(What’s Left of) Our Economy: Amazon’s Fishy HQ Decision

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Alexandria, Amazon, D.C., education, Long Island City, New York City, STEM workers, tech, The Partnership for New York City, Washington, {What's Left of) Our Economy

Everyone who’s followed Amazon’s highly publicized search for a second headquarters site (which wound up choosing second and third headquarters sites) knows that New York City and the Washington, D.C. suburb of Arlington, Virginia were selected because of their abundant supply of world-class tech workers. Or at least that’s what the on-line retail behemoth said.

Except a leading business group from New York – which has applauded the city’s win – has just come out with some projections completely belying this claim.

According to The Partnership for New York City, “Amazon is the first tech mega-company headquarters to locate in New York City, a breakthrough that will solidify the city’s future as a leader in the world’s fastest-growing industry.”

But in its latest quarterly Dashboard NYC, which tracks leading indicators of the city’s economic performance, The Partnership also forecast that, of the 25,000 net new jobs likely to be created directly by the new Amazon facilities in Long Island City, Queens, and the nearly 90,000 increase in the region’s payrolls that will be generated indirectly, 68 percent won’t require a high school education. In fact, 18 percent won’t even require any formal schooling. And another ten percent will be fill-able by folks with only some post-high school education.

As a result, fewer than one-third of these jobs (some 32,000) will require a bachelor’s degree of some kind. It’s true that a relevant college or graduate degree isn’t needed for success in technology (as most dramatically demonstrated by the founding of Microsoft by Harvard dropout Bill Gates, and the creation of Apple by Reed College dropout Steve Jobs). Indeed, a recent analysis of Census Bureau data reports that fully 35 percent of the country’s science, technology, engineering, and math (STEM) workforce lacks a bachelor’s degree, and that 80 percent of this subgroup have had only some college courses.

But it’s also true that far from all of the 32,000 total Amazon-created jobs that will require completing an undergraduate college education will be science and tech positions. For instance, many will certainly come in managerial or administrative positions at Amazon itself, and in all non-Amazon companies that add new hires because of Amazon, or that are created because of Amazon, that won’t require a special tech background.

I’m certainly not qualified to second-guess Amazon’s decisions. And maybe the situation in the Washington, D.C. area is significantly different (though this article indicates that it’s not – albeit not in the way you may think). What does seem clear, though, is that the company hasn’t been leveling with the rest of the country (or the world) about its new headquarters decision. And when the dissembler is the world’s second largest U.S.-based publicly traded non-government employer (behind WalMart), that should raise a question or two.

Im-Politic: Immigration’s Essential – but Elusive – Assimilation Dimension

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assimilation, bilingualism, burkini, France, Hispanics, Im-Politic, Immigration, multiculturalism, Muslims, New York City, Princeton University, reconquista, secularism, terrorism

Donald Trump’s trip to Mexico today is once again focusing national attention on immigration issues. But since I wrote Monday about the Republican presidential candidate’s self-inflicted wounds on this front, and how he can fix them, there’s not much point to returning to the subject as such until Trump has finished his talks with Mexico’s, President Enrique Pena Nieto, and then delivered an eagerly awaited speech on his overall strategy and key details.

Instead, let’s deal today with what might be called the other side of the immigration coin – assimilation. I’ve long suspected that its recent U.S. policy failures on this front that account for much of the restrictionist camp’s fervor. (It’s certainly loomed large in my own thinking.) That is, I believe there would be much more support from current immigration policy critics for greater inflows and even for some form of legalization of current illegals if they had any reason to believe that government at any level would take seriously the challenge of ensuring that newcomers and the existing illegal population learn about and adopt the core values and shared identity so largely responsible for America’s unprecedented success.

At the same time, some news over the last month should remind all Americans that, however necessary, effective assimilation policies are easier supported than formulated. And I’m now convinced that the challenges will continue growing ever greater even if political will was not lacking. For that conclusion, thank the “burkini.”

Immigration waves of course have always triggered opposition for a variety of reasons – and have included subversion of “Americanism.” But it’s easy to dismiss most of this particular objection as thinly disguised prejudice because civic education was such a priority national mission. I’m not a fan of anecdotes, but here’s a relevant family story.

My father’s parents came to this country from Lithuania in the early twentieth century, along with millions of other Eastern and Southern Europeans. As with so many from the former region, they quickly settled in an overwhelmingly Eastern European New York City Jewish neighborhood where English was rarely used. Similar quasi-voluntary ghetto-ization was the experience of numerous other immigrant groups in their new Northeastern and Midwestern urban homes.

Fast forward to 1929. My five-year old father has just entered kindergarten, and like many classmates barely speaks any English because it was largely absent not only in the playground or the synagogue or the delicatessen or butcher shop. It wasn’t spoken at home, either, because his parents’ knowledge was still pretty elementary. Fortunately, he had a more practical aunt who admonished them to get with the English program in order to improve his chances of academic success.

But even more important, my father told me many times that, despite his early linguistic limitations, in retrospect nothing was (subconsciously) clearer to his little-kid mind than that a major purpose of his schooling was to turn him into what he called “a little American.”

In recent decades, how many parents and students out there can honestly say that that’s been their own experience or their children’s experience? If anything, schools today at all levels often seem to be sending the opposite message. In my step-son’s prep school, which was actually on balance very responsible in educating rather than propagandizing students, he was nonetheless urged to think like a global citizen. My own alma mater recently changed its informal motto from former President Woodrow Wilson’s “Princeton in the Nation’s Service” to (the much stylistically clumsier) “Princeton in the Nation’s Service and the Service of Humanity.”

Not that there aren’t often broad overlaps between national interests and worldwide interests. But this overlap isn’t always present. So when they conflict, what does Princeton want its students to do? And for my son’s less ambiguous school, who defines those global interests and their supposed citizenship responsibilities? What political community other than one that is national in scope enjoys the necessary legitimacy (provided of course that the government is reasonably accountable to its population)?

And lest you believe that schools are the only possible channels of civic education – or the main obstacles – think of the rampant bi- and multi-lingualism that’s overcome broad swathes of the country. Its most recent – and one of its most absurd – extensions has been New York City’s decision to relieve cab drivers of the requirement of speaking English proficiently.

So I hope I’ve established my pro-assimilation street cred – and the case that this ideal has greatly weakened in recent decades. And yet a huge fly has just been stuck in this ointment, in the form of the burkini controversy in France. It seems pretty clear to all thinking people that the ban by certain French beach towns of the full-body swimwear worn by many devout Muslim women has taken the push-back against multi-culturalism way too far – and in an ironically misogynistic way. But what’s most important about this episode is its reflection of France’s longstanding national approach to assimilation – which is often described as “aggressive secularism.”

In other words, you can make a strong argument that France has followed the assimilation-ist route that I’ve just endorsed. And it’s even easier to argue that, as numerous riots and bloody terrorist attacks over the last decade make tragically clear, this approach has failed miserably.

Not surprisingly, any number of explanations have been offered, ranging from widespread economic and social discrimination faced by French Muslims; to the transformation of France’s secularism into an intolerant faith itself; to Islam’s inherent nature as a religion with a prominent public and political dimension that is fundamentally incompatible with even genuinely tolerant secularism.

It’s tempting to point out that France’s history with immigration and assimilation simply isn’t relevant to the U.S. immigration debate nowadays, in part because America’s national identity has never been based on “blood and soil,” but on an ideology that is largely pluralistic itself; and in part because the Hispanic-origin population at the latter’s center doesn’t hold such separatist views. In other words, it’s often argued, the host country here has always faced fewer obstacles towards integrating newcomers, and today’s immigrants are anxious to be integrated.

Nonetheless, reasons for doubting these integrationist claims have resulted from many Hispanics’ distinctive insistence on bilingualism, as well as from periodic calls from the Mexican-American community in particular for a “reconquista” (“reconquering”) of American territory annexed by the United States after the Mexican war of 1848. And don’t forget the bi-national lifestyles (called “circular migration” by specialists) of so many Mexican-Americans, which tend to undermine the closely related ideas of borders and distinct political communities.

I’m still confident that a truly successful U.S. immigration policy absolutely requires a more successful approach to assimilation, for political reasons but also for the health of our society.  But France’s experience has made me a lot less confident that the goal will be achieved any time soon even if enough of the nation was on board. 

(What’s Left of) Our Economy: How Not to Rate the States’ Economies – & Their Prospects

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California, demographics, domestic migrants, entitlement programs, Florida, Forbes, government workers, immigrants, inflation-adjusted growth, innovation, Medicare, Missouri, New York, New York City, Pennsylvania, population, private sector, productivity, retirees, seniors, Social Security, taxes, William Baldwin, {What's Left of) Our Economy

Thanks to Forbes magazine, it’s possible today to teach a useful lesson about the limits of statistics and the studies they’re based on – especially if those studies seem to be intended to prove a point rather than seek the truth.

The post in question, by former Forbes editor William Baldwin, looks like it makes a claim that’s not only important but irrefutable: U.S. states whose numbers of “takers” (government workers plus recipients of government transfer – welfare – and entitlements payments) greatly exceed the “makers” (private sector workers) are in “death spirals.” But states in the opposite situation have promising economic futures. In particular, employers are much likelier to create the private sector jobs crucial to continued healthy growth in the “maker” states.

It’s easy to understand Baldwin’s reasoning. The private sector undeniably is more innovative and productive than the public sector – two of the main ingredients of that healthy growth. And states with big populations of entitlements recipients (e.g., Medicare and Social Security) are almost by definition states with older populations – raising the question of who’s going to pay for all those benefits for non-working or even only semi-retired seniors. Case closed? Not exactly.

Interestingly, doubts start arising as soon as you eyeball the author’s chart. For example, he places California in the “death spiral” category. Since the Golden State represented 13.40 percent of the entire national economy as of 2014, it’s clearly a crucial example. But U.S. government figures also make clear that California enjoyed inflation-adjusted growth last year (2.80 percent) that was considerably faster than the national average (2.20 percent). That doesn’t sound like much of a death spiral to me. And in case you’re wondering whether 2014 was an outlier, California also out-grew the nation as a whole from 2011 to 2014 – by 7.81 percent to 6.26 percent.

Demographics don’t support Baldwin’s portrait of California, either. According to the U.S. Census Bureau (click here for the various relevant spreadsheets), between mid-2010 and mid-2015, the United States population as a whole as a whole grew by 12.661 million. Nearly 58 percent of the increase came from more babies being born than legal residents passing away, and the rest came from net migration from abroad.

California was responsible for nearly 15 percent of this increase – which means that the state punched above its weight demographically. In 2010, its share of the national population was only 12.07 percent. So it looks like there will be plenty of new Californians to pay for public services and retirement costs. And although many of the nearly 835,000 immigrants to come to the state during this period were illegals, many obviously were not.

The situation in another one of Baldwin’s death spiral states – New York – doesn’t look nearly so dire, either, on closer inspection. New York’s after-inflation economic growth between 2011 and 2014 wasn’t as fast as California’s. But at 6.79 percent, it still beat the national average.

New York also lost a little population from 2010 to 2015 (22,308 residents moved away). But births outnumbered deaths by 1.59 to 1, which is a bit better than the national average. And although just over 653,000 New Yorkers moved out of the state during that period, nearly 631,000 immigrants arrived. Of course, many have been illegal and low-wage. But many others have been foreign oligarchs who have rocketed the New York City real estate market into the stratosphere. In fact, the city’s property and income tax receipts for the fiscal year ending June 30 are so immense that its budget surplus is likely to approach $1 billion. So there’s no revenue shortage there.

Now let’s move to one of Baldwin’s more promising states: Florida. The Sunshine State has handily beaten the national average on 2011-2014 growth (7.07 percent) – although its performance has been affected by the depth of its housing-bust-fueled recession. On the surface, its population trends look good, too – as has historically been the case. In 2010, Floridians represented 6.09 percent of all Americans, but over the next give years, the state’s increase came to 11.58 percent of the national total.

Less good, however, were the internals – especially for Baldwin’s “death spiral” thesis. Florida’s population growth has been powered by immigrants and Americans from other states to a roughly equal extent. Surely wealthy foreigners have been well represented in immigrant ranks along with poorly paid illegals. But anyone who knows Florida knows that many of the domestic migrants have been retirees. That can’t bode well for the tax base.

Florida’s neighbor, Georgia, is another odd Baldwin success story. Its 2011-2014 growth trailed the U.S. average (at 5.32 percent). Yet its population growth (4.16 percent of the nation’s total) was greater than its 2010 share of the overall population (3.14 percent). It’s true that Georgia’s subpar population increase may eventually translate into stronger-than-average growth. But should that be considered a solid bet? Stranger still is the author’s positive assessments of Missouri and Pennsylvania, which have been under-performing both in terms of economic and population growth.

Of course, Baldwin has pegged many states right. But misses that are this big, especially for places like New York and California, make clear that the sources of healthy growth and bright economic futures are much more varied than entitlement spending, government workforce sizes, and even generational demographics. Lifestyle clearly plays a major role – what else explains California consistently defying predictions of economic doom triggered by alarm over high taxes, burdensome regulations, and the like? Along with New York and Washington state (another one of Baldwin’s losers, despite the attractions of Seattle), it’s long likely to remain a magnet for talent, as well as wealth (whether ill-gotten or not).

Although I’ve never met Baldwin, I do know that Forbes has long been one of the media world’s strongest champions of Darwinian free market thinking – and of course an equally ardent opponent to Big Government. So it looks reasonable to me that this ideology overwhelmed a more holistic view of economics and business – which his successors at Forbes might have realized just by looking out the windows of their Manhattan offices.