Not Enough People or Not Enough Jobs?
If new hire numbers are flat or declining – what is the cause? Some say constant trade talks with China spook long term projected economic growth. Others contend there are fewer new hires because jobs are going unfilled.
Today’s Wall Street Journal article discusses the interplay of these two forces. https://www.wsj.com/articles/wsj-survey-economists-split-on-causes-of-hiring-slowdown-11573138800
Longer term, U.S. demographics will weigh heavily on economic growth. U.S. birth rate per woman is below what is required to maintain a stable population. (But we are better off than Europe, China and Japan). Without continual and even expanded immigration population gains, our economy will eventually mirror that of Japan – stagnant with an aging population that is not consuming as much in older ages as they once did when workers were in their peak earning years while requiring more healthcare and housing services.
For an interesting video discussing these demographics on a worldwide level, click here: https://www.youtube.com/watch?v=SYZPTaV-RcQ
It is our opinion that students coming to the U.S. for college should be allowed to stay if they want to work here. Net positive immigration growth really is our best competitive advantage at the global level.
Regionally in the U.S., there will be increased competition among state and local governments to attract jobs and talent. Fiscally sound jurisdictions will attract investment and therefore growth. Unsound jurisdictions with excessive debt, such as unfunded pension obligations, will lose investment (and residents) exacerbating decline and bankrupting some.
The city of East St. Louis, IL spends 100% of it’s state tax apportionment on pension service. “East St. Louis is the fourth Illinois city to face state funding interception since pension systems were first allowed to seek that remedy in 2018. The others are Harvey, North Chicago and Chicago.” https://www.illinoispolicy.org/pension-crisis-forces-firehouse-closure-9-firefighter-layoffs-in-east-st-louis/
Rockford and Peoria are not far behind. In the forseeable future, these municipalities will need to spend 100% of property tax revenues on pension obligation service. Cities will have to outsource more municipal services to the more efficient private sector for services such as garbage collection and water/sewer and maybe even eventually security and education.
That will certainly not help job growth in those affected areas.
The sort of good news is that for accounting and finance related positions, there is tremendous predicted continual job demand. The scarcity of qualified talent will continue to push wages at a rate that outstrips inflation.