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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…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
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…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
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, September 27, 2024

AI Summary. Official budget estimates generally exclude legislative proposals' likely effects on labor, capital, and productivity and the resulting feedback to the federal budget; these excluded effects are small for most proposals but have been estimated to be significantly different for some. Dynamic estimates would be far more time-consuming, and in some areas the research base is insufficient for credible estimation.

Douglas Elmendorf, Glenn Hubbard and Heidi Williams Brookings Papers on Economic Activity
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“Dynamic scoring” of budget proposals has both costs and benefits. “For some areas, the budgetary impacts of the currently excluded effects have been estimated to be significantly different from the impacts of the included effects.” @heidilwilliams_

Should official budget estimates include proposals' broader economic feedback effects?

Core argument: Official budget estimates for legislative proposals generally exclude effects on labor, capital, productivity, and other economic outcomes, along with feedback from those outcomes to the federal budget, effects that are small for most proposals.

By design, official budget estimates for legislative proposals generally exclude the proposals’ likely effects on levels of labor, capital, productivity, and other economic outcomes, as well as any feedback effects from changes in those outcomes to the federal budget. The excluded effects are small for most proposals. [But] for some areas, the budgetary impacts of the currently excluded effects have been estimated to be significantly different from the impacts of the included effects. Producing dynamic estimates would be substantially more time-consuming than producing conventional estimates, and in some areas, the research base needed to inform modeling of the relevant economic effects is insufficient for credible estimation. [As an example, compare] population-change approaches for a Section 80303-style proposal. Figure 2 summarizes their estimates of the effects on budget deficits over the next 20 years. The conventional estimate (the blue line) shows a slight increase in deficits, while the population-change approach (the red line) shows a decrease in deficits in the first decade and a much larger decrease in the second decade as lawful permanent residents naturalize and sponsor family members..

Takeaways by Macro Roundup® AI

  1. Official budget estimates for legislative proposals generally exclude effects on labor, capital, productivity, and other economic outcomes, along with feedback from those outcomes to the federal budget, effects that are small for most proposals.
  2. For a Section 80303-style proposal, the conventional estimate shows a slight increase in deficits over 20 years, while a population-change approach shows deficits decreasing in the first decade and falling much more in the second as lawful permanent residents naturalize and sponsor family members.
  3. Producing dynamic estimates would be substantially more time-consuming than conventional estimates, and in some areas the research base needed to model the relevant economic effects is insufficient for credible estimation.

Related Articles:

  • Policy Steps in the Federal Budget and Health Care to Achieve Sustainable Fiscal Conditions in the U.S. — The authors project that the US fiscal trajectory is unsustainable, with deficits and debt exceeding both historical norms and official projections, arguing that official forecasts understate how labor shortages raise health care prices in inefficient sectors. They argue that reducing health care spending, increasing capital, and fiscal retrenchment could restore sustainable fiscal conditions.
  • When Does Federal Debt Reach Unsustainable Levels? — The authors estimate that U.S. debt held by the public cannot exceed roughly 200% of GDP even under favorable market conditions, and that under current policy the ratio reaches 175–200% within about 20 years. After that point, they argue, no tax increases or spending cuts could avert default or inflationary debt monetization.

AI Summary. Real wage gains for non-managerial workers, roughly 80% of the private workforce, exceeded both those of all workers and projections based on pre-pandemic trends, which is attributed to labor market tightness and strong demand in low-wage sectors. This compression of wage inequality has persisted even as the labor market cooled and unemployment rose above 4%.

Arin Dube Arin's Substack
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Real wages for non-managerial workers, who make up 80% of the private workforce, are above their pre-pandemic trend, while wages for all workers remain below the pre-pandemic trend. @arindube

Have real wage gains for lower-paid workers reduced wage inequality?

Core argument: Real wage gains for non-managerial workers, roughly 80% of the private workforce, exceeded those of all workers in 2021–2023 and outpaced projections based on pre-pandemic trends.

The post-pandemic recovery was marked by continued tightness in the labor market, driving wages for non-managerial workers beyond pre-pandemic expectations. This is especially evident in the data for 2021-2023, where real wage gains for non-managerial workers exceeded those of all workers. In fact, wage growth in this group outpaced projections based on pre-pandemic trends, reflecting the intense demand for labor in low-wage sectors. These trends suggest that tight labor markets helped reduce wage inequality, as employers had to raise wages to attract and retain workers in non-managerial roles, which make up roughly 80% of the private workforce. Even as the labor market has cooled somewhat over 2024, and unemployment has climbed above 4%, real wage growth has been strong, and the reduction in inequality has persisted.

Takeaways by Macro Roundup® AI

  1. Real wage gains for non-managerial workers, roughly 80% of the private workforce, exceeded those of all workers in 2021–2023 and outpaced projections based on pre-pandemic trends.
  2. Continued labor market tightness in the post-pandemic recovery drove wages for non-managerial workers beyond pre-pandemic expectations, reflecting demand for labor in low-wage sectors that pushed employers to raise pay to attract and retain workers.
  3. Even as the labor market cooled over 2024 and unemployment climbed above 4%, real wage growth remained strong and the reduction in wage inequality persisted.

Related Articles:

  • 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.
  • Has Pay Kept Up With Inflation? — All four measures of typical and aggregate pay have grown since 2019 when adjusted using the personal consumption expenditures price index, but show smaller increases in three measures and a decline in one when adjusted using the consumer price index. This pattern of smaller gains under consumer price index adjustment holds across time periods.
  • On Average, American Wage Earners are Better Off Than They Were Four Years Ago — Average US wages have now outpaced average price inflation over the past four years, after a stretch in which prices had risen faster than wages. Wage growth has continued even as price growth moderated.

AI Summary. Harmonised labour force surveys across Western countries show rates of activity-limiting health conditions have risen markedly among people in their twenties and thirties in the UK, US, Ireland and Sweden, with little change among older groups. Receipt of health-related disability benefits shows a similar pattern, rising among young adults and led by the UK and Ireland.

John Burn-Murdoch Financial Times
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Across the West, the age curve of activity-limiting health conditions has flattened due to a rise in disability rates among people in their 20’s and 30’s. “But there is little change — or even a reduction — further up the age distribution.” @jburnmurdoch

Are health-related work limitations and disability benefits rising among young adults?

Core argument: Harmonised labour force surveys across the West show the age curve of activity-limiting health conditions has flattened considerably in countries including the UK, US, Ireland and Sweden, with disability rates rising markedly among people in their twenties and thirties.

Using harmonised labour force surveys from across the west, I find that the age curve of activity-limiting health conditions has flattened considerably in many countries including the UK, US, Ireland and Sweden. Rates of disability have risen markedly among people in their twenties and thirties, but seen little change among older groups. I find that awards of health-related benefits show strikingly similar patterns, with the receipt of disability benefits among young adults rising in several countries, led by the UK and Ireland. But there is little change — or even a reduction — further up the age distribution.

Takeaways by Macro Roundup® AI

  1. Harmonised labour force surveys across the West show the age curve of activity-limiting health conditions has flattened considerably in countries including the UK, US, Ireland and Sweden, with disability rates rising markedly among people in their twenties and thirties.
  2. Rates of activity-limiting health conditions have changed little among older age groups even as they rise markedly among people in their twenties and thirties.
  3. Awards of health-related benefits follow strikingly similar patterns, with disability benefit receipt among young adults rising in several countries, led by the UK and Ireland, while showing little change or a reduction further up the age distribution.

Related Articles:

  • Further Evidence on the Global Decline in the Mental Health of the Young — Across cross-country survey data, the age pattern of reporting frequent unhappiness and depression reversed: one wave sloped upward with age while a later wave sloped downward, and women report more unhappiness. Young people with poorer mental health spend more daily time in front of a screen.
  • Disability Prevalence is Rising Alongside Employment — Reported disability among people aged 25-54 has risen about 0.9 percentage points to 6.9%, nearly 1.3m additional people and a 16% increase in that population. Increases in reported cognitive difficulties have been concentrated among younger people, rising about 1.1 percentage points for ages 16-34 and 0.7 points for ages 35-44 — at least 25% increases in prevalence.
  • Not Working, Out-of-School Young Adults in the U.S. by Race and Geography — More than a third of U.S. young adults reported no salary or wages, and 13.3% were neither in school nor working outside the summer months, down slightly from a record 14%. Disconnection rates are highest in rural areas (1 in 5) and among young Black adults, reaching 29.1% in rural areas.

AI Summary. A meta-analysis of 56 studies found that disorder policing consistently reduces crime, but that indiscriminate "aggressive order maintenance" arrests did not significantly reduce crime while problem-oriented strategies targeting specific sources of disorder often had sizable effects without spillovers. The authors note that a large share of disorder comes from a small number of people and places.

Charles Fain Lehman The Causal Fallacy
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Crime statistics miss the rise in public disorder, which @CharlesFLehman describes as the “domination of public space for private purposes.” He argues that police should focus their resources on phenomena like homelessness, litter, and graffiti.

Does targeted disorder policing reduce crime more than indiscriminate arrests?

Core argument: An updated meta-analysis of 56 studies of disorder policing found that such policing consistently reduces crime, though some approaches work better than others.

Police can deter disorder simply by being a visible presence in communities. But they also can strategically target sources of disorder, helping to bring it to levels where the community can keep it under control. A recently updated meta-analysis of 56 studies of disorder policing found that such policing consistently reduces crime. But some approaches work better than others. The authors note that “aggressive order maintenance strategies”—arresting people indiscriminately—did not significantly reduce crime. But problem-oriented strategies, which tried to identify and redress specific sources of disorder, had often sizable effects without spill-overs. This last insight is an important one for thinking about disorder (and crime more generally). A large share of disorder is generated by a small number of people and places—one drunk or one vacant lot, one uncontrolled bar or one guy shouting on the street, can ruin the whole experience for everyone else. Identifying these problem places and people, and remediating them—not exclusively through the criminal justice system—can bring disorder under control.

Takeaways by Macro Roundup® AI

  1. An updated meta-analysis of 56 studies of disorder policing found that such policing consistently reduces crime, though some approaches work better than others.
  2. The meta-analysis authors found that aggressive order maintenance strategies involving indiscriminate arrests did not significantly reduce crime, while problem-oriented strategies targeting specific sources of disorder often had sizable effects without spillovers.
  3. A large share of disorder is generated by a small number of people and places, so identifying and remediating those problem places and people—not exclusively through the criminal justice system—can bring disorder under control.

Related Articles:

  • The Collapse of Broken-Windows Policing in New York City, Los Angeles, and Washington, DC, 2013–22 — Arrests for minor "broken-windows" offenses—counted as misdemeanors, violations, and infractions per 100,000 residents—fell 74% in New York, 77% in Washington, DC, and 81% in Los Angeles over the period studied, declining steadily in New York and Los Angeles.
  • Changes in Self-Reported Cannabis Use in the United States From 1979 to 2022 — US survey data show per capita reports of past-year cannabis use rose 120% and reported days of use rose 218% over a recent 14-year span, with a 15-fold increase in daily or near-daily use reported over three decades. Daily or near-daily cannabis users now outnumber comparable alcohol users (17.7m vs 14.7m), though far more people drink.
  • Criminal Victimization, 2023 — The U.S. rate of violent victimization — including rape or sexual assault, robbery, aggravated assault, and simple assault — was 22.5 per 1,000 persons age 12 or older, statistically unchanged from the prior year and from five years earlier. The rate declined over the prior three decades from 79.8 per 1,000.

AI Summary. An election forecasting model shows Harris leading national polls by 3 points, with weaker polling in Arizona discounted because that state is relatively unlikely to be the tipping-point state. The model identifies Pennsylvania, Michigan and Wisconsin as her most direct path, with North Carolina and Georgia as alternatives.

Nate Silver and Eli McKown-Dawson Silver Bulletin
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The latest @NateSilver538 update shows Harris leading in the national popular vote by 3pp. His model shows a 58.1% probability of Harris winning the electoral college – still a toss-up, but he notes “you’d probably rather have Harris’s hand to play.”

Which states matter most to the leading candidate's path to victory?

Core argument: National polls in the Silver Bulletin forecast show Kamala Harris's lead expanding to an even 3 points, and the model read the new polling as mostly favorable to Harris.

A lot of polling since our last update, and the model mostly liked it for Harris — especially the national polls, which show her lead expanding to an even 3 points. There were exceptions, notably in Arizona, though the model somewhat shrugs Arizona polling off since it’s relatively unlikely to be the tipping-point state, making it among the less critical swing states. Instead, Plan A for Harris runs through Pennsylvania, Michigan and Wisconsin — and Plan B involves North Carolina, Georgia or both.

Takeaways by Macro Roundup® AI

  1. National polls in the Silver Bulletin forecast show Kamala Harris's lead expanding to an even 3 points, and the model read the new polling as mostly favorable to Harris.
  2. Arizona polling ran against Harris, but the Silver Bulletin model discounts it because Arizona is relatively unlikely to be the tipping-point state, placing it among the less critical swing states.
  3. Harris's Plan A to win runs through Pennsylvania, Michigan and Wisconsin, with Plan B involving North Carolina, Georgia or both, according to the Silver Bulletin forecast.

Related Articles:

Monday, September 30, 2024

AI Summary. Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.

Kenan Fikri, Sarah Eckhardt and Benjamin Glasner Economic Innovation Group
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Transfer payments made up 18% of all US personal income in 2022, up from 8% in 1970. Social Security/Medicare made up 56% of the increase from 1970 to 2022, and income maintenance programs/Medicaid accounted for 35%. @kenanfikri @BenGlasner

How much have government transfers grown as a share of personal income?

Core argument: Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, ranking third as an income source after work and investments.

Transfers’ share of Americans’ total personal income has more than doubled over the past 50 years, from 8.2% in 1970 to 17.6% in 2022. They are the third largest source of Americans’ personal income, after income from work and investments. The average American received $11,500 in income from government transfers in 2022, compared to $40,500 in income derived from work and $12,900 from investments. Today, most U.S. counties depend on a level of government transfer income that was once reserved only for the most distressed places. In 1970, not even 1% of counties derived a quarter or more of their total personal income from transfers. In 2000, just 10.4% did. But by 2022, 53% of counties were receiving a quarter or more of their income from transfers. Increasing participation (as populations age) and rising underlying costs (driving up the expense of health-related programs, in particular) are the most significant factors at play. Income maintenance programs only account for 11.4% of the real increase in transfers from 1970 to 2022. In stark contrast to the rising elderly share of the population, the poor share has been stable.

Takeaways by Macro Roundup® AI

  1. Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, ranking third as an income source after work and investments.
  2. In 2022, 53% of U.S. counties derived a quarter or more of total personal income from transfers, up from 10.4% in 2000 and under 1% in 1970.
  3. Rising participation as populations age and rising underlying costs, particularly for health-related programs, are the most significant factors behind the increase, while income maintenance programs account for 11.4% of the real rise in transfers from 1970 to 2022.

Related Articles:

  • The Distribution of Household Income in 2021 — Income after transfers and taxes grew most for households in the highest quintile, a rate that would have been nearly the same without temporary pandemic policies such as recovery rebate credits, expanded unemployment compensation, and the expanded child tax credit. Those policies raised average income in the lowest quintile to $48,700 from $41,200 without them.
  • The Impact of Unconditional Cash Transfers on Consumption and Household Balance Sheets: Experimental Evidence from Two US States — In a randomized experiment giving 1,000 individuals $1,000 per month, the authors estimate spending rose in most categories, most for housing, food, and car expenses, along with increased housing moves. Debt rose steadily to $1,600 higher by the study's end, and estimated net worth effects turned to roughly -$2,800.
  • Welfare Is What’s Eating the Budget — The U.S. redistributes 29.4% of its gross domestic product through transfers and taxes, a larger share than any developed country except France at 30.1%. Counting transfers as income and taxes as income lost and adjusting for household size, average households in the bottom, second, and middle income fifths have roughly equal incomes despite large differences in work effort.

AI Summary. New business applications, including those likely to become employer firms, surged during the pandemic and were followed by a rise in establishment and firm creation, consistent with reallocation toward high-tech and pandemic-friendly industries and from city centers to suburbs and the South. Business formation remains elevated relative to pre-pandemic levels, though cooling.

Ryan Decker and John Haltiwanger Working Paper
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.@JHaltiwanger_UM @UpdatedPriors document the continued high rate of new business formation by “likely employers” since 2020, and argue that “the pandemic and its aftermath featured a surge in genuine entrepreneurial employer business creation.”

Has the pandemic surge in new business creation held up?

Core argument: Applications for new businesses, including those with characteristics indicating potential to become employer businesses, surged beginning in the summer of 2020, followed in 2021 by a surge in employer entry measures covering both establishment and firm creation.

Applications for new businesses—including those with characteristics indicative of potential to transition to true employer businesses—surged starting in the summer of 2020. The surge in applications was followed in 2021 with a surge in measures of employer entry, including both establishment and firm creation, consistent with reallocation of economic activity toward pandemic-friendly and high tech industries and the geographic reallocation of activity from city centers to suburbs and from the northeast to the south and sunbelt regions. The high tech dimension has been particularly notable. Establishment births from the BLS Business Employment Dynamics (BED) through 2023:Q4. [which] include new establishments from both entirely new companies and existing firms opening new locations, started to rise late in 2020, rapidly increasing in 2021, and [remaining] elevated even while cooling recently. We provide overwhelming evidence that the pandemic and its aftermath featured a surge in genuine entrepreneurial employer business creation, and we show that measures of business formation have remained elevated relative to pre-pandemic levels even recently—though with clear signs of cooling.

Takeaways by Macro Roundup® AI

  1. Applications for new businesses, including those with characteristics indicating potential to become employer businesses, surged beginning in the summer of 2020, followed in 2021 by a surge in employer entry measures covering both establishment and firm creation.
  2. The surge in employer business creation is consistent with reallocation of activity toward pandemic-friendly and high tech industries and geographically from city centers to suburbs and from the northeast to the south and sunbelt regions.
  3. Establishment births in the BLS Business Employment Dynamics data, which include new locations opened by existing firms as well as entirely new companies, rose late in 2020, increased rapidly in 2021, and remain elevated through 2023:Q4 while cooling.

Related Articles:

  • 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.
  • Surging Business Formation in the Pandemic: Causes and Consequences? — Shifts in consumer demand and in preferences for work and lifestyle during the pandemic created entrepreneurial opportunities, and applications to start businesses produced new firms and establishments that hired workers in large numbers. The authors argue these new businesses drew in quitting workers as founders or hires, implying economic restructuring across industry, geography, and firm size and age.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. Labor force participation among US men ages 25 to 34 has not grown in a decade, standing at 89%, which one analysis of Bureau of Labor Statistics data estimates is more than 700,000 fewer participants than at 2004 rates; women's participation in that age group is up 6 percentage points over 10 years, to 79%.

Rachel Wolfe Wall Street Journal
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In August, the labor force participation rate for women aged 25-34 hit a record 78.5%. The male rate for that cohort was 89.1%, which implies 700,000 fewer male workers than would their 2004 participation rate.

Are young men's labor force participation rates falling behind women's?

Core argument: As of August, 89% of U.S. men ages 25–34 were employed or looking for work, more than 700,000 fewer than if participation matched 2004 levels, according to Aspen Economic Strategy Group policy director Luke Pardue's analysis of Bureau of Labor Statistics data.

More women ages 25 to 34 have entered the workforce in recent years than ever. The share of young men in the labor market, meanwhile, hasn’t grown in a decade. As of August, 89% of this cohort of men were employed or looking for work, more than 700,000 fewer than if the current labor-force participation rate was at 2004 levels, according to an analysis of Bureau of Labor Statistics data by Aspen Economic Strategy Group policy director Luke Pardue. Women’s participation is up 6 percentage points in just the past 10 years, to 79%. A fifth of men in this same age range still lived with their parents as of 2023, according to the Census, compared with 12% of women.

Takeaways by Macro Roundup® AI

  1. As of August, 89% of U.S. men ages 25–34 were employed or looking for work, more than 700,000 fewer than if participation matched 2004 levels, according to Aspen Economic Strategy Group policy director Luke Pardue's analysis of Bureau of Labor Statistics data.
  2. Labor-force participation among women ages 25–34 rose 6 percentage points over the past 10 years to 79%, while the share of young men in the labor market has not grown in a decade.
  3. A fifth of U.S. men ages 25–34 lived with their parents as of 2023, compared with 12% of women in the same age range, according to the Census.

Related Articles:

  • Bringing Home the Bacon: Have Trends in Men’s Pay Weakened the Traditional Family? — Using the 25th percentile of pretax earnings among married sole-breadwinner fathers aged 25–29 as a marriageability threshold, the author estimates the share of young single men earning below it moved from 63% to 58% over four decades. Using an earlier baseline year instead yields a larger change, from 72% to 57%.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • Men’s Falling Labor Force Participation Across Generations — Each successive generation of prime-age men has shown higher rates of not participating in the labor force, with millennials starting at a higher level and declining more steeply into their mid-30s, a pattern driven by school enrollment. Given rising educational attainment, the authors suggest the sustained rise in male nonparticipation may slow, which could benefit economic growth.

AI Summary. U.S. industrial policy has pledged over $2.1tn in investment incentives, and private investment in manufacturing building construction has nearly tripled since 2019, outpacing building construction investment overall. Of 3.8m manufacturing positions projected to open by 2033, only about half are likely to be filled, with nearly 75% of the gap attributed to retirements.

Benn Steil and Elisabeth Harding Council on Foreign Relations
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.@BennSteil cites investment in new manufacturing facilities and argues, “By 2033, 3.8 million new positions will open, yet only half of these are likely to be filled” due to retirement-linked withdrawals from the manufacturing labor force.

Are there enough workers to fill new manufacturing jobs?

Core argument: U.S. manufacturing is projected to open 3.8 million new positions by 2033, yet only about half are likely to be filled, with nearly 75% of the employment gap owing to retirements.

In order to make supply chains more resilient, boost domestic manufacturing, and compete with China in “strategic” industries, the Biden administration has—across the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and CHIPS and Science Act—pledged over $2.1 trillion in investment incentives. As a result, private investment in construction of manufacturing buildings has almost tripled since 2019—rising significantly more rapidly than investment in building construction overall. However, the United States lacks the human capital to man a manufacturing boom. By 2033, 3.8 million new positions will open, yet only half of these are likely to be filled. Nearly 75% of this employment gap will owe to retirements. A quarter of U.S. manufacturing workers are over the age of 54, and those between 55 and 64 leave the industry at a higher rate than do those in other industries.

Takeaways by Macro Roundup® AI

  1. U.S. manufacturing is projected to open 3.8 million new positions by 2033, yet only about half are likely to be filled, with nearly 75% of the employment gap owing to retirements.
  2. The Biden administration has pledged over $2.1 trillion in investment incentives across the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and CHIPS and Science Act to boost domestic manufacturing and compete with China in strategic industries.
  3. Private investment in construction of manufacturing buildings has almost tripled since 2019, rising significantly faster than investment in building construction overall, while a quarter of U.S. manufacturing workers are over the age of 54.

Related Articles:

  • Business Spending Is Lining Up to Reinforce Growth — Around 70% of sectors are posting positive year-over-year profit growth, with big tech showing the largest acceleration in demand and profits but strength broadening across the economy. Companies are responding with rising capital spending growth and more optimistic investment plans, as firms typically add capacity with a slight lag after real demand picks up.
  • Does Worker Scarcity Spur Investment, Automation and Productivity? Evidence from Earnings Calls — The authors estimate that a one-unit increase in a firm's labor issues, as measured by earnings calls, raises its investment by 28 basis points, implying roughly $55bn in additional US investment attributable to tighter labor markets. The effect is concentrated in industries relying heavily on routine manual tasks, such as manufacturing assembly and warehouse packaging.
  • The Mysterious Slowdown in U.S. Manufacturing Productivity — US manufacturing labor productivity growth slowed broadly after the Great Recession, with the four largest firms in each industry averaging –0.5% growth from 2010 to 2022 versus 3.7% from 1987 to 2007, and smaller follower firms showing an identical 4.2 percentage-point decline. The authors find the slowdown spans all industries and firm sizes.

AI Summary. The National Academy of Sciences estimates that the average U.S. immigrant without a high-school diploma receives $109,000 more in government benefits than they pay in taxes over a lifetime, in 2012 dollars. An economist argues that counting taxes on the capital income immigrant labor helps generate—roughly 80 cents per dollar of labor income—turns that into a net $128,000 contribution.

Tom Fairless Wall Street Journal
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.@m_clem estimates that every dollar of labor income paid to an immigrant also generates “roughly 80 cents of capital income.” Instead of costing the Treasury $109,000, US immigrants with less than a high school diploma, contribute a net $128,000.

Does counting taxes on capital income change immigrants' fiscal impact?

Core argument: The National Academy of Sciences estimated in 2017 that the average U.S. migrant without a high-school diploma will receive $109,000 more in government benefits than they pay in taxes over a lifetime, in 2012 dollars.

In the U.S., the National Academy of Sciences in 2017 published detailed estimates of the fiscal costs of various migrant groups. They suggest that the average migrant with less than a high-school diploma will receive $109,000 more in benefits from all levels of government than they pay in taxes over their lifetimes. The figures are expressed in 2012 dollars. Employers pay immigrants to work because that labor adds value to their capital, and their capital income is subsequently taxed, said Michael Clemens, professor of economics at George Mason University. Revenue from taxes on capital (profits, dividends, and capital gains) should therefore be added to immigrants’ fiscal contribution, he said. Clemens estimates that for every dollar of labor income, there are roughly 80 cents of capital income. Adding that factor to the National Academy of Sciences’ calculations, he finds a migrant in the U.S. with less than a high-school education actually contributes a net $128,000 over his or her lifetime to the U.S. Treasury, rather than subtracting $109,000.

Takeaways by Macro Roundup® AI

  1. The National Academy of Sciences estimated in 2017 that the average U.S. migrant without a high-school diploma will receive $109,000 more in government benefits than they pay in taxes over a lifetime, in 2012 dollars.
  2. Michael Clemens, professor of economics at George Mason University, argues that taxes on capital income — profits, dividends, and capital gains — should be counted in immigrants' fiscal contribution, since employers pay immigrants because their labor adds value to capital.
  3. Clemens estimates roughly 80 cents of capital income per dollar of labor income, and adding that factor to the National Academy of Sciences' calculations yields a net lifetime contribution of $128,000 to the U.S. Treasury rather than a $109,000 shortfall.

Related Articles:

  • How Immigration Remade the U.S. Labor Force — The Congressional Budget Office estimates more than 9m people have migrated on net to the U.S. in recent years, nearly matching the prior decade's total and lifting population growth to almost 1.2% a year. Fewer than 30% are lawful permanent residents; without immigration, growth would be 0.2%.
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AI Summary. The Centers for Disease Control and Prevention reported a possible cluster of eight bird-flu cases in Missouri, which could represent the first person-to-person transmission of the H5N1 virus in the United States. Infections in seven of the individuals, a household member and six healthcare workers, have not been confirmed, leaving open other flulike illnesses.

Apoorva Mandavilli and Emily Anthes New York Times
Date Posted:

The CDC reported that the cluster of possible bird flu infections in Missouri has expanded to 8 people in what may be the first known person-to-person transmission of the virus in the US.

Is bird flu spreading from person to person in the US?

Core argument: The CDC reported a possible Missouri bird-flu cluster expanding to eight people, potentially the first instances of person-to-person H5N1 transmission in the United States.

A possible cluster of bird-flu infections in Missouri has grown to include eight people, in what may be the first examples of person-to-person transmission in the United States, the Centers for Disease Control and Prevention reported on Friday. If confirmed, the cases in Missouri could indicate that the virus may have acquired the ability to infect people more easily. Worldwide, clusters of bird flu among people are extremely rare. Most cases have resulted from close contact with infected birds. Health officials in Missouri initially identified a patient with bird flu who was hospitalized last month with unusual symptoms. The patient may have infected one household member and six healthcare workers, all of whom developed symptoms, according to the C.D.C. Investigators have not yet confirmed whether any of those seven individuals were infected with the virus, called H5N1, leaving open the possibility that they had Covid or some other illness with flulike symptoms.

Takeaways by Macro Roundup® AI

  1. The CDC reported a possible Missouri bird-flu cluster expanding to eight people, potentially the first instances of person-to-person H5N1 transmission in the United States.
  2. Missouri health officials identified a hospitalized bird-flu patient with unusual symptoms who may have infected one household member and six healthcare workers, all of whom developed symptoms, according to the CDC.
  3. Investigators have not confirmed H5N1 infection in any of the seven additional individuals, leaving open the possibility they had Covid or another illness with flulike symptoms.

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  • Is Bird Flu Spreading Among People? Data Gaps Leave Researchers In The Dark — A US bird flu infection in a person with no known contact with animal carriers, alongside illness in two close contacts, has left researchers awaiting data to determine whether human-to-human transmission has emerged. Gaps in surveillance persist because some states do not require farmers to test dairy cattle for the virus.
  • How the Current Bird Flu Strain Evolved to be So Deadly — A Nature study tracking bird flu genome changes and reported outbreaks found the virus spread three times faster among wild birds than farmed poultry, attributed to mutations letting it adapt to diverse species. Outbreaks, once seasonal with Northern Hemisphere bird migration, have become persistent, killing millions of birds across five continents.
  • The Bird Flu Virus Adapted to Sea Mammals. It May Not Be Done Yet — A genetic analysis indicates the H5N1 bird flu virus jumped at least three times from wild birds to marine mammals along South America's Pacific coast and then acquired mutations enabling spread between elephant seals, which died in large numbers. The authors warn the virus could similarly adapt to cause large-scale infections in other mammals, including humans.