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Making America Stagnate Again

  

Category:  Stock Market & Investments

Via:  bob-nelson  •  9 months ago  •  5 comments

By:   Paul Krugman

Making America Stagnate Again



Deportations don’t create jobs and will increase deaths of native-born Americans.

Who knew?


original




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S E E D E D   C O N T E N T




A graph of a number of employees    AI-generated content may be incorrect.



Yesterday’s employment report was widely expected to be weak. As it turned out, it was unexpectedly strong, with an estimated 130,000 jobs added. But monthly job numbers are extremely noisy. If you read the details of the report from the Bureau of Labor Statistics, it actually said that its central estimate was 130,000 jobs ,  with the true number  lying between 7,700 and 152,000  (the 90 percent confidence interval that accompanies all its estimates). And for technical reasons not worth going into here, the true range of uncertainty is even bigger. Basically BLS estimates the  level  of employment based on a sample subject to sampling error, which makes the estimated  change  over any given month extremely noisy.

A better indication of how the economy is doing is job gains over the past year, shown at the top of this post (dashed green line). This is a lot less noisy than the monthly number, and it also happens to cover the first year of Trump 47. Since January 2025 the economy is estimated to have added 359,000 jobs, down almost 900,000 from job growth the previous year. This indicates that the job market is very close to complete stagnation. Furthermore, the only sectors that saw large job growth were health care and social assistance (solid blue line). Employment elsewhere declined. Manufacturing employment, notably, fell. So Trump’s economy is not exactly delivering the “manly jobs” that he promised.

Oh, and while both Donald Trump and  Scott Bessent  have recently asserted that construction jobs are booming, employment growth in construction, which  was  high under Biden, has in fact fallen precipitously:



A graph showing a line going up    AI-generated content may be incorrect.



Now, Trump officials have been vigorously spinning weak job growth on their boss’s watch. What’s interesting is the excuse for near-stagnation offered by both Kevin Hassett, the chair of the National Economic Council, and Peter Navarro, Trump’s trade czar: Job growth has stalled because of mass deportations.

Wait, what?

Since we’re talking about Trump appointees, some of what these officials said involved flat-out lying. Navarro, in particular,  declared  that “we’re deporting millions of illegals out of our job market” — ICE has “only” arrested around  393,000 people . He also disparaged strong job growth during the Biden years, saying

[A]ll of the jobs we were creating in Biden years were going to illegals. Americans were going to the unemployment lines.

There aren’t good data on how many jobs are going to illegal immigrants, but we do know that unemployment among native-born Americans  fell  under Biden but rose last year:



A graph with a line    AI-generated content may be incorrect.



Compulsive lying aside, however, the fact that Trumpists are attributing stalled job growth to reduced immigration is astonishing, because it’s an admission that the fundamental economic premise behind mass deportations was always false. After all, the claim was that immigrants were taking jobs away from the native born. Now MAGA officials are saying that deporting foreign-born workers reduces employment, which implies that previous immigration was creating new jobs, not taking them away.

So what are those mass deportations about, exactly? Oh yes, we’re getting rid of violent criminals — except that very few of those being swept up by ICE have violent criminal records, and crime rates among undocumented immigrants are actually low.

But while reducing the number of foreign-born workers may not help the native-born, does it actually hurt them? Yes.

There are two big reasons mass deportations and shutting out or scaring away future immigration will hurt the native born.

First is demography. Like every advanced nation and many developing countries, the U.S. has seen fertility decline below the rate needed to keep the population from shrinking, and growth in the working-age population and hence the potential labor force has already slowed to a crawl:



A graph showing a line    AI-generated content may be incorrect.



Source: OECD

However, the working-age population would already have been declining, Japan-style, without immigration — and although we don’t have reliable numbers, it seems likely that the Trumpists  have  effectively  cut off the inflow  of working-age immigrants.

Without those immigrants, who will pay the taxes that support Medicare and Social Security? True, immigrants place some demands on government services, but these are hugely outweighed by their contribution to government revenue, both through the taxes they pay directly and through their role in boosting economic growth. The Congressional Budget Office just released its latest fiscal projections; these have gotten substantially worse compared with a year ago, in part because the budget office is factoring in the negative effects of  reduced immigration .

In fact, CBO’s numbers probably understate just how extreme anti-immigrant policy has become. Also, the projection only extends for the next 10 years, and the adverse fiscal effect of cutting off immigration will be even larger further in the future.

Beyond worsening our already unsustainable fiscal situation, a cutoff of immigration raises the question of who will provide essential services to our still-rapidly-growing population of senior citizens:



A graph with a line going up    AI-generated content may be incorrect.



This demographic concern about immigration interacts with the second big reason reduced immigration hurts native-born Americans: We need immigrant workers to do jobs the native-born can’t or won’t do.

As I have repeatedly  pointed out , the available evidence suggests that immigrants are mainly complements, not substitutes, for native-born workers. Foreign-born workers aren’t evenly spread across the economy. They are, instead, concentrated in occupations where they make up a large share of the work force, so they aren’t really competing with non-immigrant workers, but are making some goods and services cheaper and more available than they would be without immigrants.

Examples of occupations in which immigrants play a crucial role include farm labor, meatpacking and other food processing, and construction. Foreign-born workers also play crucial roles in providing health care:


With healthcare facing severe labor shortages, cutting off the supply of immigrant workers will raise the cost and reduce the availability of care — which will be especially hard on seniors, who are 19 percent of the population but account for  more than 40 percent  of health expenditures.

A  new paper  by David Grabowski, Jonathan Gruber and Brian McGarry uses variation in immigration over time and across metropolitan areas to estimate the impact of immigration on the health care labor force. They find that the arrival of an extra 1000 immigrants leads to employment of an additional 28 aides, 49 nurses and 19 doctors.

This effect on the number of healthcare workers means, in turn, that increased immigration leads to lower senior mortality, and conversely that blocking immigration and deporting foreign-born workers will increase deaths among older Americans. A back of the envelope calculation using Grabowski et al’s numbers suggests that reducing the immigrant population by one million immigrants, which is what Stephen Miller wants to do every year, would lead to around 15,000 extra deaths per year among U.S. seniors.

Which brings me back to the stunning stagnation of job growth that has already taken place on Trump’s watch. Trump’s minions would have you believe that near-zero job growth is fine because immigration has plunged — even though they assured us that this wouldn’t happen. But the reality is that the war on immigrants, in addition to being a moral and civil liberties nightmare, will make native-born Americans poorer — and send thousands of us to an early grave.


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Bob Nelson
Professor Guide
1  seeder  Bob Nelson    9 months ago
... the reality is that the war on immigrants, in addition to being a moral and civil liberties nightmare, will make native-born Americans ... poorer — and send thousands of us to an early grave.

But the war on immigrants pleases the MAGA fascists, so it's fine!

 
 
 
Sean Treacy
Professor Principal
1.1  Sean Treacy  replied to  Bob Nelson @1    9 months ago
e native-born Americans ... poorer — and send thousands of us to an early grave.

We know illegals have sent thousands of Americans  to an early grave...

and of course, we know how much services were cut by local governments trying to pay for the Biden illegals that were migrating them. Those lost services cost lives too.

But hey, Democrats never seem to care about actual victims or costs, it's possible future ones that get them hot and bothered. 

 
 
 
evilone
Professor Guide
1.1.1  evilone  replied to  Sean Treacy @1.1    9 months ago
We know illegals have sent thousands of Americans  to an early grave...

and...

and of course, we know how much services were cut by local governments trying to pay for the Biden illegals that were migrating them.

Ummm... here's some actual facts from a libertarian (definitely not liberal) source. 

 Cato Study: Immigrants Reduced Deficits by $14.5 Trillion Since 1994

Illegal Immigrant Incarceration Rates, 2010–2023

Immigrants’ Recent Effects on Government Budgets: 1994–2023

But hey, Democrats never seem to care about actual victims or costs...

Yeah... We do have an immigration problem, but the way Trump and his MAGA cult followers are handling things is so... so... very wrong. It's a toxic nationalism born of racism and devoid of any sense of humanity, morality or intelligence. 

 
 
 
Sean Treacy
Professor Principal
1.1.2  Sean Treacy  replied to  evilone @1.1.1    9 months ago
some actual facts from a libertarian (definitely not liberal) sourc

CATO openly supports mass immigration and has for decades. Why would you think they have credibility? 

Democratic cities and states have  literally admitted the costs of caring for Biden's illegals were bankrupting them and causing them to cut services for citizens. That's documented reality, advocacy pieces by special interest groups are not.  

's a toxic nationalism born of racism and devoid of any sense of humanity, morality or intelligence. 

Progressives are literally attacking LEOs to protect child molesters. Accusing anyone else of those things is laughable. 

 
 
 
Trout Giggles
Professor Principal
1.1.3  Trout Giggles  replied to  Sean Treacy @1.1.2    9 months ago
That's documented reality, advocacy pieces by special interest groups are not.  

And I'm sure you can provide that documentation

 
 

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