Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, April 30, 2024

AI Summary. Tracking the same patients as they age from Medicaid into Medicare at 65, the authors find higher provider acceptance rates are associated with larger increases in primary care and specialist visits, especially new-patient specialist visits. They conclude Medicaid's smaller provider network plays a large role in limiting service provision.

Calvin Ackley, Abe Dunn, Eli Liebman and Adam Hale Shapiro Federal Reserve Bank of San Francisco
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When Medicaid patients qualify for Medicare at age 65, service provision increases by about 20%. 60-90% of the increase in office visits is with physicians who had not accepted a new Medicaid patient in the prior year. @ah_shapiro

How much do provider acceptance rates limit Medicaid patients' care?

Core argument: Tracking the same individuals as they age into Medicare from Medicaid at 65, a one percentage point increase in Medicare acceptance rates is correlated with a 0.008 larger increase in primary care visits.

We track the services provided to the same individual as they age into Medicare from Medicaid at age 65, becoming dual enrolled. On average, a one percentage point increase in Medicare acceptance rates is correlated with a 0.008 larger increase in primary care visits, consistent with patients having more access using more care. Bringing the Medicare acceptance rate down to the Medicaid acceptance rate (about 10 percentage points) would lead to about .08 fewer monthly primary care visits, which is about one-third of the pre-period mean and about 50% higher than the total increase we see in primary visits. A 10 percentage point increase in the state-level Medicaid acceptance rate would lead to a 0.028 smaller increase in specialist visits per month across the threshold, about 11% of the pre-period mean. Results are especially strong for new-patient visits with specialists. [Our] analysis indicates that Medicaid’s smaller provider network plays a large role in limiting service provision.

Takeaways by Macro Roundup® AI

  1. Tracking the same individuals as they age into Medicare from Medicaid at 65, a one percentage point increase in Medicare acceptance rates is correlated with a 0.008 larger increase in primary care visits.
  2. Lowering the Medicare acceptance rate to the Medicaid rate, about 10 percentage points, would mean roughly 0.08 fewer monthly primary care visits, about one-third of the pre-period mean and about 50% larger than the total observed increase.
  3. A 10 percentage point higher state-level Medicaid acceptance rate would lead to a 0.028 smaller increase in specialist visits per month across the age-65 threshold, about 11% of the pre-period mean, with results especially strong for new-patient specialist visits.

Related Articles:

  • Has the Medicare Cost Problem Gone Away? — Average annual real per capita spending growth in the US Medicare program fell from 5.2% in 1987-1996 to 2.7% in 1996-2005 and 0.7% in 2006-2022, a slowdown most plausibly attributed to congressionally mandated payment reforms and cuts. With enrollment projected to rise from 66m to 83m by 2040, aggregate costs are expected to grow rapidly.
  • A Huge Threat to the U.S. Budget Has Receded. And No One Is Sure Why — Spending per Medicare beneficiary in the US has nearly leveled off over more than a decade, though total enrollment has grown as baby boomers age. Policy changes including cuts to hospital and private plan payments explain some savings, but the Congressional Budget Office attributes most of its lowered forecasts to "technical adjustments" in public health and medical practice.
  • Why Medicare and Social Security Are Sustainable — Growth in U.S. health spending above GDP growth has slowed considerably, and the Congressional Budget Office projects social insurance spending will eventually rise by about 5 percentage points of GDP, half of that from assumed health cost increases. The author argues better incentives for medically effective care could hold cost growth well below those projections.

AI Summary. Companies in the S&P 500 employ 29m people globally, compared with 158m total US employment, meaning more than 80% of US employment lies outside the index. 87% of US firms with revenue above $100m are private.

Torsten Sløk Apollo
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Torsten Sløk @apolloglobal notes the American economy is largely private: 80% of Americans work for firms outside of the S&P 500 and 87% of US firms with revenue greater than $100 million are private.

Do public stock indexes represent most of the US economy?

Core argument: S&P 500 companies employ 29 million people globally against 158 million employed in the US economy, meaning more than 80% of US employment sits outside S&P 500 firms.

Most of the time in financial markets goes with talking about the S&P 500. But public markets and public companies are only a small part of the economy. Total global employment in the S&P 500 companies is 29 million, and total employment in the US economy is 158 million. Put differently, more than 80% of total employment in the US economy is outside the S&P 500 companies. This is consistent with our recent note in which we showed that 87% of firms in the US with revenue greater than $100 million are private. The bottom line is that the vast majority of the US economy is in private markets.

Takeaways by Macro Roundup® AI

  1. S&P 500 companies employ 29 million people globally against 158 million employed in the US economy, meaning more than 80% of US employment sits outside S&P 500 firms.
  2. Some 87% of US firms with revenue greater than $100 million are private, consistent with the argument that the vast majority of the US economy is in private markets.
  3. Financial market commentary centers on the S&P 500, though public markets and public companies make up only a small part of the US economy.

Related Articles:

  • Many More Private Firms in the US — 87% of US firms with revenue above $100m are privately held rather than publicly traded.
  • Birth, Death, and Wealth Creation — The median age at which US companies went public rose from 7.9 years in 1976–2000 to 9.5 years in 2001–2022, implying that more wealth creation now occurs in private markets. Research on more than 28,000 US-listed companies since 1926 finds that just under 60% destroyed $9.1tn of wealth while about 2% created $50tn.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. The author argues that a policy of low interest rates combined with a weaker dollar would most straightforwardly be implemented through 1940s-style yield curve control, capping short- and long-dated rates below market levels and easing Treasury market stability concerns. Such a policy would boost equities and fixed income, and has historically been followed by higher inflation and stagnant growth.

Joseph Wang Fed Guy Blog
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.@FedGuy12 argues that Donald Trump’s preferences for lower interest rates and a weaker dollar would lead to a “significant positive for all assets, from equities to fixed income” in the short term, but higher inflation and stagnant long-term growth.

Would capping interest rates below market levels boost assets and inflation?

Core argument: The author puts roughly a 50% chance on significant upside risk over the coming year, alongside a clear shift in political discourse biased toward inflationary policies.

President Trump has long made clear his preference for low interest rates, and reports indicate he may further his trade wars by also devaluing the dollar. The most straightforward implementation of these two goals would be to set ceilings on short and longer dated rates at below market levels – in effect a return to 1940s style yield curve control. This would also completely resolve the many stability concerns of the Treasury market. Lower rates and a weaker dollar would be a significant positive for all assets, from equities to fixed income. This has also historically led to higher inflation, stagnant economic growth, and the eventual deployment of deflationary policies by popular demand. But that is a process that plays out over a period of years. At the moment it looks like there is roughly 50% chance of significant upside risk in the coming year. In any case, there is clear change in the political discourse that is biased towards inflationary policies.

Takeaways by Macro Roundup® AI

  1. The author puts roughly a 50% chance on significant upside risk over the coming year, alongside a clear shift in political discourse biased toward inflationary policies.
  2. The most straightforward way to deliver President Trump's stated preference for low rates and a reportedly desired weaker dollar would be ceilings on short and longer dated yields below market levels, a return to 1940s style yield curve control.
  3. Lower rates and a weaker dollar would be a significant positive for all assets from equities to fixed income and would resolve Treasury market stability concerns, but have historically led to higher inflation, stagnant growth, and eventually deflationary policies demanded by the public.

Related Articles:

  • Global Views: Friendly Baseline, Greater Risks — Despite upside inflation surprises, the authors argue the broader disinflation narrative remains intact, citing a labor market that continues to rebalance: a jobs-workers gap of 2.0m, a quits rate below pre-pandemic levels, and wage growth running just over 4% year-on-year. They expect wage growth to converge to 3.5%, the pace they estimate is consistent with 2% inflation.
  • Parsing the 2024 Inflation Rebound — Average pay for most workers is rising about 4.5–5% a year, roughly 1.5–2pp faster than the pre-pandemic average, implying an underlying inflation trend about 1–2pp above the pre-pandemic pace absent a surge in productivity or saving. Earlier one-off drops in consumer goods prices held measured inflation below that trend and appear to have ended.
  • The Fed Is Tightening More Than It Says — The authors estimate that the Federal Reserve's balance-sheet runoff makes its current policy rate of 5.375% equivalent in its effect on financial conditions to a rate of 5.763% without runoff, a gap of 39 basis points. They project that gap to widen to a full percentage point as assets continue rolling off at $95bn a month.

AI Summary. Survey data show white, non-Hispanic families own the large majority of U.S. employer businesses, with their share of business-owning families falling from 80% to 73%. Over the same period, the Black, non-Hispanic share rose from 5% to 8% and the Hispanic or Latino share from 4% to 7%.

Wendy Edelberg and Noadia Steinmetz-Silber Brookings Institution
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A surge in entrepreneurship among blacks and Hispanics from 2019-22 increased the non-white share of business-owning families from 20% in 2016 to 27% in 2022. @WendyEdelberg

Is business ownership in the U.S. becoming more racially diverse?

Core argument: White, non-Hispanic families accounted for 80% of U.S. employer business-owning families in 2019, compared with 5% Black, non-Hispanic and 4% Hispanic or Latino.

Figure 2 shows the composition of owners of employer businesses by race and ethnicity. White, non-Hispanic (“white”) families make up the lion’s share of business ownership in the U.S. In 2019, 80% of business-owning families were white, compared to 5% Black, non-Hispanic (“Black”) and 4% Hispanic or Latino. In the 2022 SCF, these gaps began to shrink—73% of business owners were white, 8% were Black, and 7% were Hispanic or Latino.

Takeaways by Macro Roundup® AI

  1. White, non-Hispanic families accounted for 80% of U.S. employer business-owning families in 2019, compared with 5% Black, non-Hispanic and 4% Hispanic or Latino.
  2. In the 2022 Survey of Consumer Finances, the white, non-Hispanic share of business owners was 73%, with Black, non-Hispanic owners at 8% and Hispanic or Latino owners at 7%.

Related Articles:

  • Latinos Are Starting U.S. Businesses at a Torrid Pace — Immigrants accounted for 36% of new U.S. business launches last year, up from 25% in 2019, driven by a rise in Latino entrepreneurship, while business creation by white and native-born Americans has slowed. Hispanic-owned startups tend to be smaller, with 46% reporting over $100,000 in annual revenue versus 62% of white-owned firms.
  • Business Applications Eked Out a New Record in 2023 — Americans filed 5.5m applications to start new businesses in a single year, nearly 1.8m of them highly likely to hire employees — both series highs in U.S. Census Bureau Business Formation Statistics. Likely-employer applications ran 37% above pre-pandemic levels, evidence that startup activity has settled at a higher baseline.
  • High Tech Business Entry In The Pandemic Era — High-tech industries accounted for a disproportionate share of the surge in net new business establishments after 2019, with net entry higher in tech than non-tech industries. The authors find suggestive evidence that tech establishment births rose more for existing firms than new firms, though both categories saw elevated openings.

AI Summary. Recent US student debt cancellation policies are estimated to cost a combined $870bn to $1.4tn, with $620bn already implemented through an income-driven repayment program, interest cancellation during repayment pauses, and targeted discharges. The newest cancellation plan is preliminarily estimated to cost an additional $250bn to $750bn.

CRFB Staff Committee for a Responsible Federal Budget
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.@MarcGoldwein @BudgetHawks estimates the cost of the Biden Administration’s proposed student debt cancellations over the next decade at $0.9-1.4T, more than total Federal spending on higher education from 1962-2019.

How much do recent student debt cancellation policies cost in total?

Core argument: All recent student debt cancellation policies, including the Biden Administration's new plan, are estimated to cost a combined $870 billion to $1.4 trillion.

Including the Biden Administration’s new student debt cancellation plan, we estimate all recent student debt cancellation policies will cost a combined $870 billion to $1.4 trillion. $620 billion of debt cancellation has already been implemented, including $275 billion from President Biden’s new Income-Driven Repayment (IDR) program known as SAVE, $195 billion from cancelling interest as part of nearly 41 months of repayment pauses since March of 2020, and roughly $150 billion from a variety of more targeted actions such as discharging debt for those who attended closing schools and making it easier to cancel debt under existing loan forgiveness programs. The President’s newest debt cancellation scheme could cost an additional $250 to $750 billion based on our preliminary estimates.

Takeaways by Macro Roundup® AI

  1. All recent student debt cancellation policies, including the Biden Administration's new plan, are estimated to cost a combined $870 billion to $1.4 trillion.
  2. The President's newest debt cancellation plan could cost an additional $250 billion to $750 billion, according to preliminary estimates.

Related Articles:

  • Debt Moratoria: Evidence from Student Loan Forbearance — The authors estimate that borrowers whose student loan payments were frozen ended with about $1,500 more in student loan balances and $1,200 (3%) more in other household debt, including mortgage, auto, and credit card borrowing, than borrowers without a payment stoppage. The findings suggest the pause raised short-term consumption and overall leverage, with effects concentrated among borrowers never previously delinquent.
  • PLUS or Minus? The Effect of Graduate School Loans on Access, Attainment, and Prices — The authors estimate that uncapping federal graduate student borrowing increased previously constrained students' borrowing and shifted their debt from private to federal sources, but had no effect on graduate enrollment, the racial and gender composition of entering students, human capital accumulation, or later earnings. They find the resulting increase in federal loans significantly raised program prices.
  • How Gen Z Is Becoming the Toolbelt Generation — Enrollment in vocational-focused community colleges rose 16% to its highest level since tracking began, with construction-trades programs up 23% and heating, ventilation, air conditioning and vehicle repair programs up 7%. Federal data show the number of carpenters and electricians grew over the past decade even as their median ages fell.

AI Summary. China's publicly released military budget understates its spending; adjusting for purchasing power and adding uncounted expenditures, the authors estimate the buying power of China's military budget at $711bn, roughly triple Beijing's stated figure and nearly equal to the United States'. Such parity favors China, whose spending concentrates on Asia while US resources are spread across multiple theaters.

Mackenzie Eaglen American Enterprise Institute
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After adjusting for hidden expenditures, labor costs, and purchasing power parity, @MEaglen @AEI estimates that Chinese military spending in 2022 was $710.6B, nearly equal to the US’s $742.2B.

How large is China's military spending in purchasing power terms?

Core argument: After economic adjustments and estimates of uncounted expenditures, the buying power of China's 2022 military budget reaches an estimated $711 billion, triple Beijing's claimed topline and nearly equal to U.S. military spending that year.

Beijing’s publicly released military budget is inaccurate and does not adequately capture the colossal scope and scale of China’s ongoing military buildup and wide-ranging armed forces modernization. After accounting for economic adjustments and estimating reasonable but uncounted expenditures, the buying power of China’s 2022 military budget balloons to an estimated $711 billion— triple Beijing’s claimed topline and nearly equal with the United States’ military budget that same year. Equal defense spending between the United States and China plays to Beijing’s benefit. As a global power, the United States must balance competing priorities in the Indo-Pacific and elsewhere, which spreads Washington’s budget thinly across multiple theaters. Meanwhile, each yuan China invests in its military directly builds its regional combat power in Asia.

Takeaways by Macro Roundup® AI

  1. After economic adjustments and estimates of uncounted expenditures, the buying power of China's 2022 military budget reaches an estimated $711 billion, triple Beijing's claimed topline and nearly equal to U.S. military spending that year.
  2. Beijing's publicly released military budget is inaccurate and does not adequately capture the scope and scale of China's military buildup and armed forces modernization.
  3. Equal U.S.–China defense spending plays to Beijing's benefit, as the United States spreads its budget across the Indo-Pacific and other theaters while each yuan China invests directly builds its regional combat power in Asia.

Related Articles:

  • China’s Shipyards Are Ready for a Protracted War. America’s Aren’t — China produced more than half of the world's commercial shipbuilding output, while Europe accounts for about 5% and the US next to nothing, with most of the remainder built in South Korea and Japan. Analysts argue that in a protracted conflict China's wartime-scale yards could quickly accelerate production, replace lost ships, and repair damaged ones.
  • The US and Its Allies Face a $10 Trillion Reckoning in the Race to Rearm — World defense spending reached a record $2.2tn, and security officials say military budgets may need to reach Cold War levels of as high as 4% of economic output to deliver on NATO's plans. Bloomberg Economics calculates that US and Group of Seven allies hitting that level would mean over $10tn in additional commitments over a decade.
  • China’s Military Spending Is A Growth Certainty Amid Rising Tensions — China's military budget is set to rise 7.2% to Rmb1.67tn ($232bn), more than double its level a decade ago and the world's second largest after the US. US lawmakers and experts argue actual spending is far higher because classified expenditures are excluded from official figures.

AI Summary. The suicide rate among Americans in their 20s and 30s has surpassed the rate among those in their 40s and 50s, as suicide fell among middle-aged adults and rose among younger adults. Among men, the highest suicide rate is now found in those in their 20s, aside from men aged 75 and older.

Jean Twenge Generation Tech
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Suicide rates for Americans in their 20s and 30s are now higher than among those in their 40s or 50s, reversing “the long-accepted statistic that more middle-aged Americans take their own lives than younger adults.” @jean_twenge

Have suicide rates among young adults surpassed those of middle-aged Americans?

Core argument: In 2020 and 2021, the suicide rate among Americans in their 20s or 30s exceeded the rate among those in their 40s or 50s, reversing the long-accepted pattern that middle-aged Americans take their own lives more often.

In 2020 and 2021, the suicide rate among Americans in their 20s or 30s was higher than the suicide rate among those in their 40s or 50s (see Figure 1; 2021 is the most recent data available). Between 2019 and 2021, suicide fell among middle-aged adults and continued to rise among younger adults. The end result was the reversal of the long-accepted statistic that more middle-aged Americans take their own lives than younger adults. But is it still true that the highest suicide rate is among middle-aged men? That’s what headlines have often noted. It is not. The highest suicide rate is now among younger men (see Figure 2). Suicide rates for middle-aged men fell precipitously after 2018 while those for younger men rose. Until men reach 75 or older, when suicides rise due to terminal illness, the highest suicide rates are now among men in their 20s – not the middle-aged.

Takeaways by Macro Roundup® AI

  1. In 2020 and 2021, the suicide rate among Americans in their 20s or 30s exceeded the rate among those in their 40s or 50s, reversing the long-accepted pattern that middle-aged Americans take their own lives more often.
  2. Between 2019 and 2021, suicide fell among middle-aged adults while continuing to rise among younger adults.
  3. Suicide rates for middle-aged men fell after 2018 while rates for younger men rose, leaving men in their 20s with the highest suicide rate until age 75 or older, when suicides rise due to terminal illness.

Related Articles:

Wednesday, May 1, 2024

AI Summary. The authors estimate that immigration to the US over 2000-2019 raised wages of natives with a high school degree or less by 1.7% to 2.6%, a period when that group's real wages fell by 5% to 6%. Effects on more-educated natives ranged from -0.5% to +0.7%, with an overall average effect of +0.5% to +0.8% that was not statistically significant.

Alessandro Caiumi and Giovanni Peri National Bureau of Economic Research
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Between 2000 and 2019 a @giov_peri @ale_caiumi analysis finds immigration had a positive 1.7-2.6% impact on US non-college workers’ wages, as high-skilled immigrant labor complemented low-skilled native labor.

Does immigration raise or lower wages for less-educated native workers?

Core argument: The 2000–2019 immigrant inflow is estimated to have raised wages of natives with a high school degree or less by 1.7%–2.6%, attributed to immigrants' concentration among the college-educated and complementarity between college- and non-college-educated workers.

Three findings emerge from columns (1) to (4) of Table 9.  First, due to the relative concentration of new immigrants among college-educated and the complementarity between college- and non-college-educated, the immigrant inflow of 2000-2019 helped the wage growth of less-educated natives (those with high school degree or less) by between 1.7% and 2.6%. This represents a significant boost in real wages, especially considering that the real wage growth of this group during the 2000-2019 period was actually negative, between -5% to -6%. Second, in spite of the large inflow of college-educated immigrants, the complementarity between immigrants and natives, attenuated or reversed most  of the competition effect for the groups with some college education or a college degree. As a result, they also experienced between no and small effects (between -0.5% and +0.7%). Third, the average effect on wages of natives was small, overall positive (+0.5% to +0.8%) and not statistically significant.

Takeaways by Macro Roundup® AI

  1. The 2000–2019 immigrant inflow is estimated to have raised wages of natives with a high school degree or less by 1.7%–2.6%, attributed to immigrants' concentration among the college-educated and complementarity between college- and non-college-educated workers.
  2. Real wage growth for less-educated natives was negative over 2000–2019, between -5% and -6%, against which the estimated 1.7%–2.6% immigration effect represents a significant boost.
  3. Estimated effects on natives with some college or a college degree ranged from -0.5% to +0.7%, as complementarity between immigrants and natives attenuated or reversed most of the competition effect, while the average effect on native wages was a statistically insignificant +0.5% to +0.8%.

Related Articles:

  • Monopsony, Efficiency, and the Regularization of Undocumented Immigrants — A study of France's amnesty program, which regularized undocumented workers making up 2.0% of workers in Paris and nearly 1% nationwide, finds positive effects on employment and wages, particularly for male, low-skill workers. The authors argue regularization reduces employers' wage-setting power in the undocumented labor market, and estimate a rise in total French GDP of around 1%.
  • The Unexpected Compression: Competition at Work in the Low Wage Labor Market — Labor market tightness produced an unexpected compression in the US wage distribution, with disproportionate wage growth at the bottom reducing the college wage premium and reversing nearly 40% of the rise in 90-10 wage inequality since 1980. The authors attribute this in part to increased competition for low-wage workers.
  • Without Immigrants, US Working-Age Population Would Shrink — All net US employment growth since early 2020 has been among foreign-born workers, and without immigration the US working-age population would be shrinking — a pattern likely to persist for the rest of the decade. The jump in immigration appears to be enabling a soft landing that most economists had thought impossible.

AI Summary. Net migration into the rich world has surged, with annual inflows of 3.3m to America, 1.9m to Canada, 1.2m to Britain and 740,000 to Australia — record levels in each. While new arrivals boost total output, they appear to be dragging down output per person, which fell 2% in a year in Canada.

Economist Staff The Economist
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The rich world is in the midst of an unprecedented migration boom, with foreign-born populations growing at 4%/year, double the 2010s rate. Lower-skilled immigrants are driving down GDP per capita in Australia, Britain, and Canada.

Does surging immigration raise total output while lowering output per person?

Core argument: Net migration to America reached 3.3m last year, almost four times typical 2010s levels, while Canada took in 1.9m immigrants, Britain 1.2m and Australia 740,000 — records in each country.

The rich world is in the midst of an unprecedented migration boom. Last year 3.3m more people moved to America than left, almost four times typical levels in the 2010s. Canada took in 1.9m immigrants. Britain welcomed 1.2m people and Australia 740,000. In each country the number was greater than ever before. For Australia and Canada net migration is more than double pre-covid levels. In Britain, the intake is 3.5x that of 2019. Although new arrivals are clearly boosting GDP, they appear to be dragging down GDP per person. GDP per person has fallen or failed to grow for four consecutive quarters in Australia and seven in Britain. In Canada, where the drop in the measure is most pronounced, output per person fell by 2% in 2023. This reflects a shift in the type of immigration. For instance, whereas before the Covid-19 pandemic immigrants to America were as likely to have a bachelor’s degree as their local-born peers, today’s newcomers are more likely to have trekked from poor parts of Latin America and lack the right to legally work. About 2.4m people entered America last year by illegally crossing the country’s southern border.

Takeaways by Macro Roundup® AI

  1. Net migration to America reached 3.3m last year, almost four times typical 2010s levels, while Canada took in 1.9m immigrants, Britain 1.2m and Australia 740,000 — records in each country.
  2. GDP per person has fallen or failed to grow for four consecutive quarters in Australia and seven in Britain, and Canadian output per person fell by 2% in 2023, even as new arrivals boost overall GDP.
  3. Immigrants to America were as likely as locally born peers to hold a bachelor's degree before the Covid-19 pandemic, whereas today's newcomers more often come from poor parts of Latin America and lack the right to work legally, with about 2.4m crossing the southern border illegally last year.

Related Articles:

  • Without Immigrants, US Working-Age Population Would Shrink — All net US employment growth since early 2020 has been among foreign-born workers, and without immigration the US working-age population would be shrinking — a pattern likely to persist for the rest of the decade. The jump in immigration appears to be enabling a soft landing that most economists had thought impossible.
  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • New Immigration Estimates Help Make Sense Of The Pace Of Employment — The Congressional Budget Office estimates net immigration was 3.3m in 2023, versus the 1m it had projected, implying faster population and labor force growth than currently reported. The authors estimate this raised real economic growth by about 0.1 percentage point and, by lifting both production and demand, added little price or wage pressure.

AI Summary. US private sector union workers' wages rose 6.3% over 12 months, the largest increase in Bureau of Labor Statistics employment cost data going back to 2001, while nonunion private sector pay rose 4.1%, not much above inflation.

Alexandre Tanzi Bloomberg
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US private sector union workers’ wages rose 6.3% y/y – the largest increase since 2001, outpacing non-union workers’ 4.1% bump, which barely exceeded inflation.

Are union workers' wages rising faster than nonunion workers' pay?

Core argument: Private sector union workers' wages rose 6.3% in the year ended March, the largest increase in Bureau of Labor Statistics employment cost data going back to 2001.

Unionized workers in the US saw record raises, while nonunion workers’ pay barely beat inflation over the past 12 months, the latest government data show. Wages of private sector union workers rose 6.3% in the year ended in March, the largest increase in data back to 2001, according to Bureau of Labor Statistics employment cost figures released Tuesday. Meanwhile, non-union workers in the private sector saw a 4.1% bump in their salaries over the past 12 months, not much higher than inflation.

Takeaways by Macro Roundup® AI

  1. Private sector union workers' wages rose 6.3% in the year ended March, the largest increase in Bureau of Labor Statistics employment cost data going back to 2001.
  2. Nonunion private sector workers saw a 4.1% pay increase over the same 12 months, not much higher than inflation, according to Bureau of Labor Statistics figures.

Related Articles:

  • Pettis On American Labor Unions — Strong labor unions are incompatible with a global trading system in which countries that subsidize domestic production externalize those costs through large, persistent trade surpluses, according to this argument. The US must either reform that system or unilaterally limit its economy's role in absorbing global savings and production imbalances.
  • American Labor’s Real Problem: It Isn’t Productive Enough — U.S. manufacturing output per hour has grown about 0.2% a year since 2009, below the overall economy and peer economies in Europe and Asia except Japan, with motor vehicle manufacturing productivity falling 32% from 2012 through last year. Unlike warehouses and hospitals, manufacturers face foreign competition and cannot pass higher labor costs to customers.
  • Union Voters Could Be Decisive in 2024 — A declining union share of the electorate and weaker Democratic performance among union households have made Michigan, Pennsylvania, and Wisconsin more competitive, with white voters without college degrees making up majorities of the electorate in all three states. Unionized white non-college voters were less likely to back Trump than their non-union counterparts.

AI Summary. Bank of America internal data show the share of its customers receiving income from gig platforms reached 3.8% on a three-month moving average, above the prior peak, after stalling and then resuming an uptrend. Ridesharing has driven the increase and is now the largest gig category, while social commerce and delivery shares have moderated.

Joe Wadford and David Tinsley Bank of America
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A record 3.8% of @BankofAmerica customers received income from gig platforms in March, led by ridesharing, while delivery remains below late 2021 levels. This mirrors the pivot in consumer spending towards out-of-home services vs in-home goods.

Is the share of workers earning gig income rising?

Core argument: The three-month moving average share of Bank of America customers receiving gig platform income via direct deposit or debit card reached 3.8% in March 2024, above the prior peak in early 2022, according to Bank of America internal data.

Gig employment continues to increase. The three-month moving average of the share of Bank of America customers who received income from gig platforms through direct deposits or debit cards was 3.8% in March 2024, above the previous peak in early 2022. While gig employment stalled through 2022 as wage gains attracted workers to more traditional forms of employment, there was a renewed uptrend starting in spring 2023, according to Bank of America internal data. Bank of America data also shows that ridesharing has driven overall gig employment (Exhibit 2) over the past year and is now the gig type with the largest share of workers. Conversely, the share of Bank of America customers earning income from social commerce and deliveries has moderated since December 2021. This mirrors the pivot in consumer spending towards out-of-home services and away from in-home services and goods, with more people eating out, for example, rather than ordering in.

Takeaways by Macro Roundup® AI

  1. The three-month moving average share of Bank of America customers receiving gig platform income via direct deposit or debit card reached 3.8% in March 2024, above the prior peak in early 2022, according to Bank of America internal data.
  2. Gig employment stalled through 2022 as wage gains drew workers into more traditional employment, with a renewed uptrend beginning in spring 2023, according to Bank of America internal data.
  3. Ridesharing has driven overall gig employment over the past year and is now the gig type with the largest worker share, while the shares earning from social commerce and deliveries have moderated since December 2021, Bank of America data show.

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  • Just How Bad Is the US Cost-of-Living Squeeze? We Did the Math — It now takes $119.27 to buy what $100 purchased before the pandemic, with prices rising about as much since early 2020 as in the preceding decade. Groceries and electricity are each up 25% since January 2020, used cars 35%, auto insurance 33%, and rents roughly 20%.
  • Gig Work Back In Favor As Wages Slide — Bank of America internal data show the share of its customers receiving income from gig platforms rose to 3% from 2.7%, an increase concentrated in ridesharing and younger workers. An increased supply of ridesharing gig workers has driven average monthly ridesharing gig pay down.

AI Summary. China's push for self-sufficiency began in the mid-2000s, and its reliance on global supply chains for inputs into its products has declined alongside that strategy, alongside a doctrine of "comprehensive national security" spanning the economy and society. Analysts argue China now gauges national power in military capacity rather than purely economic terms, making manufacturing central.

Joe Leahy Financial Times
Date Posted:

Zhiwu Chen of HKU argues that increased domestic consumption in China is unlikely as CCP leadership no longer measures national power in economic terms, “but more importantly, in terms of military…capacity.”

Does China prioritize manufacturing and security over boosting consumer spending?

Core argument: China's drive for self-sufficiency began in the mid-2000s, long before Donald Trump's trade war, and its reliance on global supply chains for inputs into its products has decreased in line with that strategy.

The drive for self-sufficiency started in the mid-2000s, long before Donald Trump began his trade war. China’s reliance on global supply chains for inputs into its products has decreased in line with this strategy. In 2014, Xi introduced the concept of “comprehensive national security” encompassing multiple aspects of the economy and society, according to the EU Chamber report. “This has been going on for at least about 8-10 years,” says Zhiwu Chen, chair professor of finance at the University of Hong Kong, of China’s shift to an industrial policy that takes into account “war preparation”. Chen says China no longer measures its “national power” in purely economic terms “but more importantly, in terms of military . . . capacity. And this is why manufacturing is very important.”

Takeaways by Macro Roundup® AI

  1. China's drive for self-sufficiency began in the mid-2000s, long before Donald Trump's trade war, and its reliance on global supply chains for inputs into its products has decreased in line with that strategy.
  2. Xi Jinping introduced "comprehensive national security" in 2014, a concept spanning multiple aspects of the economy and society, according to the EU Chamber report.
  3. Zhiwu Chen, chair professor of finance at the University of Hong Kong, says China has spent at least 8-10 years shifting to an industrial policy that accounts for "war preparation" and measures national power by military capacity, not purely economic terms.

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  • Why Xi Can No Longer Brag About the Chinese Economy — China's shipyards build 46% of the world's ships, letting it produce several warships and submarines a year, while the U.S. holds under 1% of capacity and its Navy faces late, over-budget deliveries from a few yards lacking workers. China is also the largest drone producer.
  • China’s Shipyards Are Ready for a Protracted War. America’s Aren’t — China produced more than half of the world's commercial shipbuilding output, while Europe accounts for about 5% and the US next to nothing, with most of the remainder built in South Korea and Japan. Analysts argue that in a protracted conflict China's wartime-scale yards could quickly accelerate production, replace lost ships, and repair damaged ones.
  • What Will It Take for China’s GDP to Grow at 4–5 Percent Over the Next Decade? — China accounts for 18% of global GDP, 13% of global consumption, and 31% of global manufacturing. The author estimates that if China grew 4–5% annually for a decade while keeping manufacturing's role in its economy, its share of global manufacturing would reach 36–39%, requiring the rest of the world to let manufacturing's share of its output fall by 0.5–1.0pp.

AI Summary. The 1,114-megawatt Unit 4 reactor at Georgia's Plant Vogtle entered commercial operation, completing an 11-year expansion that brings the plant's capacity to nearly 5 gigawatts and makes it the largest US nuclear plant. No nuclear reactors are currently under construction in the United States, where nuclear supplies about 19% of electricity.

Slade Johnson Energy Information Administration
Date Posted:

Georgia Power’s Vogtle Unit 4, originally scheduled for 2017, entered commercial operations in March. Including Vogle Unit 3, the 2.4GW expansion cost over $30B, vs an initial estimate of $14B; nuclear plants account for 19% of US electrical production.

Has the largest US nuclear plant completed its long-running expansion?

Core argument: Plant Vogtle's 1,114 MW Unit 4 entered commercial operation after connecting to the grid in March 2024, completing an 11-year expansion that brings the Georgia plant's total capacity to nearly 5 GW.

Georgia Power announced this week that the 1,114-megawatt Unit 4 nuclear power reactor at Plant Vogtle near Waynesboro, Georgia, entered into commercial operation after connecting to the power grid in March 2024. The commercial start of Unit 4 completes the 11-year expansion project at Plant Vogtle. No nuclear reactors are under construction now in the United States. Vogtle Unit 3 began commercial operation in July 2023. The plant’s first two reactors, with a combined 2,430 MW of nameplate capacity, began operations in 1987 and 1989. The two new reactors bring Plant Vogtle’s total generating capacity to nearly 5 gigawatts making Vogtle’s four units the largest nuclear power plant in the United States. With a total installed capacity of about 97 GW, the largest commercial nuclear generating fleet of any country is located in the United States. The fleet of operating nuclear power reactors accounted for nearly 19% of domestic electricity production in 2023, making nuclear the second-largest source of U.S. electricity generation after natural gas, which accounted for 43% of electricity generation in the United States last year.

Takeaways by Macro Roundup® AI

  1. Plant Vogtle's 1,114 MW Unit 4 entered commercial operation after connecting to the grid in March 2024, completing an 11-year expansion that brings the Georgia plant's total capacity to nearly 5 GW.
  2. Plant Vogtle's four units form the largest nuclear power plant in the United States, combining reactors that began operating in 1987 and 1989 with Unit 3, which started commercial operation in July 2023.
  3. The United States hosts the largest commercial nuclear fleet of any country at about 97 GW of installed capacity, supplying nearly 19% of domestic electricity in 2023, second to natural gas at 43%, with no reactors under construction.

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  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • The Good, the Bad and the Ugly — Dominion Energy, which serves 6m customers, has raised its projected power needs for the coming decade, attributing the change to data center demand. McKinsey, BCG, and S&P Global all expect US power demand to grow 13%-15% annually through 2030, and rising transformer costs alongside electrification could make electricity scarcer.