Over the past couple of weeks, the Trump administration and its allies have been engaging in a lot of wishful thinking. Fresh off the strong second quarter economic growth number of 4.1 percent, Trump told a gathering of business leaders next quarter “could be in the fives.” Not content to rest there, the President echoed his campaign pledge by proclaiming, “I really think we can go much higher than in the fives once we get trade deals that are rational, and sane, and good to our country.” Meanwhile, NBC News reported Team Trump marked the one-year anniversary of its proposal to slash legal immigration in half by revealing it will seek to “make it harder for legal immigrants to become citizens or get green cards if they have ever used a range of popular public welfare programs, including Obamacare.” That was doubtless music to the ears of Fox News host Laura Ingraham:
“In some parts of the country, it does seem like the America we know and love don’t exist anymore. Massive demographic changes have been foisted upon the American people. And they’re changes that none of us ever voted for and most of us don’t like.”
Well, as Mick Jagger famously put it, “You can’t always get what you want.”
That was the message—both direct and indirect—from the nonpartisan Congressional Budget Office (CBO) this week. While America’s budget scorekeeper forecast annual, inflation-adjusted gross domestic product (GDP) will expand by 3.1 percent for this year, “in 2019, the pace of GDP growth slows to 2.4 percent in the agency’s forecast as growth in business investment and government purchases slows.” Worse still, as the top chart above reflects, “from 2023 to 2028, real GDP is projected to grow by about 1.7 percent each year.” And that’s a real problem for a president who promised to “to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth.” After all, to hit those targets (see the second chart above), Donald Trump will have to oversee a massive jump in productivity or a huge expansion in the labor force. And that means a lot more immigration, not less.
To fully appreciate the magnitude of Trump’s conundrum, a little historical context is in order: No American president since Lyndon Johnson averaged 4 percent GDP growth over his tenure in office.
As for the GOP, no Republican president has averaged 4 percent economic growth in our lifetimes.
Here’s why. Economic growth, as Neil Irwin of the New York Times helpfully it up in September 2016, results from the growth of the labor force and the improvement of its productivity:
As a simple matter of arithmetic, G.D.P. boils down to how much people are working, and how much economic output is generated for each unit of work…The more workers you have, the more hours people will work and the more stuff you’ll make.
But G.D.P. growth isn’t just about demographics and work force trends. It also depends on how effective businesses are at converting human labor into economic output. In a word, productivity.
Unfortunately for the United States, neither the labor force nor American productivity is growing at the rates needed to routinely hit the four percent GDP level regularly achieved by the U.S. economy between 1950 and 1973. During that post-World War II boom, the American workforce grew by 1.6 percent while productivity gains (from new technology, process improvements, greater workforce skills and other innovations) averaged a staggering 2.4 percent per year. As the Center on Budget and Policy Priorities warned during the 2016 election, CBO was forecasting only 1.9 percent GDP growth between 2016 and 2016, with the labor force anticipated to grow by only 0.5 percent each year over the ensuing decade.
Now, the U.S. unemployment rate has continued to drop over the past two years. And among “prime-age” workers aged 25 to 54, the participation rate of 82 percent is already nearing the high water marked set in 2000. But the overall labor force participation rate of 62.9 percent has been basically flat since 2014. The Congressional Budget Office expects that level to remain steady through 2022.
Even with the growing demand for workers, the problem, CBO warns, is that “demographic pressures” will “continue to push down the rate’s long-run trend.” To put it another way, America is getting much older, very quickly.
As the Census Bureau reported in March, in 2016 America’s population of 323 million included 49.2 million people (or 15 percent) ages 65 and older. With the aging of the Baby Boomers, that percentage will jump to 17 percent by 2020 and 21 percent (or 73.1 million people) by 2030. By 2060, the United States is forecast to have over 400 million people; 94.7 million (23 percent) will be 65 and older.
Two years ago, Irwin estimated Trump would still be short 18 million workers of achieving his goal. With CBO forecasting annual productivity growth at 1.4 percent from 2018 to 2028 and yearly labor force growth only 0.5 percent, the president has only two options. As Irwin explained, neither will be very appealing to his base:
One option would be to encourage people to work until a much older age. Sorry, Grandpa, you may need to go back to work so President Trump can hit his employment target.
Another option is to substantially increase immigration levels above currently forecast levels. That is, of course, inconsistent with other dimensions of the Trump policy agenda. Indeed, if he follows through on plans to deport millions of immigrants working illegally, that would make hitting the job and G.D.P. growth goals that much harder.
Turning to Grandpa—and Grandma—doesn’t seem like much of an option at all, and not just because the overall labor force participation rate seems stuck just below 63 percent. As Vox documented, studies from the RAND Corporation, the International Monetary Fund, and other researchers have found that an aging labor pool holds back economic growth because “that older workforces are less productive on a per-worker basis.” As for much less productive, RAND estimated that two-thirds of the GDP loss due to an aging work force could be attributed the older workers’ reduced productivity.
So, short of a not-yet-foreseen, magical transformation of American productivity, the United States will need more immigrant workers—millions of them—now and for the foreseeable future. Even as undocumented immigration across our southern border remains at a fraction of its high over a decade ago, in 2016 some 1.18 million people were granted permanent lawful residence in the United States. Again, note that legal immigration foes like Donald Trump, Sen. Tom Cotton of Arkansas, and Rep. Bob Goodlatte of Virginia want to reduce that number to only about 500,000 per year. And while Mexico remains the No. 1 source of these legal immigrants, China (2), India (3), the Philippines (4), and Vietnam (6) have fueled Asia’s replacement of Latin America as the largest sending region of migrants to the United States. The result, the Census Bureau concluded in “Demographic Turning Points for the United States: Population Projections for 2020 to 2060”:
By 2028, the foreign-born share of the U.S. population is projected to be higher than any time since 1850.
That still won’t be enough—not, that is, if Donald Trump expects to get anywhere near his goal of 4 percent annual economic growth. And America will need those extra immigrants, whether people like Laura Ingraham like those “massive demographic changes” or not.
And contrary to the unbearable whiteness of being Laura Ingraham, most Americans did vote for those changes, at least with their reproductive organs. As Vox recently reported:
The number of births in the US dropped by 2 percent between 2016 and 2017, to 60.2 births per 1,000 women ages 15 to 44, continuing a general downturn that started with the Great Recession of 2008. It’s the lowest the fertility rate has been in 30 years.
Whatever the combination of factors (such as the impact of the recession, lack of child support resources, greater availability of contraception, etc.) driving the fertility rate further below the replacement level of 2.1, in the future the United States will not be a whiter shade of pale. Already, as Ezra Klein documented last month, “the most common age for white Americans is 58, for Asians it’s 29, for African Americans it’s 27, and for Hispanics it’s 11.”
In 2004, only four states saw the number of deaths of white residents exceed the number of births. By 2016, the number of states with declining white populations reached 26.
As Klein explained in the “Browning of America,” the demographic changes in the United States are coming fast and furious:
The government predicts that in 2030, immigration will overtake new births as the dominant driver of population growth. About 15 years after that, America will phase into majority-minority status — for the first time in the nation’s history, non-Hispanic whites will no longer make up a majority of the population.
That cross will come in part because America’s black, Hispanic, Asian, and mixed-race populations are expected to grow — indeed, the Hispanic and Asian populations are expected to roughly double, and the mixed-race population to triple. Meanwhile, the non-Hispanic white population is, uniquely, expected to fall, dipping from 199 million in 2020 to 179 million in 2060. The Census Bureau minces no words here: “The only group projected to shrink is the non-Hispanic White population,” they report.
As both Klein and his critics agree, this is a recipe for incendiary politics in America for years to come. That Donald Trump and his backers won the last round in 2016 with “economic anxiety” as cover for racial resentment seems clear. But in a final irony, Trump voters will not only have to choose between immigrants they hate and the economic growth they claim to love. Forty-two percent of rural voters may say “immigrants are a burden on the country,” but their health and perhaps even their lives increasingly depends on those new arrivals.
Simply put, the American health care system in general—and in rural areas specifically—could not function without immigrants. Almost 28 percent (or 254,000) of the nation’s 910,000 doctors and surgeons. Almost 24 percent (or 489,000) of America’s 2.1 million nurses and home health aides are immigrants. Foreign-trained physicians account for almost one-half of all doctors in some specialties, especially those like geriatrics, cardiology, and nephrology disproportionately focused on older patients.
And as the Trump administration began changes to U.S. visa policies as part its Muslim travel ban in 2017, the impact quickly became clear in the areas where he enjoys the greatest support. From coal miners in Pennsylvania to oil field workers in North Dakota, the New York Times reported that March on how “rural areas brace for a doctor shortage due to visa policy.”
About 25 percent of all physicians practicing or training in the United States are foreign, but in some inner cities and most rural areas, that share is significantly higher.
Significantly higher, indeed. “In Great Falls, Mont.,” the Times explained, “60 percent of the doctors who specialize in hospital care at Benefis Health System, which serves about 230,000 people in 15 counties, are foreign doctors on work visas.”
Now, if Trump and his voters seem unencumbered by the truth, they seem similarly immune to cognitive dissonance when it comes to the topic of immigration. That immigration provides a net economic benefit for the United States, that undocumented immigrants pay taxes in excess of the services they consume and engage in less criminal activity than U.S.-born citizens does not seem to dissuade most of the MAGA crowd from its hardline xenophobia. That Donald Trump’s own promises to them on the economy require more—and not less—immigration probably won’t sway them, either. But the rest of America seems sold on the idea that legal immigration is a good thing.