Monday, January 8, 2024

Demography, Destiny and Destruction?

I think most people understand that the United States is in the midst of changing demographic trends.

The nation is getting older. Women are having fewer children. There are more immigrants. Minority populations are growing. The White population is aging and getting smaller as a percentage of the whole.

For example, there are now only half the births per woman that there were in 1960.



However, I doubt many fully understand how profound these changes really are and where it leads.

In particular, what has been transpiring on the southern border of the United States over the last three years.

After all, demography is destiny.

This was really driven home to me when I saw the chart below.

Over the last several months more illegal immigrants entered the United States than the number of births that have been recorded!


Credit: https://twitter.com/fentasyl/status/1740779371529740380


Bear in mind that the number of illegals in that chart are just those that were encountered by the Border Patrol. Nobody knows how many others snuck into the country and avoided detection.

This chart provides some historical context on apprehensions and expulsions of illegal immigrants by the U.S. Border Patrol since 1929.



To describe it as UNPRECEDENTED is an understatement.

We have already seen significant changes in American society play out since the large wave of illegal immigration in the 1980's and 1990's.

The strain it put on our education, health care and welfare systems. The reality that a lot of construction trade and agricultural labor jobs are now devoid of native born workers. The pressure that all of these additional people has put on the nation's infrastructure and housing prices.

We have not seen anything yet if this illegal immigration is allowed to continue.

The America that our children and grandchildren will experience will be nothing like what we have known previously.

Demography is destiny.

For example. Elon Musk makes a great point on X as to what can we expect with future housing and rental prices with all of these additional people that will need shelter in the future.



There is little doubt that the previous waves of illegal immigration have already been a contributing factor (after lower interest rates) in the increased costs of housing we have seen over the last 20 years.

Credit: https://www.fool.com/the-ascent/research/average-house-price-state/

 

The effect that a large number of immigrants can have on the housing market is easier to comprehend when you look at what has occurred in Canada.

Canada has been admitting new immigrants (almost all legal) well in excess of the number of annual births for the last 20 years.

This has been a national policy to combat what was seen to be a zero growth national population looking forward due to a declining total fertility rate in the nation.

Canada had the same low interest rates the United States saw over the last 20 years. However, it added into the mix millions of immigrants who needed new shelter immediately. It is not the same as being able to prepare for that need when a new birth reaches adulthood in 20 years and needs new shelter apart from their parents.

80% of Canada's population growth since 2016 has come from immigration. Immigration accounted for 96% of population growth in Canada in the most recent year.

Compare Canada's housing costs with the United States.

Look at how closely housing costs tracked between Canada and the U.S. until 20 years ago.

That is when Canada's immigration numbers started exceeding its native births.

The divergence is not due to the fact that Canada had lower interest rates than the United States.

Look no further than the influx of immigrants into Canada that completely disrupted the supply/demand equation with respect to housing in that country.



 

Demography is destiny.

And that destiny is not always a destination that is preferable.

What is maddening in all of this is that while we allow millions and millions of undereducated and low skill migrants to invade our border (3.2+ million just this year), at the same time we have almost 10 times the number of highly skilled foreign-born workers waiting in line to immigrate to the United States compared to the number of H1B visas available annually.

Almost 800,000 H1B applications are currently active for 85,000 slots available under the current immigration laws.



It is insane.

You can also see the effects of uncontrolled immigration in the labor statistics.

Since 2018, there has been no net increase in the numbers of native born workers in the U.S. economy.

Foreign-born workers now fill almost 3 million more jobs than they did five years ago.

Native-born workers have not increased at all.


Credit: https://twitter.com/RealEJAntoni/status/1743304591951778047/photo/1


All net job gains have gone to foreign born workers.

This trend really took off beginning in 2021 when Joe Biden took office as you can see in this chart.


Credit: https://twitter.com/JoeConsorti/status/1743333847482196001

Part of this is due to the fact that increasing number of native born workers are older and reaching retirement age.

Foreign born workers are younger.

It is natural that there would be some net growth in foreign born vs. native born workers due to this demographic reality.

However, you cannot forget the fact that 8 million illegal immigrants have entered the country in the last three years and most came here to look for jobs and improve their economic situation.

This trend will only increase and intensify as a result of what has transpired recently.

Demography is destiny.

However, other larger problems are on the horizon as a result of uncontrolled immigration..

You cannot have this much immigration in a short period of time (most of it illegal) without creating cultural divisions in the short term and fundamental challenges regarding the cultural fabric of the nation into the future.

This is not conjecture.

We have seen it in this country before as the Irish, the Italians, the Germans and others were assimilated into the country.

Europe is facing that challenge right now across the continent.

Diversity is a strength but only if the fundamental values are aligned and the most basic beliefs and principles of a society are widely shared.

The United States is a nation of immigrants. It has prospered and succeeded because the immigrants who came here over the years embraced their new country, its principles and ideals. 

Will that continue to be the case? If it is not, the United States of America may be unrecognizable compared to what we know it to be today.

We will have to wait and see where that destiny takes us.

However, when you look at where we are today, and what is going on with illegal immigration, it is hard to not come to the same conclusion that Scott Adams (of Dilbert fame) recently did on X.





How else can all of this be explained?

Do we really have true Americans in power who are intent on self destruction?

Demography is destiny.

Is destruction the ultimate destiny?

I wish there was another answer.

7 comments:

  1. I can’t imagine running a business and giving everyone who wants to work for my company a job no matter what their skills, values or background is. Yet that is how we are running the country now. There is no cohesive vision for America being articulated by our nation’s leaders let alone a plan for how to get there. So, bad actors are making their own vision and plans for the country, and they appear to be succeeding.

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  2. Scott, the Cincinnati Metropolitan Statistical Area encompasses 2.26 million people. Ohio's population is 11.8 million. If approximately 2.75 to 3 million people immigrated to the US in the last four years, we have, essentially, created a new Ohio since 2019. As you point out, this is unsustainable. Coincidentally, the Bureau of Labor Statistics reported the average monthly job gain in 2022 was 399,000, or 4.8 million per year. What happens if the economy enters a recession?

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  3. Not only are most of them unskilled and uneducated, they don't speak the language.

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  4. Excellent piece and indeed something all Americans should be concerned about. Regardless of which country we are talking about assimilation of immigrant populations is slow at best; Western European countries have seen a total erosion of their national identities. But Scott the real hidden cost, or better said opportunity cost no one talks about are the BILLIONS of remittances to their home countries that are happening. There is a wonderful Hispanic grocery store I often shop at that has a line out the door on Saturday mornings with people wiring thousands of dollars of their earnings, most of which were never taxed, to their families back home. Those are billions not spent here yet we absorb the cost of providing them countless social services. And they think nothing of it.

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  5. You make a great point. All of those remittances sent outside the country could be a big reason why the velocity of money in the US economy has dropped so significantly the last 25 years."The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy."
    25 years ago velocity was about 2.2. It is now 1.3. This is a big reason why stimulus efforts by the Fed have less effect than they used to. Al lot of the money pumped in is not going to boost the US economy. It is leaving the country.
    https://fred.stlouisfed.org/series/M2V

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  6. Wow excellent stat!

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