per year – for a net influx of two million immigrants per year for as long as most of us can remember.  The fact is that Europe’s rate of immigration is dwarfed by what the U.S. has accommodated for far, far longer.  Yet, we are to see the EU as a shining example of tolerance for immigrants while the U.S. is depicted as intolerant and bigoted?  Give me a break!

This is a good time to take a closer look at legal immigration into the U.S.  Here’s the State Department’s statistics on visas issued for the 2012 – 2016 time frame.  As you can see, the number of immigrant visas issued has grown by about 50% over the past four years to nearly 618,000.  But take a look at the “non-immigrant category,” which is visas issued for temporary stay.  These are running close to eleven million per year – 13 million when you include “B1/B2 Border Crossing Cards.”  That sounds alarming at first, but let’s take a look at what these are.  Here’s a listing of the non-immigrant visas, broken down by category.  (The data for 2016 isn’t available yet.)  The vast majority of non-immigrant visas are for temporary visits for  business and pleasure.  However, there are a couple of categories that we do need to be concerned about:  F and M visas for students, which totaled nearly 700,000 in 2015, and H visas for “temporary workers.”  We’ll come back to that.

Let’s take a look at where most of the people migrating to the U.S. originate.  In 2016, of the 617,752 immigrant visas issued, 249,000 were immigrants from Asia.  Most of these were people from China, the Philippines, Vietnam and India, in that order.  222,000 were from North America, predominantly Mexico, followed by the Dominican Republic.  Most of the remainder were from Africa, spread across most African countries.  If you’re interested, here’s the complete breakdown from the State Department.

As you can see, the vast majority of people who immigrated to the U.S. in 2016 came from rather poor nations.  So how are we to believe that they possess some kind of mystical economic powers, or come to the U.S. with skills and education that just can’t be found among native-born Americans?  When you look at all the facts, such claims are clearly nonsense.

The fact is that immigrants bring nothing more to the table than do native-born Americans.  They are just people – no different than the rest of us.  As such, in the final analysis, there is only one real effect of immigration, and that is to grow the population.  And if that is the only effect of immigration, then any discussions of the merits of immigration that don’t begin and end with questioning the wisdom of growing our population are ruses, meant to confuse us in the hope of advancing some other agenda.  Like what?  Like using population growth to prop up economic growth, to drive consumer demand, to suppress wages and to fatten corporate bottom lines, just to name a few.

Putting a halt to illegal immigration and deporting those who have already entered illegally is a no-brainer.  A country that doesn’t control its borders is no country at all.  The real question is whether our current rate of legal immigration is appropriate.  Do we need to be growing our population?  In light of the relationship between population density and declining per capita consumption and rising unemployment, do we really need more people?  In light of the seemingly insurmountable challenge posed by global warming, do we really need more carbon emitters?  Is it appropriate for the U.S. to function as a population relief valve for other overpopulated nations?  Or are we merely exacerbating all these problems?

The time has come to begin scaling back the rate of influx of immigrants.  But where do we begin?  Legal immigration is like a pipeline that the longer the tap stays open, the faster the flow becomes.  Believe it or not, the place to start is not by trying to close the tap, but by slowing the source that fills the pipeline.  What I’m saying is that we need to begin with a hard look at student visas.  In my next post, we’ll take a close look at how student visas are driving all of the other classes of immigrants and the harm being done to our young people and our workers.  Stay tuned.

 

 

 

 


Bill Clinton on Illegal Immigration

February 14, 2017

Immigration is a subject that I’ve mostly neglected, while I’ve devoted most of my time to railing against idiotic U.S. trade policy.  In the wake of the first weeks of the Trump administration, however, the time seems right to interject a little perspective into the debate.

Over the past half century or so corporations, and their deep pockets used to fund political campaigns, have turned the subject of immigration into a growth industry.  They have used a tidal wave of immigrants to bolster their balance sheets by providing a surge in consumer demand for products and a surge in labor supply that has suppressed wages.  Legal immigration has exploded and illegal immigration has gone from a criminal activity to practically being a human right.  Americans were once almost unanimously opposed to illegal immigration and both parties opposed it, the right more than the left.

Today, it’s completely different.  The political left advocates “open borders,” and the right is almost at that point as well, barely distinguishing itself from the left with a thin veneer of support for some kind of legal process.  Against that backdrop, Trump looks downright radical now and the political left’s reaction to his early attempts to reign in illegal immigration have bordered on hysteria.

So it’s worthwhile to take a look back at Bill Clinton’s State of the Union address in 1995.  In this excerpt from his 1995 State of Union address, Clinton calls for exactly the kind of crack-down on illegal immigration that Trump has now begun to execute.

Too bad that Trump didn’t use this clip in a campaign commercial.  Nothing further needed to be said, other than “I’m Donald Trump and I approve this message.”

More perspective on immigration will soon follow.


Corporate Whining Over Immigration

January 30, 2017

http://www.reuters.com/article/us-usa-trump-immigration-companies-idUSKBN15C0SC

As reported in the above-linked article, the corporate whining about the scale-back in immigration that President Trump began with his travel ban aimed at seven high-risk nations has begun.

While one can criticize the clumsy, sledge hammer approach to the ban, which should have allowed travel by people with valid green cards and should have allowed already-issued visas to simply expire while implementing a moratorium on new visas, the self-serving objections by the global corporations should be dismissed out-of-hand.  It’s not this travel ban that concerns them.  It’s the coming fight over the whole H-1B visa program that they use to suppress wages in the U.S. with cheap foreign labor.

That program, along with the heavily abused student visa program which fills the pipeline that supplies it, has  for decades been a major millstone around the neck of young American workers trying to get a start in life.  The student visa program is used to fill the seats of American universities with foreign students, keeping those seats in short supply for American students and propping up the sky-rocketing rate of tuition increases.  It’s the major reason that young Americans are saddled with so much student debt.  Global corporations then use those graduates to staff their American operations and suppress their labor costs.

Those people protesting the travel ban are likely the same people who rightfully are part of the whole movement that protests the truly immoral situation with income inequality.  It would be interesting to poll those people protesting Trump’s ban about their own financial status.  How many are saddled with crushing student debt?  How many can only dream of having a job like those held by these immigrants?  Does it not occur to them that they are merely pawns in the whole globalization scheme that is actually the root cause of income inequality, especially in the U.S.?

The protest of these CEOs that they have to rely on immigration for high-skilled workers is an insult to American workers.  I hope that President Trump soon turns his focus on slashing both the H-1B visa program and the student visa program.