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Yahoo
15-07-2025
- Business
- Yahoo
For the first time in 50 years, the U.S. will likely experience negative net migration, shrinking the U.S. workforce—and economic growth by extension
The U.S. may see more than 500,000 people emigrate from the country as a result of President Donald Trump's aggressive deportation campaign, according to a recent report from the American Enterprise Institute. With foreign-born workers making up a disproportional amount of the American workforce, shrinking immigration could result in a hit to U.S. labor growth and consumer spending. These factors could lead to an up to 0.4% hit to U.S. GDP growth. President Donald Trump's efforts to deport millions of immigrants could likely result in a hit to the U.S. labor force that would shrink the country's gross domestic product, new data shows. A working paper published this month from the American Enterprise Institute (AEI), a conservative economics policy center, found the Trump administration's immigration policy will likely result in a negative net migration in 2025—something the U.S. has not experienced in decades—that would shrink labor participation and 'put significant downward pressure on growth in the labor force and employment.' Net migration in 2025 will likely be between 525,000 individuals leaving the U.S. and 115,000 migrants entering the country, but will likely be negative, according to the report. With fewer immigrants in the country available to work, combined with a decrease in consumer spending—immigrants had $299 billion in spending power in 2023 and paid $167 billion in rent—U.S. GDP growth may shrink by between 0.3% and 0.4%. U.S. real GDP is about $23.5 trillion, which means the economic tradeoff of the deportations is roughly between $70.5 billion to $94 billion in lost economic output annually. The drag on what would usually be 2.8% annual growth would indicate a slowing in economic expansion as employers not only hire fewer people to fill fewer roles, but consumers spend less in an economically uncertain environment. 'Our workforce is disproportionately made up of immigrants relative to their share of the population, and because of that we…really can't sustain a high level of job growth with the U.S.-born population alone, because there just aren't enough bodies, essentially, to do that,' report co-author Tara Watson, a Brookings Institute economist and professor of economics at Williams College, told Fortune. The foreign-born U.S. labor force—which made up 19.2% of the total labor force as of 2024—has shrunk by 735,000 people since January, according to data from the Federal Reserve Bank of St. Louis. But the departure of foreign-born workers in the U.S. now follows an immigration surge during the Biden administration, which helped create a swell of economic growth. The Congressional Budget Office projected the increase in migrants would boost the U.S. nominal GDP by $8.9 trillion between 2024 to 2034. Meanwhile, the U.S.-born workforce is shrinking as many age out and retire. Wendy Edelberg, Watson's co-author and a senior fellow in economic studies at the Brookings Institution, called the projected loss of immigrant workers 'startling' and sees more trouble on the horizon. The U.S. has seen a surge in work permit applications in the first half of 2025, suggesting to Edelberg that many immigrants—out of concern for Trump's immigration policy—rushed to secure employment ahead of a crackdown, contributing to a healthy labor market and a 147,000 boost to payroll enrollment in June. But 'we're not going to ride that wave forever,' Edelberg told Fortune. She and Watson projected a shrinking labor force would result in payment enrollment growth of only 30,000 to 40,000 per month in the second half of the year. This number would be healthy and not indicative of a recession because it will simply indicate a much lower ceiling for labor force growth, Edelberg said. If weak immigration continues into 2027, Edelberg predicted that the jobs figure could turn negative. Immigration has been the cornerstone of the Trump administration's policy agenda, with the president on day one of his second term vowing to crack down on undocumented migrants to the U.S. Trump's Big Beautiful Bill injected $45 billion into the Department of Homeland Security to expand deportation facilities and gives Immigration and Customs Enforcement (ICE) more than $11 billion annually to increase its workforce of deportation officers. The White House called AEI's report on the negative economic impacts of mass deportations 'baseless fear-mongering in defense of illegal immigration,' claiming that 10% of young adults in the U.S. are neither employed, in higher education, or seeking vocational training. 'There is no shortage of American minds and hands to grow our labor force,' White House spokesperson Abigail Jackson told Fortune in a statement. 'President Trump's mass deportation campaign means higher wages and more opportunity for American workers.' Unlike Trump's first term, in which he oversaw a more modest curtailing of immigration, the president has ramped up deportations after a sluggish start to his second administration, with Watson and Edelberg projecting the removal of about 300,000 immigrants in 2025 alone. Beyond the nearly 67,000 immigrants the Trump administration has detained in fiscal 2025 and more than 71,000 deported, according to ICE data, others have self-deported or left voluntarily out of growing concern over hostile policies as part of the out-migration, according to AEI's study. Watson warned net migration could be even lower in 2026, as the administration likely refuses to renew temporary work visas and foreign-born students snub American universities in favor of higher education opportunities elsewhere. 'The environment is going to make people like students reluctant to come study here,' Watson said. 'Temporary workers may be questioning whether this is the right place for them to come to work.' Businesses are seeing the early consequences of weakened immigration, with farm workers refusing to show up to work out of fear of ICE raids, Bloomberg reported. Nursing homes are similarly struggling to attract a workforce as the Trump administration revokes some immigrants' legal status and slows the immigration process for documented migrants. 'We feel completely beat up right now,' Deke Cateau, CEO of Atlanta-based nursing home operator A.G. Rhodes, which has one-third of its staff made up of immigrants, told the Associated Press. 'The pipeline is getting smaller and smaller.' Beyond concern about a shrinking GDP, Apollo chief economist Torsten Sløk warned that if the U.S. were to deport 3,000 undocumented immigrants per day for a year, the country's labor force would drop by 1 million people. Workplaces with high rates of immigrant employment could subsequently see an increase in wages as they struggle to attract workers. 'Lowering the labor force by 1 million will reduce the participation rate by 0.4 percentage points, which will lower the unemployment rate, lower job growth, and increase wage inflation, particularly in the sectors where unauthorized immigrants work—namely construction, agriculture, and leisure and hospitality,' Sløk said in a Saturday blog post. 'In short, deportations are a stagflationary impulse to the economy, resulting in lower employment growth and higher wage inflation,' he continued. While some parts of the U.S. could experience stagflationary environments, stagflation could be tempered in areas with large immigrant populations as their spending power wanes and demand for industries like housing construction decreases, Edelberg said. Watson posited that besides GDP, shrinking immigration will most heavily be felt in Social Security. Undocumented immigrants paid $25.7 billion in Social Security taxes in 2022, according to a 2024 analysis by the left-leaning Institute on Taxation and Economic Policy. 'There's a very tight correlation between how many people are coming into the country and the degree to which we can sustain Social Security at its current levels going forward,' she said. More broadly, the economic ramifications of Trump's mass deportation campaign are only one part of the policy's impact, Edelberg said, the other half being the palpable changes in the feeling within American cities spurred by ICE raids and the mobilization of the National Guard to accelerate deportations. 'The broad macroeconomic events are going to be pretty modest,' she said. 'In terms of how we're affected by this immigration policy, I think they will be dwarfed by how we engage with this policy, just in the images and in our communities.' This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Print
05-07-2025
- Business
- The Print
There is a global teacher shortage. How fintech can help tackle it
A global teacher shortage is looming, which would affect students for years to come. Teaching shortages could lead to larger class sizes and increased teacher burnout, ultimately placing a long-term strain on education systems worldwide. Technology could help teachers live a better financial life and stay longer on the job, while also supporting their financial wellbeing. Demand for teachers is expected to rise in the coming years but many educators are leaving the industry due to stress – both in the classroom and in relation to their finances. This could increase class sizes and amplify teacher burnout, not to mention adding to recruitment and training costs for schools. A recent UNESCO projects report found that 44 million additional teachers are needed worldwide to achieve universal primary and secondary education by 2030. The report highlights a demand for 70% of these additional teachers at the secondary level and a need to replace over half of the existing teachers leaving the profession. The World Economic Forum's Future of Jobs Report 2025 notes that teachers will be among the occupations expected to experience high growth in the years to come. But teachers are leaving the profession for a myriad of reasons, including high stress levels, burnout, lack of support, heavy workloads and challenging working conditions. Financial strain is also often cited as one of the top reasons teachers leave the field. Teaching is stressful enough but struggling to make ends meet at the same time can be too much for some to handle. An exodus of teachers would have wider effects. One of the most pressing issues relating to a teacher shortage is 'recruiting, preparing and retaining sufficient numbers of qualified teachers,' according to the Brookings Institute. Hiring and training teachers is no easy task. Larger school districts in the US, for example, spend nearly $25,000 on average to replace a departing teacher. No wonder then that 86% of US public schools are struggling to hire educators. Helping teachers, schools and pupils survive and thrive during these challenging economic times requires the right tools. Advances in financial technology (fintech) can play a role in helping to curb an exodus from the teaching profession. Fintech and financial literacy Empowering teachers by improving their financial literacy and education can also help them in the classroom, both by relieving money worries and providing them with financial knowledge to pass on to students. Advances in fintech can provide teachers with relevant, useful and actionable information at the click of a button on mobile devices. Accessible and relevant financial education is a great start for teachers, but having the ability to apply that information in the workplace is also critical in paving a path to financial wellness and stability. Fintech solutions that support teachers' financial journeys such as personal finance and budgeting apps, investment and savings apps and digital retirement planning tools, can all help teachers make their money work harder and smarter. The percentage of people who say budgeting has 'helped them get out or stay out of debt' has increased from 73% in 2018 to 89% in 2024. In the UK, over 18 million people used budgeting apps in 2024, while another report indicates that 40% of Germans also use digital budgeting apps. Investment apps are widely regarded as having democratised investing, making it more accessible to a broader range of individuals. Mobile brokerage apps often offer resources to help users learn about the basics of investing, develop a good financial strategy and other crucial concepts. On-demand pay and the teacher shortage Our research with The Harris Poll found that 70% of teachers say it would be helpful to be paid more frequently than twice per month. And so on-demand pay is another fintech solution that could help teachers live a better financial life and stay longer on the job while also supporting their financial wellbeing. This voluntary employee benefit can help teachers pay bills on time as it addresses the problem of the timing of their paychecks and their bills being misaligned. These tools can provide real-time visibility of daily earnings, empowering teachers with the knowledge to make the best decisions for themselves and their families. Timeliness and transparency are critical to making ends meet and staying out of debt – an unexpected expense in the middle of a teachers' pay period could send their financial situation into turmoil. Employers could offer such fintech solutions as part of a financial wellness benefit package. 'Education is the most powerful weapon which you can use to change the world', according to Nelson Mandela. Teachers play such a pivotal role in the advancement of society. And while fintech cannot address every challenge they face, it can help to ease their money worries and help them focus on what matters most – teaching. This article is republished from the World Economic Forum under a Creative Commons licence. Read the original article.
Mail & Guardian
04-07-2025
- Politics
- Mail & Guardian
It is China that has won the ‘Cold War' in the Middle East
China plans to lead the world through building state, economic and diplomatic capabilities and not through war. (Yuan Hongyan / ImagineChina / Imaginechina via AFP) The latest illegal bombing of Iran by the United States could mean many things for the world if seen through the lens of the ongoing struggle to rebalance global power relations. Obviously in the bigger scheme of things, the US cares as little about Iran than it does about China, which has, in many ways, surpassed America in terms of global power and influence. If the US thought it could lure China, or even Russia into a regional or global war, then it has failed to do so, and will continue to fail. China has no interest in waging a war; it is busy building state, economic and diplomatic capabilities to lead the world. In this sense, China has won the 'Cold War' in Iran/Middle East. The Osiraq option In an analysis paper titled Which Path to Persia? — incidentally, it's dated June 2009 — the Saban Centre of the Brookings Institute lays down the foreign policy options for the Obama administration on how to address the Iran 'problem' which is considered a 'national security' priority. The paper advises the US administration to settle for the Osiraq option, which refers to the surprise airstrike by the It proposes that the Osiraq option is the best option because the US 'might be able to provide a reasonable justification for such a campaign by building on the fact that the UN Security Council has repeatedly proscribed Iran's nuclear enrichment activities in resolutions enacted under Chapter VII of the UN Charter, which are binding on all member states'. The Osiraq option was chosen because it was less risky in terms of the strategic interest calculus of the US in that region. It also knew that boots on the ground would mean Iraq and Afghanistan 0.2, and the appetite for another prolonged war is very low on the US domestic front. Even Israel could not go the conventional warfare route with boots on the ground; because a full-on invasion by Israel would inevitably force the US to join the war and the situation would be untenable; Iran has capabilities far greater than Iraq. The paper suggests, quite strangely, that unlike a ground invasion, the Osiraq style is not a 'regime change' kind of strategy. A rhetorically erratic Donald Trump had a different idea though. Days after he violated Iran's sovereignty, he posted on his site Truth Social: 'It is not politically correct to use the term, 'Regime Change' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!' War is the pursuit of politics by other means, namely, violence. Often, 'winning' a war is as pyrrhic for the victor as it is for the conquered. Anyway, the very idea of winning a war is debatable. Others suggest, quite correctly I would say, that there is no winner in war. The strategic intent of countries like the US is not to win the war. It is to weaken the so-called enemies, divide a people and plunder their resources — often through regime change disguised as the protection of''national interests'. The idea is that if you cannot secure your interests through normal means, you must either buy or bomb your way in. Whatever it is, there is always an organising set of interests that inform the pursuit of war. The recent so-called peace treaty between the Democratic Republic of the Congo and Rwanda signed in the Oval Office — not on African soil — is a perfect example of the US's global imperialist agenda. By the way, Trump has never set foot in Africa. We also know that the bombing of Iran has obliterated any little respect that was left in the United Nations as a multilateral system aimed at preserving peace and preventing future wars. The bombing was carried out without a UN resolution or US congress authorisation, thus making it a unilateral rogue decision by the US government. It violated Iran's sovereignty and international law in a context where the International Atomic Energy Agency (IAEA) confirmed, repeatedly, that Iran is not building nuclear warheads, in the same way that it found no evidence of 'Weapons of Mass Destruction' in Iraq at the turn of the century. Geopolitical 'game of thrones'? The single most important headache for the US today is the re-emergence of China as a strategic power pole in a multipolar world. In both his campaigns for the presidency, Trump made it clear that China is the US's 'main competitor', and one of his former national security advisers, Robert O'Brien, put it better when he said, 'China is the threat of the century.' Trump believes this hook, line and sinker. As I suggested in a recent article, The US, the 'Great Transformation' and the New World Order, the changing balance of global power is characterised by the decline of the US as a superpower, and the rise of China as a significant hegemon while a multipolar world order is in the offing. Much of the disastrous domestic and foreign policy coming out of the White House today is an attempt at dealing with this unstoppable great transformation. The US elite does not have a coherent strategic response yet. The elites in both countries are aware that the decline-rise situation between the two countries gives rise to the Thucydides Trap moment. China knows that it is ahead, while the US knows that it has fallen behind on so many indicators of power. But the US is hellbent on kneeling before the shrine of neocon conceptions of power, so much that it is inflicting a lot of self-harm against the 'national interest'. For its own sake, the US will do well to heed the advice of one of the most hardened conservative Republicans, the late Henry Kissinger, who wrote in his book On China that if not handled properly, US-China relations could mirror the Britain-Germany relations pre-World War II with disastrous consequences for both countries — and obviously, the world as a whole. Kissinger counsels that both countries should seek mutually beneficial relations. It is now evident to everyone that the US has already lost the war on global hegemony and consequently, ceased to be a global hegemon or, at worst, a hyperpower that bullies and dictates to everyone in the world. The latest attempt at stirring a trade war, essentially against China, is a case in point. China remains unshaken. China is playing the long 'game of thrones'. Whether it is the Southeast China seas, Taiwan or Iran tensions, it simply refuses to transform the ongoing tensions into war. It has understood the injunction of Sun Tzu that it is better to win the war without fighting it. The US believes it, too, is playing a long game — the political rhetoric of Trump notwithstanding. In fact, it is Trump and his advisers that defines China as a strategic threat or competitor. Which way for Africa and the Global South? Africa and the Global South must respond strategically in the interests of the vast majority of the people of the world who stand to lose if a major war were to break out. The foreign policy of the US is largely the same in the Middle East and Africa. Without a clear strategic orientation, smaller countries will find it difficult to navigate the current tides caused by the rebalancing of power in the global arena. Some analysis suggests that small countries have no agency, power or even a cost-benefit analysis to make in these high stakes struggles for the rebalancing of global power relations. I think such analysis is grossly mistaken if one considers the role of small countries in World War II or the choice of non-alignment during the Cold War years. There is a lot to lose and gain in a multipolar world for countries in the Global South. The requirement is that they must be strategic, intentional and consolidate on national and regional unity and integration. There are more opportunities in a multipolar setting than a unipolar or bipolar one. The Global South must position itself well to benefit from this world which is struggling to be born. David Maimela is a researcher and writer in public policy with a specialisation on foreign policy and international relations based at Unisa. He writes in his personal capacity.
ABC News
13-06-2025
- Business
- ABC News
Could Australia actually be better off under Trump's tariffs?
This week David Speers sits down with U.S. based economist, Senior Fellow at the Brookings Institute and professor at the University of Michigan Justin Wolfers to ask the question: are Trump's tariffs working?
Daily Maverick
03-06-2025
- Business
- Daily Maverick
After the Bell: Who's afraid of losing Agoa?
One of the great risks of the debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. One of the most boring discussions I've heard around our economy over the past five years has been posed as 'will we keep Agoa?' I hear it everywhere, even now, when US President Donald Trump has made it clear that he wants to tear up the entire trade rule book. I can understand why we keep hearing about it. There are certain sections of our economy that really benefit from it. Because of Agoa (the African Growth and Opportunity Act), they have been able to grow and employ people. And some of the arguments they can make about why Agoa matters to us are important. Free market access to the US is great for the car industry, and for our farmers. It means they are exporting goods produced here, earning dollars in return and basically importing jobs. People are employed, their kids are kept in good schools. You could argue that the entire community around Daily Maverick journalist Estelle Ellis and the rest of the Baywatch team will be badly hit if it all comes to an end. And that would be true. Farmers, too, had a bumper season exporting to the US in the first quarter of the year. They were able to increase the amount of goods they sent there dramatically in that quarter. When I first heard that, I thought, perhaps, like the Chinese (and I'm sure others), they had been rushing goods into US ports before new tariffs could come into effect. But that amazing agricultural economics guru Wandile Sihlobo told me on The Money Show on Monday night that this is not the case. It happened because our farmers have created a strong demand for their goods. And, like our car industry, we are basically importing jobs. But we should be aware that, despite these very loud and important voices in our national debate, this is not the end of the story. The Brookings Institute estimated nearly 18 months ago that 'In total, a loss of Agoa benefits would lead to a GDP decline of just 0.06%'. To put that into context, our GDP grew by just 0.1% in the first quarter of this year. At the same time, the South African Reserve Bank has generally said that load shedding was costing our GDP 2% every year. So it may matter, but only in the context of our complete inability to take action to grow our own economy. One of the great risks of this debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. In fact, a few weeks ago I was almost taken aback when an American investor (one of those wonderful people who travels the world, and is hugely interested and fascinated by it) asked me point-blank: 'Why do you all care so much about Agoa?' He even suggested that actually it went against our interests. This is because of some of the small print. If you look at the text of the Act that passed through the US Congress, the conditions of eligibility are designed to literally create African economies in the US mould. Of course, as we were so often reminded during the Lady R saga, it says that you must 'not engage in activities that undermine United States national security or foreign policy interests'. This is a wonderful stick for the US to beat us with. If it wants, it could define our opposition to Israel's genocidal war on the people of Gaza as 'undermining' US 'foreign policy interests'. To be clear, there is much in Agoa that is good. It mentions that workers must be protected, that there should be political freedom and things like that. But it is still a tool of foreign policy. Yes, Agoa is helping African countries to develop. But it is also a useful instrument of control. Agoa looks finished anyway. In reality, the US system of government appears to be giving Trump whatever he wants. So far, very few Republicans have spoken against his tariff policies. But the markets are speaking. And the fact that the bond markets have forced Trump to basically chicken out has given us the wonderful phrase Taco (Trump always chickens out). So, I do think we need to be less afraid of him. He is slowly being revealed as all bark and very little bite. What we really need to do is to find Americans who lose out if we cannot export to the US. The US citrus industry, for example, needs our oranges to keep the market interested in oranges during their non-growing season. And we should not forget those strange people who drive BMW X3s. The models sold in the US are only made here. And even if they are rubbish cars (who can forget Jeremy Clarkson having to throw the sound guy out of the car to go and push, even now it's still worth watching), there is still a lobby for them in the US. I think we need to stop worrying so much about Agoa.
