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Thursday, June 12, 2014

Economist Milton Ezrati Outlines The Next 30 Years For The U.S.

Milton Ezrati is author of "Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live." (NYC Photo)

Milton Ezrati is author of “Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live.” (NYC Photo)

What are the key economic and financial challenges of the next 3o years?

Economist Milton Ezrati says they will come from demographics: an aging population in the developed world and a youthful one in the developing world. But, Ezrati says, demography need not be destiny. There are ways for the U.S. economy to age gracefully.

Ezrati looks at the reality of demographic change and the ways to thrive with it in his new book “Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live” (excerpt below).

Ezrati has more than 40 years of experience in finance. He’s a partner at the investment firm Lord Abbet, where he is responsible for research and strategy. He’s also a fellow at the center for the study of human capital and economic growth at SUNY Buffalo.

Ezrati joins Here & Now’s Jeremy Hobson from NPR’s studios in New York to discuss his new book.

Interview Highlights: Milton Ezrati

On what the concerns are over an aging population

“We have a shortage of workers. We have had low birthrates for decades. There is a reduced flow of young people coming into the workforce; at the same time, the baby boomers beginning to retire. We have an overhang of, effectively, people who stopped producing. We will have a shortage of producing, tax-paying people. It’s gonna strain our finances as we try to meet the pension needs of the future, but it’s more than that. There is an economic burden that’s gonna be imposed, because we will have relatively fewer people of working age available to support what is, effectively, a huge overhang of dependent retirees going to come on stream in the next 20, 30 years.”

On how the U.S. can benefit from immigration

“I think immigration is a solution. It’s a partial solution, but it is a solution. Two things to say about immigration: one is it can’t answer the entire question because when you bring in that many foreign-born people, you create a lot of social tension. It’s very easy to say that it shouldn’t. It’s very easy to say that the native population has nothing to fear and the immigrant population has nothing to fear. But in fact, they do, and that social tension can undermine the economic benefit of the immigrants. The answer, then — the second phase of the immigration question, the answer, then, is to bring in immigrants so we get the most economic and financial bang per person. So we would probably, in the future — in fact, I’m confident we will — recognize this need and the United States will seek immigration reform, more in the direction of screening immigrants, than the current system.”

On how the U.S. stacks up against the rest of the world

“I found some countries that have things that we can learn from, and others that are doing things wrong. Immigration is a good example. We, the United States, is way ahead of the Europeans and certainly the Japanese, which face a huge cultural impediment when it comes to immigration in integrating people into the economy, not even the culture. But the Canadians have done a fabulous job at screening immigrants. They choose immigrants by how much of a contribution you can make to the economy, levels of education, language skills, all that counts. And once you are accepted, they actually connect you with advocacy groups in your ethnic or nationality. It’s a humane thing to do for the people entering the country, but from their point of view, it keeps the social tension down and shortens the time for new immigrants to find work. And so they are setting a model there. We are a model in some respects for Europe. The Europeans are doing a fine job, compared with us, on training workers outside the university level, which will become increasingly necessary across the developed world.”

Book Excerpt: ‘Thirty Tomorrows’

Chapter 1: Growing Old Gracefully

"Thirty Tomorrows" is the new book by Milton Ezrati. (Courtesy)

“Thirty Tomorrows” is the new book by Milton Ezrati. (Courtesy)

The West and Japan are aging. Decades of declining birth rates have reduced the proportion
of young people in these populations, creating increasingly severe shortfalls in the number of new entrants into their labor markets. At the same time, increasing life expectancies have swollen the ranks of their dependent retired populations, redoubling the burdens on these limited labor resources. The change by itself will impose severe growth constraints on these economies and even threaten existing living standards. In stark contrast, the emerging economies — India, Brazil, and China prominent among them — enjoy the benefits of large, youthful, and eager workforces, and will do so for years to come. These differences will set the economic and financial tone for the next 30 years at least.

It would be hard to overestimate the economic and financial ramifications of these demographic trends. The developed economies, to avoid economic setbacks, will come to rely more and more on the product of the emerging economies to support their outsized retired populations. The focus of economic and financial power will shift accordingly. To survive in such an environment — to have something to exchange for these imports — these developed economies will need to increase their emphasis on research, innovation, training, and education. The process will force huge industrial adjustments, change attitudes toward work and retirement, raise levels of immigration, and greatly accelerate the pace of globalization. To sustain such essential adjustments, the leaderships of these countries will need to disarm a dangerous, protectionist backlash that would block their access to emerging economies. China, India, and other emerging economies will have to make their own fundamental adjustments, too. While much can occur naturally without overarching direction, the entire effort, nonetheless, will demand purposeful leadership within each economy and globally.

Changing America’s Self-Image

Though America finds itself under less intense demographic pressure than Japan or Europe, it will in many respects have the greatest trouble adjusting. Unlike Europe and Japan, America has always seen itself as a youthful society and has long claimed the virtues of youth: energy, opti- mism, physical strength, impulsiveness, perhaps even insouciance. It has left to other societies the virtues of age: prudence, patience, sensibility, composure, and care. But as America’s reality becomes less and less youthful, certainly compared with China, India, and other emerging economies, it will have to abandon these attitudes. Its prosperity, in fact, will depend on its ability to seize the advantages of age. Though in some ways the work of change has already begun, the adjustment will not proceed eas- ily. Nor will it proceed easily in aging Japan and Europe, even though these countries have relied less on a cult of youth.

Until recently America’s identification with youth had a basis in reality. The nation was in fact young. Large families and huge waves of eager immigrants kept the average age of the nation’s population low. The physical structure of the economy was also young and ripe with development opportunities. From the eighteenth century to the middle of the twentieth, this young and growing workforce earned huge commercial dividends as it turned this New World’s vast tracts of wilderness into farmland and interconnected it with new roads, canals, railroads, and eventually air links. And, as the existence of this infrastructure facilitated industrial development around previously untouched natural resources, the economy significantly increased those returns.

Of course Europe during this time also enjoyed great economic leaps. Strides occurred especially in technology, transportation, communication, construction, and production. But there was a fundamental difference between Europe and America. Europe’s economies had already established themselves around older technologies. As they applied the new, they were not so much developing as redeveloping, modifying and refining, improving something that had already existed. Industry focused on efficiency, quality, sometimes variety. America, building new, oriented itself toward things more basic: size, volume, raw power. Its continental-sized national market reinforced the difference from a more economically Balkanized Europe.

Especially in the early stages of industrial development, these differences impelled Europe to lead in knowledge-based products. It invented mechanized spinning and the mechanized loom, the steam engine, the railroad, and the locomotive. America applied itself chiefly to the challenges of vast distances and mass production. The United States had its inventions, of course. It pioneered standardized parts and invented the cotton gin as well as the reaper. Not surprisingly, even America’s inventions aimed at volume. It was not until much later in the nineteenth century, when much of America’s de novo development was complete, that its inventors began to refocus innovative energies along lines that Europe had followed for years.

Still, these different emphases persisted right up through the Second World War and even into the second half of the twentieth century. Of course America, as it became ever more completely developed, could rely less and less on opening new areas and did begin to feel the Old World’s need to find its commercial returns in replacement, rebuilding, and refinement. But in the popular imagination, the old distinctions remain stark. America even laid its victory in the Second World War at the feet of its youthful, overwhelming force. The German Tiger tank, it was said, outclassed America’s Sherman tank, but the United States won the war anyway by producing its tank in overwhelming numbers. As one German tank commander noted, just one of his more sophisticated and better armored tanks could take out eight or nine of its American counterparts, but the Americans always sent 10 or more against him. In the air, too, against both Germany and Japan, the message of victory came in America’s ability to build more planes and throw more weight. Qual- ity was claimed but was less obvious. Even America’s great wartime invention, the atomic bomb, spoke to overwhelming force and certainly not to refinement.

It was not until the Cold War that the relative reality, if not quite the imagery, began to change. America’s competition — economic, military, and diplomatic — had by then shifted east, to a still larger and less developed continental power. The Soviet Union was doing more de novo construction than America, certainly of industrial facilities, and tapping resources across a much wider range. The emphasis on mass production fit better there, and when the Soviet leader Nikita Khrushchev, in 1956, assured the world’s diplomats that Soviet Russia would “bury” the West, presumably in production, if not literally, it was believable. The difference showed vividly in the great competition of the time: space exploration. The Soviets emphasized force. Their bigger, more powerful rockets could lift more weight out of the atmosphere than the American rockets. The United States could meet the challenge only, it seemed, by taking a page out of old Europe’s book. Deploying greater refinement, America concentrated more on sophisticated electronics, more precise and careful guidance, and miniaturization to do more with less weight.

Now demographics will draw America still further from its historically youthful image and all that that means. Ancient as the cultures of China and India are, these countries, not America, hold the great, unexploited continental reaches ripe for development. They can take American, European, and Japanese innovations and apply them to regions that, if not virgin territory, are nonetheless barely touched by modern development. They have youthful, eager populations with which to do it. China’s working-age population of 965 million is almost five times that of the United States. Though China’s median age of 35 years is only slightly lower than America’s 37, the gap will widen. India’s median age today is a youthful 26 years, and its working-age population of 744 million is more than three and a half times that of the United States. Brazil,to round out the picture, has a smaller working-age population than America but a much younger population, with a median age of only 29 years.

In such circumstances, the United States can no longer use its old, youthful approach as a guide. Energy and opportunity combined with overwhelming volume and force will lie increasingly with the emerging economies. America must adapt, as it did in the Space Race with the Soviets, by meeting the challenge of China, India, and other emerging economies much as Europe once met America’s challenge. It must recognize that its advantages increasingly will come from refinement and innovation rather than through mass production — not in every case but generally. There is an urban myth from the 1920s that wonderfully captures the difference. As the story goes, right after the First World War American industrialists, though bigger, richer, and more powerful than their European rivals, chafed at their reputation for volume over refinement. A Connecticut copper mill challenged its British rival by sending over a length of tubing with the dare to produce something with a diameter as narrow and as consistent. When the response arrived in Connecticut, the Americans at first could find only their original tube. It took a while for them to realize that the British producers had threaded inside it their much finer piece of tubing.

Excerpted from the book THIRTY TOMORROWS by Milton Ezrati. Copyright © 2014 by Milton Ezrati. Reprinted with permission of Thomas Dunne Books.

Guest

  • Milton Ezrati, partner, senior economist and market strategist at Lord Abbett and author of “Thirty Tomorrows.”

Transcript

JEREMY HOBSON, HOST:

Well, here in this country, the Treasury Secretary Jacob Lew is warning that the U.S. could face a permanent slowdown in economic growth. Lew pointed to growth expectations around 2 percent a year compared with about three and a half percent on average between World War II and 2007. He's calling on more business investment, better job training, and better infrastructure.

But economist Milton Ezrati would add something else to that list - younger workers. Ezrati has more than 40 years of experience in finance. He's a partner at the investment firm Lord Abbet and a fellow at the Center for the Study of Human Capital Economic Growth in SUNY Buffalo. And he's just written a book called “Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live.” And he finds that an aging population won't just cause problems for Social Security and Medicare. Milton Ezrati, welcome.

MILTON EZRATI: It is a pleasure to be here.

HOBSON: Well, what are the big areas that you think we need to be concerned about when it comes to an aging population here in this country?

EZRATI: Well, we have a shortage of workers. We have had low birth rates for decades. There was a reduced flow of young people coming into the workforce, at the same time the baby boomers beginning to retire. We have an overhang of effectively people who stopped producing.

We will have a shortage of producing, tax paying, pension contributing people. It's going to strain our finances as we try to meet the pension needs of the future. But it's more than that. There is an economic burden that's going to be imposed because we will have relatively fewer people of working age available to support what is effectively a huge overhang of dependent retirees going to come on stream in the next 20 or 30 years.

HOBSON: But so will many other countries.

EZRATI: A lot of countries are in worse shape than we are. Most of Europe is in worse shape than we are, and Japan is the most extreme situation. They are - they are worse now than we will be in 2030. So they are sort of leading the charge in terms of these burdens and challenges.

HOBSON: Does it help if it it's a level playing field in that way - that a lot of countries are dealing with the same problems?

EZRATI: It doesn't really help each of us because the problem is that we're all looking for producing, taxpaying, pension contributing workers and we don't have them. The real competition and the balancing act in this is the emerging economies, which have a large part young, eager populations and they are effectively a mirror image of us in this respect.

HOBSON: And they are countries that, as you write, every developed economy wants to invest in.

EZRATI: Well, they are the ones that are growing. And the demographic challenge we face will, unless we do something about it - and I think there is much we can do. But unless we do something about it, that will slow our growth rate and strain our finances. So we're going to have to look increasingly to these emerging economies for some kind of supplement for what we lack in our own economy.

HOBSON: Well, I want to get to the solutions that you lay out. But first let's talk about the problem. Why do we have this declining birthrate, not just in the U.S., but across the West and even in parts of Asia?

EZRATI: The Chinese have a declining birthrate because of a policy of saying only one child per family. But with us, it's been a cultural shift. And the answer, I think, lies in psychology and sociology more than in economics. But the economic result is definite.

We have had a falling birthrate since the 1960s in this country, even longer in Europe and Japan. At the same time, we have this baby boom - this post-World War II baby boom, which was throughout the developed world beginning to retire. So we have a mismatch between consumers and producers going to confront us increasingly over the next 20, 30 years.

HOBSON: And some people may say well, here's a solution - just bring in the labor, bring in more immigrants, increase immigration. What about that?

EZRATI: Well, I think immigration is a solution. It's a partial solution, but it is a solution. Two things to say about immigration. One is it can't answer the entire question because when you bring in that many foreign-born people, you create a lot of social tension. It's very easy to say that it shouldn't - it's very easy to say that the native population has nothing to fear and the immigrant population has nothing to fear, but in fact they do.

And that social tension can undermine the economic benefit of the immigrants. The answer, then -the second phase of the immigration question - the answer then is to bring in immigrants so that we get the most economic and financial bang per person. So we would probably in the future - in fact, I'm confident we will recognize this need in the United States - will seek immigration reform more in the direction of screening immigrants than the current system.

HOBSON: You know, we often think of the U.S. as a country that outsources a lot of its labor, while we have a lot of people in this country who would love to have jobs. First of all, do you think that some of those people who are out of work right now can help solve this problem?

EZRATI: Well, I think some of them can. And we have effectively an army of unemployed. It's really more of a cyclical problem. We've seen the unemployment rate fall in the last year, and it will probably fall going forward.

So it's not going to be in reserve when we get to 2020 or 2025 when the problem gets particularly acute, or certainly not 2030. The other problem with the existing workforce in the United States is they don't have, or many of them do not have, the right skills for this economy - the modern economy. And so they really compound the problem. They're not really employable the way we need people to be employed.

HOBSON: Couldn't they be retrained?

EZRATI: They could, and in fact I spend a great deal of time in "Thirty Tomorrows" talking about training. For two reason - one is to retrain the existing unemployed so that they can make a contribution, earn a living and contribute to the nation's prosperity. But also increasingly we're going to have to export our labor-intensive industries - those that need a lot of labor, particularly the simpler things - to these emerging economies where they have a surplus of young people. And then, to make our economy effective and to relieve the strain on those areas that have lost those industries, we're going to have to retrain people on a level that we have never done before.

HOBSON: Which is not an easy thing to do. We're speaking with Milton Ezrati, whose new book is called "Thirty Tomorrows." Stay with us, this is HERE AND NOW.

HOBSON: This is HERE AND NOW. And if you're just joining us, we're speaking about some of the demographic challenges ahead for the U.S. as the population here ages and economic challenges. Milton Ezrati is a partner at the investment firm Lord Abbot. He's author of the new book called “Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live.”

And Milton Ezrati, we think of ourselves as a country that outsources a lot of work to other countries. You point out that actually many of these countries are outsourcing a lot of work to us, in some cases more than we are to them.

EZRATI: Yes, in fact, it's remarkable when you look at the data because I was very easy when I first started this research - looking at the casual media items. And they say, you know, we're outsourcing to India or to China. But what I discovered in both the Indian and Chinese economies is that all sophisticated services they continue to outsource to us.

They look to us for high-level call centers even. We think of them as the Indians doing all the call centers, and they do for a lot of retail and simple in ordering things. But when it comes to the real support for high level technology, that's done in the United States and Europe to a lesser extent. So they are outsourcing back to us.

One of the other things when you look at China, which is a manufacturing giant, is you realize that China's tremendous export machine has to import a tremendous amount of sophisticated equipment and parts from the United States and elsewhere from the developed world - in particular Japan - in order to maintain their export machine. So they are actually outsourcing the parts to us even as they produce the finished product. A good example is the iPad. Apple has them all assembled in China, but all the parts are made in the United States and sent to China for the assembly.

HOBSON: And you see that kind of thing continuing?

EZRATI: That will continue. In fact I think it's going to become more extreme as we face this demographic challenge. As we export more of the labor-intensive activities to China, India, and other emerging economies, and upgrade our economy, increasingly they're going to look for us for the sophisticated products where we will focus our economy. And we will look to them for the labor-intensive products, which we formerly made for ourselves.

HOBSON: What then do you make of the effort to restart American manufacturing in places like Detroit?

EZRATI: Well, I think that we can restart American manufacturing, but not in the model that is the stuff of legends. We are going to have to upgrade which means that the kinds of workers we'll be looking for will be much better educated, much better trained, much more sophisticated people. Not people standing on an assembly line, which of course is the popular image of Detroit and manufacturing in general. So we can do that. And I think we will. In fact we are.

HOBSON: The things that you talk about in this book are big changes that are going to take a long time. People don't tend to like changes this big, do they? It's going to be very difficult.

EZRATI: Oh, I think it will and I'm glad you brought that up. One of the things that struck me as I went through this book - I constantly got questions about the demographics. I saw what was on offer in the bookstores and magazines, and it was all gloom and doom. I just couldn't accept that.

And when I started looking at what we can do to answer this need - whether it's more women in the workforce or longer careers - all of this will require a tremendous change in the focus of our economy and in the nature of the workplace. In some respects, it's very exciting, but it is going to cause a wrenching change for a lot of people in this country and elsewhere in the world as they adjust to this.

It's one of the reasons why I spent so much time on the training. They are going to need a bridge to get from where they are to where they are going to have to be, where this economy is going to have to be.

HOBSON: Can you envision at this point we're going to have to be - what a workday looks like in 2030?

EZRATI: That's an interesting question. It would depend on where you are. I think that, for instance, in order to get more people, older workers, to stay in the workforce we are going to have to make allowances for people to work part-time, short-time because people, after they are 60 or 65, do not want to work at the intensity they did when they were younger. And so workplaces are going to have much more flexible pay schedules and time schedules.

To get more women into the workforce, we're going to have to do that, but also since women shoulder most of the burden of childcare, we're going to have to make allowances for childcare. And I was amazed when I did the research on this that there many firms already doing this - large firms where thousands of people gather, actually have on-site childcare to lure good workers and keep good workers. Some firms have actually started charter schools so that workers can bring their children to close to where they work, instead of where they live.

And we're going to see a lot more of this. And that is going to be a major change in the workplace for those of us who have come of age in a different world. As far as the refocus of our economy is concerned, the workplace is going to become one of less labor and of more machines doing the labor and people running the machines, instead of producing masses of standardized products - more customized products.

So firms will reorient themselves toward much more sophisticated individuals who can deal in quality control, planning, and client communication, communication with suppliers. These are things that have taken a backseat until very recently and they will increasingly rise. And this will change the nature of the workplace, change the hierarchy in the workplace. Trained sophisticated workers are not interested in a top down, command-and-control approach which is the business model we still largely use in the United States and elsewhere in the world.

HOBSON: As you are doing the research for this book, did you find a country that is doing everything right to prepare for the future?

EZRATI: No. I found some countries that have things that we can learn from. And others that are doing things wrong. Immigration is a good example. We, the United States, is way ahead of the Europeans and certainly the Japanese, which face a huge cultural impediment when it comes to immigration in integrating people into the economy, not even the culture.

But the Canadians have done a fabulous job of screening immigrants. They choose immigrants by how much of a contribution you can make to the economy, levels of education, language skills, all that counts. And once you are accepted, they actually connect you with advocacy groups in your ethnic or national nationality - it's a humane thing to do for the people entering the country. But from their point of view, it keeps the social tension down and shortens the time for new immigrants to find work. And so they are setting a model there.

We are a model in some respects for Europe. The Europeans are doing a fine job, compared with us, on training workers outside the university level, which will become increasingly necessary across the developed world.

HOBSON: One more thing, Milton Ezrati. As I was reading this, it seemed like something I would be reading that an academic had done - that there was a lot of research, a lot of numbers, and a lot of thought about what this was going to be for the future. You're a finance guy.

EZRATI: Well, I am. And I did this because most of our clients of all stripes and all degrees of sophistication asked this question about the demographics. I looked into it. I was dissatisfied with what was around. What I wanted to do was recommend a book for them. And I couldn't find a book that I thought did an adequate job and effectively got sucked into this.

HOBSON: So you had to write it yourself.

EZRATI: And I had to write it myself, and I'm very happy to say the reviews say readable.

HOBSON: It is very readable indeed. Milton Ezrati - the new book is called “Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, And How We Will Live.” Milton Ezrati, thanks for joining us.

EZRATI: It's been a pleasure. Thank you.

HOBSON: And we've got an excerpt of the book at our website hereandnow.org. We would also love to hear thoughts. If you go to hereandnow.org, what should the U.S. be doing to deal with an aging population? Let us know. HERE AND NOW. Transcript provided by NPR, Copyright NPR.


Please follow our community rules when engaging in comment discussion on this site.
  • Rick

    Wow, screening immigrants. What a novel idea.

    No, instead lets open our borders to the poorest, least educated, non-English speaking immigrants who have already demonstrated their disregard for law and order by breaking our immigration laws. The taxpayers can fund their healthcare, food stamps, housing, bilingual education for their kids, etc etc. But that’s OK, because we can make them citizens, get them hooked on welfare, and turn them into loyal Democratic voters.

    • Richard_Cottingham

      Wow Rick,
      It is so refreshing to read a comment that is not cynical, unbiased and non partisan. Thanks loads

      • Rick

        Yes, I’m cynical about the policies of the current administration. So what do you expect me to post?

        • Richard_Cottingham

          Your comment is just about exactly what I would expect you to post.

          • Rick

            Thank you

  • http://aquaponicscal.info Frank Mash

    Another obstacle in our future is the antiquated agriculture. I am trying to find funding for a hundred acrea Aquaponics system in the high desert, san Bernardino. It is the only survivable method of aquaculture. Lets start a discussion. aquaponicscal.info

  • Allen

    How sad that npr would devote so much air time to such a foolish book. Labor surpluses are the rule, labor shortages the aberration. Only after the Great Plague, for example, when Europe was emptied of population, or during and after WWII, when most of the industrial world was ruined and the USA was left standing, or when the European farmer colonists encountered the sparsely populated, largely hunter-gatherer North America, were jobs plentiful. The aging of the American population will not do for the labor market what a devastating plague or war or agricultural or industrial revolution would do. Aging Americans will need less fuel, less food, less housing space. They will need more medical care and especially more personal care. But the increased need for CNAs to take care of the elderly will scarcely dent the demand for jobs by our high school and college graduates. Mizrahi’s unoriginal advice that seniors keep working and immigrants keep flooding in will seem incomprehensible and cruel to our young people so justifiably worried about their future employment.

  • narcoossee

    Regarding “these developed economies will need to increase their emphasis on research, innovation, training, and education” – here’s why that is not going to happen: Multinational corporations do not care about about the competitiveness of any one particular country. They care only about how they can maximize their near-term profits, and will flee to the country which provides the lowest operating costs. Taxes must pay for “research, innovation, training, and education”, and neither they, nor their 1% owners, are will to pay these taxes if they can avoid it. Therefore, it won’t happen. You can bet on it.

  • http://aquaponicscal.info Frank Mash

    We are the lazy evil mass murdering raping plunderers that massacred the Latin’s and ran them out of California texas and other states. They were here first. Us democrats simply want to do what’s best for the future of this nation. Wow, a human long term approach

  • Fay Nissenbaum

    On immigration, no politician or leader has addressed the obvious: If everyone in the US was made a full, legal citizen tomorrow, what of the border then, and the next wave, or constant trickle of people after that, if you will? Personally, I think those here who are not felons, should be given legal status! However, as an independent legislative budget analyst would approach this issue, I have to ask what has there never been an accounting of what immigration costs us (or not)?

    And why is the Mexican government seemingly immune to criticism for policies that send their own citizens out of their country? IMHO, they are corrupt mis-managers and no one calls them on it.

  • Majun3

    How to address the aging problem? Use a moon-shot type program to stop and reverse aging.

  • Michelle

    Who’s “we” Frank. I haven’t murdered, raped, or plundered. The Mexicans stole the land from the Native Americans and the Anglos in tirn stole it from them. None of us were alive at that time. It is not our fault. But you are laying indirect blame and willing to utterly destroy this country to right a cosmic wrong. It’s exactly like blaming all Blacks for the crimes that some of them commit.

  • Cheryl

    Perhaps Mr. Ezrati has been stuck in his office too long and hasn’t actually observed the demographics of the current American workforce. I am a healthy, still-working American taxpayer who is well over 65, hold two advanced degrees, and have superior technical/computer skills. And there are millions of others like me. Ezrati’s glaring generalizations regarding the enormous “burden” we elders are imposing on our economy seem to be based less on statistics–which actually refute his thesis–than on the economic reality that more and more seniors in nearly all areas of the workforce are still on the job (whether we want to be or need to be). Unfortunately, staying employed is the challenge, and that fact, I believe, may be skewing Mr. Ezrati’s numbers and fueling his false premise. For the past several decades, too many able-bodied, richly skilled older Americans have been let go for unspecified (read: illegal age discrimination) reasons because their employer thinks that “younger and cheaper” = better bottom line, when it actually equals loss of productivity, inferior skills, and increased training costs. However, a slowly evolving trend is emerging, according to numerous reliable sources that measure such things, in which an increasing number of employers are canny enough to recognize the advantage of hiring someone with gray hair and a wealth of experience and workplace savvy. No, we cannot work forever, but who can? So, while there is probably some worthwhile content to be gleaned from Ezrati’s tome, I will not be buying it. His whole premise sounds grossly dismissive, uninformed, and chiefly designed to fill a non-existent niche on bookstore shelves and his bank account. What I will do is continue to keep on keeping on–an expression and a mindset that Mr. Ezrati may be too green to get.

  • Lulu’s Mom

    Agree with Allen. Ezrati is part of the crowd responsible for looting the retirement savings of millions of older workers. We can’t afford to retire… ever. We are a skilled work force that nobody wants to hire. And if our economy needs endless growth of population and income, then the economy is broken. The interview is justifying offshoring and unlimited H1-B importation of workers, along with the insidious “have more babies” crap.

    • Cheryl

      Lulu’s Mom, you’ve nailed another aspect about the Ezrati interview that got on my last nerve: As an economist and financier, he was presumably in a position to warn the public about the approaching catastrophic financial meltdown that has stripped millions of Americans of their homes, life savings, hope, and even health. Where was that book? As much as my heart breaks for young families in dire circumstances, at least they have time and vitality on their side. For seniors, many of whom lost everything, there can be no amazing second act. Time is simply not on our side. Our aspirations, after a lifetime of work, have been reduced to survival mode. Yet Mr. Ezrati, the pragmatist, skates over these facts and pens a book that states, “We have an overhang of, effectively, people who stopped producing.” Am I the only one who finds his Orwellian tone just a little chilling?

  • Richard_Cottingham

    “We have a shortage of workers. We have had low birthrates for decades. There is a reduced flow of young people coming into the workforce; at the same time, the baby boomers beginning to retire.” I hear this argument frequently. If Social Security and pension plans such as Virginia Retirement System were “Pay-Go” systems this would be a valid argument but I do not think that is the case. I have been drawing retirement from both for the past 8 years and I believe it is money I paid into the system plus interest. I do not think the availability of my funds is dependent on how many people are working today.

    • CrisIreland

      Social Security is a pay as you go system and there is no social security savings. Current workers, through their social security taxes, are paying for those on Social Security right now. In order for Social Security to survive, we are going to have to raise the age of Social Security and we also going to have to eliminate the cap on social security taxes.

  • CrisIreland

    The earth has a population problem. and we have limited resources. As a direct result of overpopulation, we are facing climate change. Declining birthrates are actually a good thing. The problem is that declining birthrates are only happening in the West and richer nations, so we need to educate the poorer nations in Africa, Asia, and South America about birth control.

    • Toni Ranieri

      Thank you,
      Yes, declining birthrates are actually a good thing. In this game of economics it may cause some waves until we adjust to the new reality. In reality the earth has limited resources and population growth can not continue. If we must change the game, let’s give it plenty of thought and not necessarily base it on an old model.
      I wish NPR had given everybody a little reminder that declining birthrates is a good thing.

  • Tom Shillock

    P { margin-bottom: 0.08in; }

    Milton Ezrati is right about some
    things and wrong about others. In neither case is the thrust of his
    assertions new except perhaps to him or those who do not read
    macroeconomics.

    First, America does not have a shortage
    of workers. The claim that older workers are not as productive as
    younger workers is ageism. Ageism is pervasive in corporations whose
    managements believe that worker productivity is a function of caloric
    output. Yet in an increasingly “knowledge” based economy this
    belief is either obsolete by perhaps 90 decades or it is based on a
    physical paradigm of work. Further, future financial burdens of
    retirees can be met by retaining and hiring older workers not
    discriminating against them with the connivance of the federal
    government as is currently done. This is a matter of changing and
    enforcing the laws against employers not resorting to mass
    immigation.

    Second, Ezrate is correct to point out
    that increasing immigration is and would cause economically
    offsetting social disruption. Demand for more immigrants by business
    interests over the past several decades is essentially a demand for
    lower labor costs, whether it is farm workers, construction workers,
    of H-1Bs and cognate immigrants for high tech engineering and science
    jobs. Screening immigrants for English competence would surely help
    as would levels of formal education in real academic subjects, though
    we do not need more MBAs or lawyers. America needs assimilation not
    ethic enclaves especially enclaves of religious fanaticism of which
    America is more than blessed.

    Third, Ezrati’s claim that Americans
    lack the skills needed by today’s and tomorrow’s jobs is false; those
    who make such claims (employers and their economist propagandists) do
    so to excuse more immigration to further suppress incomes and
    benefits of American workers. Paul Krugman and others have pointed
    out that the skills gap is bogus. Ezrati represents the investor
    class (Lord Abbett), that is the upper 1% who benefit from lower
    labor costs and would benefit even more from serfdom or slave labor.

    Erzati apparently does not understand
    that advancing technology reduces the skills needed by most workers
    rather than increasing them. That, for example, is what Google’s
    automated car does. Of course, scientific research and developing
    new technologies usually does take highly trained people but not very
    many of them. The ratio is more like the number of workers needed to
    design a bridge versus the number of workers needed to build it.
    Decades ago, it was probably true that workers did not have requisite
    skills, for example, when the auto industry first got underway.
    Another reason that higher skills are not needed as technology
    advances is that increasingly work is rationalized, divided into
    increasingly circumscribed and repetitive steps.

    Employer’s claims about their needs vis
    a vis workers skill are tendentious, their claims reflect their
    perceived financial interests not disinterested science. American
    corporations seek to offload training costs on society, but worker
    training is not the purpose of formal education. It is also the case
    that American corporations do not adequately distinguish between
    ability and skill, perhaps because most corporations are not managed
    by well educated people. They neither understand themselves or
    others and in many cases even their own industries, their preeminent
    skill being internal corporate politics. This is reflected in
    Erzati’s comment that they are still run in a command and control
    manner. The disadvantages of this were explained in the 1950s by
    Frederick Herzberg in books and journal articles, none of which
    corporate CEOs bother to read because they do not need to.

    The more substantive changes that
    America needs to make have to do with inequality and Social Darwinism
    and an economy that presupposes infinite economic development via the
    consumption of nonrenewable natural resources.

  • Matt Federoff

    It is fascinating to me how the core human issue of not having babies is so quickly dismissed in the reflexive liberalism that so permeates the NPR crowd.

    But hey, we’re doing our part for the future. My bride and I are expecting our 12th child next spring. Having children is both the ultimate expression of optimism for the future, and the best way to provide for that future. You can take some comfort that my children will be contributing to your Social Security checks.

    • N_Jessen

      While there may be such thing as a ‘unbalanced’ population (in this case partly a product of the boomer generation), if much of that population is able to contribute longer to their own federal insurance, it doesn’t seem as easy to assume that having lots of little expressions is a big favor to society. In the longer run at least it may be a zero-sum game.

  • S David H de Lorge

    All immigration talk. No education talk.

    I mean this: with half of young people dropping out of high school, and many graduating with little more useful knowledge, how much wasted talent is there right here, again?

    If the anti-immigrant spending were diverted to adult education, how many more producers might we salvage for the next few decades of production?

    If we really supported families, children, and adult learners for the requisite years and months — I said *really* supported — how much new productivity capacity would we acquire?

    Come to that, how much new productivity capacity will we need again? With productivity per worker having increased for decades, and continuing to increase, much of the production we need is accomplished by fewer workers. More workers in some sectors remain unemployed. Again, robust investment in re-education gives us new, desirable, productive workers (instead of unskilled drags on the economy) within months to years in the fields where demand is high — if we *really* support their re-education.

    What did Lord Banker have to say, again, about supporting aging population anyway? Did it have to do with growth in demographic terms, or growth of Capital? And that Capital to be concentrated in how few aging hands?

    And re-invested in how many of the 99% to enhance their productivity, not to mention quality of living?

  • Karl W

    His theories completely ignore the replacement of humans in the workplace as technology advances, and therefore makes the argument moot. Everything he said was based on an economy as it exists right now, not 30 years from now.

  • TripleKidney

    In the past 30 years has any economist been right about anything? Have any of their forecasts or predictions been even close?

  • TrainedHistorian

    No Mr. Erzai, we certainly do NOT have a labor shortage, and we do not need more immigration per se. How do we know? Because median real wages have been stagnant and wages at the bottom have been declining for over 30 years. We also still have high underemployment, especially among the young.

    Yes, it would be rational to screen immigrants and only take in higher-skilled ones. That’s what our laws are SUPPOSED to aim at. But those laws were ignored in 1986 in favor of legalizing mainly low-skilled “undocumented” immigrants, and our elites, who like Erzai are part of the top 5% in income, are proposing make the same basic mistake with their oxymoronic “immigration reform” proposals, which will legalize some 10-30 millions largely low-skilled workers with no more than a HS education in exchange for increasing H1B visas by about 200,000 at most. The math does not add up..

    Of course it suits Erzai, others in the capitalist and investment class, including our politicians, most of whom are also in that class and so can buy most of what they want without worrying about low wages and schools crowded with lower income, non-native speakers, etc. to keep flooding the workforce with workers, regardless of their skill levels, their effect on real wages, rental housing prices etc.. For them: cheap nannies, cheap housecleaners, cheap gardeners, cheap construction workers. For the rest of us: low wages, skyrocketing rents, and schools needing to spend resources on basic remediation. We do our child-care, house-cleaning and yardwork–if we even have a yard, which is getting more and more unaffordable all the time because of the selfish immigration policies of Erzai and his ilk.

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