The rate of growth of the population in the US has been sinking sin e 2015.
Growth comes from two sources:
- Having more births than deaths (4 states had more deaths than births in 2019 — West Virginia, Maine, New Hampshire and Vermont)
Overall growth this year was 0.48%. In total numbers, it was under 1,000,000 people for the first time in four decades.
Why does this matter?
Basically, fewer people means less demand for products, from housing and furniture to cars and appliances. Instead of building products for new buyers, manufacturers are selling to the replacement market — and products just don’t break that often. That means much smaller manufacturing runs and more layoffs.
Stock prices are based on current revenue and expected revenue growth. Where does revenue growth come from? Basically, there are only two options:
- Sell to more people or
- Raise prices.
If we cap the number of buyers and limit demand for product, then neither option is possible. So manufacturers can’t increase profits through domestic revenue growth.
They can increase the number of buyers by selling outside the US. However, several major markets (China, India, Brazil) require companies to partner with firms in those countries to sell there, and there are incentives to manufacture in those countries if you sell there. That’s job creation elsewhere, not in the US.
Another way for domestic (US) companies to increase profits is to reduce costs and send more jobs offshore. However, trade uncertainty can make that problematic. Where can you outsource manufacturing when you don’t know when and where tariffs might be imposed?
What we have is a recipe for a stagnant US economy. We may not be there now, but that seems to be where we’re headed.
Emigration is adding to the growth problem. The US government doesn’t report the number of Americans who leave the US to live overseas on a permanent basis. In 2016, the State Department estimated that 9,000,000 Americans lived outside the US. This number may be quite low and may have growth substantially in the last three years.
Have you considered looking outside the US for work? According to a Gallup survey from earlier in 2019, 40% of women under age 30 would like to leave the US.(3)
Of course, actions against immigrants are only adding to the growth problem. According to the Census, immigrants contributed 595,000 to US population growth between 2018 and 2019, just about half the number that we saw in 2016.
What are the factors affecting immigration?
- Obviously, the efforts to reduce immigration across the Southern Border. However, Mexican immigration to the US was a net of 0 in 2012. According to a recent Pew Foundation report, 75% of Mexicans have a negative view of the US.
- However, there is less interest in coming to the US than in the past.
- There were 644,233 student visas issued for study at US colleges and universities in 2015. That number has fallen to 362,929 in 2018 and is continuing to decline. This is placing a major financial strain especially on smaller private colleges in the US.
- There has also been a dramatic decrease since 2015 in US visas issues for business and vacation travel here. In 2015, the US issued 7.2 million visas for short term visits to the US, and this number dropped to 5.7 million in 2018. That’s also less money for US workers.
- The perception of the US as a violent society is among the issues throttling interest in persons from other countries in coming to the US.
There are models of what’s happening in the US, most notably Japan. Japan went into a population decline, which meant the need to import workers to keep factories operating in Japan. Northern New England in in that situation now, reflected in a program that Vermont introduced to pay bounties to anyone willing to buy a home in the state and the minimum wage law put into effect in Maine. However, lack of population growth caused a two-decade stagnation in the Japanese economy. That may be the future of the US.
Do people who take anti-immigrant positions understand the financial impact on themselves?