Principal, Strategy and Product Integration, McChrystal Group
Founding President and CEO, JPMorgan Chase Institute
Spencer Fellow, Columbia School of Journalism, Columbia University
Senior Vice President, Director of Studies, and Maurice R. Greenberg Chair, Council on Foreign Relations
Chike Aguh, principal of strategy and product integration at McChrystal Group; Diana Farrell, founding president and chief executive officer of JPMorgan Chase Institute; and Alexandra Fuenmayor Starr, Spencer fellow at Columbia Journalism School, discuss U.S. economic competitiveness. James M. Lindsay, senior vice president, director of studies, and Maurice R. Greenberg chair at the Council on Foreign Relations, moderates.
LINDSAY: Good morning everyone. I am Jim Lindsay, director of studies here at the Council on Foreign Relations. And let me welcome you here to our workshop. I’m glad everybody was able to make it here, despite the impending weather and TSA delays and other things that can impede travel.
I want to remind everybody this is an on-the-record session in which we are going to discuss U.S. Economic Competitiveness: Trade, Immigration, and Workforce Development.
It is my pleasure to get to moderate this morning’s session and to introduce our speakers today. I believe you have everyone’s bios, so I’m not going to list all of their accomplishments. I’m going to do brief introductions if that is OK, and I’m going to sort of go geographically in a progression from here all the way to the end.
So let me first, to my immediate right—at least geographically, I’m not going to say ideologically—(laughter)—is Alexandra Starr. She is the Spencer fellow at the Columbia School of Journalism. Alexandra has reported on immigration, poverty, and education for more than two decades.
In the center seat is Diana Farrell. Diana is the founding president and chief executive officer of the JPMorgan Chase Institute. Previously, she was the head of McKinsey Center for Government and the McKinsey Global Institute. And I need to point out that Diana was a member of the CFR Task Force on the Future of Work, which will become relevant today.
I’ll just hold up a copy of the task force report, which is called The Work Ahead: Machines, Skills, and U.S. Leadership in the 21st Century. You can get a copy of that on CFR’s award-winning website www.CFR.org. I’m required in all of my public presentations to mention www.CFR.org three times. I’ve done it twice—(laughter)—I owe you one more.
Finally, at the far right—again, geographically, not necessarily ideologically—in today’s panel is Chike Aguh, who’s the principal of strategy and product integration at the McChrystal Group. He most recently served as chief executive officer of Everyone On. And again, he was also a member of the CFR Task Force on the Future of Work.
Diana, if I can, I want to start with you and I want to do a little scene-setting, because, again, the title of today’s session is U.S. Economic Competitiveness. And I think it’s important, before we start talking about recommendations and how to fix things, that we agree on sort of what the current state of play is. So let me just ask you this question: How competitive is the United States economy overall? Which industries would you describe as being on the cutting edge, being very competitive? Which are the industries that have fallen behind that perhaps shouldn’t have?
FARRELL: Great. Well, I would say that, you know, the death of the U.S. economy has been foretold too many times. It’s a very strong economy. It has a foundation of very strong workforce, innovative spirit, and that is exemplified by economic measurements, like productivity, which, even though we have not seen the kind of productivity increases in the last while that would have characterized the ’80s and the ’90s, when we compare—and the McKinsey Global Institute has done a lot of work in this regard—productivity levels across countries industry by industry, the U.S. is almost always on the front. Not always. Steel, for example, would be one where the U.S. is not.
And so I would also say that this is not the first time where angst in our economy has led people to think that the U.S. model is over. And some of you are too young to remember the just-in-time economy threats when Japan was going to take over the world because it had this economy that was just-in-time inventory management and we were never going to be able to compete against it. And that turned out to be absolutely true for some sectors, like steel and auto where we made a comeback, but it was not generally true.
And I would say that today, the fears around China have a similar ring to them in that there’s this fear that China with its size and its economic model is going to take over. And not to say that could never happen, but I think that we’ve been in this angst before.
The bigger question is not where we are today, because I think we are very strong today despite areas where we are allowing our infrastructure to erode and we’re allowing our strengths to erode, is how likely it is that we will maintain this edge. And when you think about why the U.S. has really been on the forefront of competitiveness since the Second World War, it’s been a large combination of things that we are not paying attention to. One is our education system. And we’ll talk a little bit about that I’m sure because we want to get back to workforce development.
The second is our infrastructure. And, you know, you remember the days when our highways were the wonder of the world, our buildings were the wonder of the world, and today we cannot get private or public investment to upgrade kind of the basic foundation of it.
Three is kind of a belief in resilience. And part of the wars that we have on the safety net is, if you think people are going to access the safety net temporarily while they’re down, you’re quite comfortable with providing it. If you think it just creates a class that will permanently and forever rely on that, people get very nervous about that. But without that safety net, people are less likely to take risks and are less likely to go out. We’ve lost our ability to have, I think, civil and educated conversations about that.
And then I would say, you know, a little bit in the—in the FDR camp, we are fearing fear itself. There is a level—you know, we have incredibly low unemployment rates, we have signs of very good things happening in our economy, and yet fear has set in and angst has set in and people are focusing often on indicators and only the indicators that suggest an issue.
If we were to change that, we would want to start having a real policy debate around the things I mentioned. But the next frontier is really going to be around some of the things I’m sure we’ll talk about, which is the technological breakthroughs that are happening right now in unison that are fundamentally changing how we think about work and how we think about the production of goods and services. And, you know, we can come back to that because I don’t want to take up all the time now. But, you know, while it’s true that we always had some version of automation going on and robots, while it’s true that we always had some version of the analytic issues that have now gained prominence in the form of machine learning and AI, what’s happening now is we’re at the rate and speed of change and bundling of these technologies where we’re going to see some very fundamental changes in many industries. And here, we are at risk because we are not investing, the public and the private sector. The private sector is investing only in commercial activities associated with this—typically, video games and consumer products—and the public is not paying attention.
The Department of Defense, despite the last administration’s efforts to start pushing our investments into AI and cyber and otherwise, is really still buying, you know, battlefield ships and stuff that is not where the next war is going to be fought. And those have always been the sources of innovation, the public investments and the private investments.
So I think we are very strong. And I do want to underscore that. I think the fears about the U.S. being in decay are wrong, but I think we need to get our act together on education, on infrastructure, on a discussion about the social safety net, and how we enable people to be their best and solve problems as opposed to, you know, just have verbal wars and put our policymakers to work to solve real issues to maintain the edge that I think we can gain back.
LINDSAY: Chike, can I draw you out on this? I mean, Diana has painted what I would consider to be a fairly optimistic picture of where we are right now with lots of clouds down the road. Do you have the same take?
AGUH: Probably the same take; I think my timescale may be a little different. I think, to use the analogy, if you are driving your car and you’re looking in the rearview and it says “objects may be closer than they appear”—(laughter)—I think that’s kind of how I think about this in terms of where we are relative to competitors.
I’d make just a few points on this. Diana talked about technology, so let me just use a very, very specific example. If you think about autonomous vehicles and you—and as part of the task force report, we kind of asked, hey, when are—when are these going to be on the road en masse? You’ve got predictions between 2030, 2045. And if you think about the huge advances in our economy in terms of logistics, transportation, efficiencies, things like that, it’s going to be a huge boon in aggregate for the economy.
I also want to say, driving a vehicle, I believe, if I look at the data, is the most commonly held profession by an American man. There are more people—almost as many people who drive vehicles for a living as there are teachers. So this is a thing that is—again, within my lifetime, within my child’s lifetime—will be a thing we have to deal with. It doesn’t mean necessarily that all those people are out of work, but the question is, what are the choices that we make today that are going to—that are going to allow us to make the most of that and not be buffeted by that. So I think that’s number one.
Number two, let me juxtapose two trends. If you look at the, you know, the headlines of the robots are coming for our jobs, yes, but they’re not coming for everyone’s job equally. If you look at the jobs that are most vulnerable, ones that are rote with less digital skills versus ones that are—that require critical thinking, adaptation, and technological skills, they’re not all held by the same people equally. The most vulnerable populations in our society generally, if you look at just, for example, 25 percent of African Americans hold jobs that are rote and have low skill disproportionately as compared to the rest of the population; therefore, when you think about these growing parts of our demographics—frankly, African Americans, Latinos, immigrant populations—they are in the fields most likely to be disrupted. That has economic consequences because they’re going to be a larger part of our workforce.
But secondly, which comes to the third point, there are political consequences. Right now, we’re in a place where probably the last century we’ve had a consensus that a growing economy and capitalism is good for everyone. And what we’ve come to is a place where, in aggregate, the data tells us it’s good for America, but not every American feels it’s good for them. And that is a—and that is—and it seems like a political question. But when you think about why CFR dealt with this issue and you read why Richard Haas said we should have this task force, he said I am worried that the lack of faith in our system will cause political consequences that will erode our ability to do the things we need to do domestically and globally.
So when I think about the trends that we have, these are all trends that I think are in the future. I definitely agree, if you look at the data, we’re in a strong place. But all the trends that I described, and there are others, are closer than they appear. And so when I think about the local context—and I started here in New York City working for a mayor—we have to think about them and think about them now; or otherwise, frankly, when the time comes, we may not be in time.
LINDSAY: Chike, can I just draw you out a little bit on the impact of digitization, automation—
LINDSAY: —on the workforce? Is it the case that the burden or the impact is going to fall most heavily on people who have low skill, low education? Or is it the case that developments in digitization and also in artificial intelligence will disrupt industries where people traditionally have had a high skill base, high education in order to succeed?
AGUH: And this is a place where I defer to the people who are smarter than me. What I’ll say is this. It’s a question of order. So the question is, since the ’70s, this has been happening and people have low skills.
FARRELL: But let me put a fine tone on it because I know one of the things that you’re all trying to do is gain new sources to understand some of these issues. There are many folks who have been doing really good work on answering that question. You know, how broad can this impact be? How do we think about this?
I think one of the most thoughtful studies was done by Frey and Osborne at the OECD. And they basically break down activity by activity to say, you know, given the jobs of today—and you have to keep in mind that we will have jobs, you know, in five years that we don’t know today, we don’t see today—how many are at risk, at very high risk, how many are medium risk? And, you know, these are difficult assessments to make, but I actually think they do a pretty thoughtful job.
And they come out with, you know, nearly 50 percent of jobs will face—I think the nature of it is that it won’t necessarily be a job as it exists today that gets displaced by a robot doing the exact same thing. It’s that the job changes dramatically because of these technologies, and so they get bundled and rebundled in different ways.
And if you think about even your jobs as journalists, you know, there was a time when journalists were typesetters, like, literally typesetters, and they were also spent lots of time researching at libraries and they did—and now, all that has been transformed into Google searches and electronic whatever. And that is a more thoughtful way to think about, what range of activities are going to be affected? And in that sense, I don’t think it’s low skill at all. I think the whole world is seeing that.
And we see, you know, one of the things that I find so interesting—voice recognition is one of the big frontiers now. And when it started off, the best application of it were, like, the McDonald’s when people drove up and ordered and, you know, it was, like, the car and the baby screaming in the back. And the error rates on the recognition of that were really high, like, you know, 50, 60 percent. And so it became a task—this was done at IBM—to, how do we reduce the error rate? It turns out human hearing has a 7 percent error rate. This is, like, the estimates that I’ve read. The most recent, like, developments in voice recognition are below 7 percent now. So just as an application of many, many things that will interfere with many, many jobs. And, you know, radiology, people looking at X-rays, looking at—so I do think this is more profound.
I also probably—this is a legitimate question which I think you all have to spend more time thinking about: How fast is this going to happen? I can make a claim, as you did, that the rearview mirror, things look closer than they are, are further than they do, and I could make the case that this is going to take a lot longer than people think. I mean, technologies don’t get adopted as quickly as we heard. Many of the things that today are disrupting have been around for ten years, it just took a long time to grind through. And, you know, that’s going to be a hard thing to answer exactly how quickly these things will happen.
LINDSAY: Alexandra, I want to bring you into the conversation here. Chike teed it up. He mentioned the importance of immigration and how certainly immigrants will be affected by digitization, automation, changes in the workforce. Now, immigration is a much bigger issue than economic competitiveness. But I want to sort of look at least at the economic competitiveness aspect of it. How should we think about immigration in terms of the changes that Diana and Chike have laid out, particularly given that many immigrants who come into the country are low skilled, low education, and then there’s the issue of their children. But we also have immigrants who come into the country who are very high skilled. So how should we think about it?
STARR: Right. It’s a good question and that’s sort of a question of our times, right, in the sense of the space it’s occupying politically today.
So I cover immigration mostly from a perspective of New York. And I was really excited when I read your bios. This seems to be an issue a lot of you are covering in newsrooms across the country, which is so exciting.
And I think Cindy Carcamo is here. I’m a big admirer—yeah. You’ve done great stuff from L.A.
So how should we look at it? And what kind of resources are available to you guys? That’s something that I know you’re here today for. The Migration Policy Institute does fantastic stuff honestly, like, as you said, sort of breaking it into subgroups and talking about the economic impact that these different populations can have.
I think also, you know, something that has gone kind of unreported to a certain extent is that the Trump administration has really cut down on skilled migration to the United States. There’s been so much focus on the crisis of, you know, these kids being separated from their parents, but in a broader perspective, you know, they have a—their entire approach, you know, kind of goes from the most skilled to the least skilled.
Something else I would say is I don’t think, particularly these days, there has been enough attention on the children of those low-skilled immigrants. So I in my reporting oftentimes will meet oftentimes mothers from Central America who, say, came here twelve years ago and then their sons joined them in 2014, joined that big initial influx across the border. What’s intriguing is that in New York City, a lot of those kids ended up getting visas just because of the dynamics of New York, there’s such a powerful pro bono community here. But, you know, nationally, that’s not really the case.
And there’s this great professor at Harvard by the name of Roberto Gonzales who has studied this so-called 1.5 generation, these kids who come of age in the United States and more or less feel like they’re part of American society until they graduate from high school. And he says there are about 2.1 million of them across the country. You know, I think we need to make sure to tell their stories as well.
You know, I think at this point, their experience is not really getting the attention that it deserves and it does have an impact on the kind of contributions they’re going to be able to make in this rapidly changing economy.
LINDSAY: OK. So we have—we have laid out a diagnosis. And there seems to be some disagreement as to whether the challenges we’re going to hit, the wall we’re going to hit is going to be very soon or a little bit after very soon. But we seem to all agree that we have big challenges in terms of remaining competitive. So let’s talk about prescription, what do you do about it? And again, I was struck in listening to the conversation, we have challenges in education, we have challenges with infrastructure, we have challenges in the way we design our immigration policy, also on top of it the issue of political dysfunction. I think it’s obvious to everybody around the room in terms of the difficulty of Washington to get things done.
So if you could get a hold of policymakers, what would you want them to do? And I guess we shouldn’t be thinking simply on what should be done at the federal level, because I would imagine a number of these issues are actually state or local issues.
Maybe I could start with you, Diana. What would be your—
FARRELL: Well, I have to—I think I saw Anya Schmemann back here. Did I? Yes. I have to start by saying that a more complete and thoughtful answer to that question is in that book that you were holding up.
LINDSAY: Which is available at www.CFR.org. (Laughter.)
STARR: Number three!
FARRELL: Which I don’t want to—I don’t want to go on too long. But that, I think, with Anya and Ted’s help and, you know, herding a very, very good group of folks, I think is a very thorough answer to that question of at the federal, at the state, at the local, at the employer level, what are the things that can be done? So to the extent that you want a more complete list, I really suggest you turn to that. I think that’s a very good writeup of a lot of our very good conversations.
But I would start because I think we must start with the strength of the people and the education challenge. I think when people say things like, you know, we’ve been here before, look at the migration from agriculture to industry and, hey, America did just fine, we forget just how traumatic that period was for America and, you know, read Steinbeck to remember, like, what upheaval that took. And the repair to that was, in effect, a massive social movement to provide universal education, which started with K through sixth and then moved on to what we now have as K through twelve. But those were hard-won battles that took enormous amount of courage from a lot of people and a lot of great journalists writing about the importance of this and all that.
And I think we’re facing a similar moment today as it comes to rethinking our education system. And I am not a fan of let’s just provide college to everyone because I think that colleges today, as they are structured, are not going to do the job because they’re too expensive and they’re not necessarily equipping everybody to play the role that they likely want to play in society. So there will be a role for the universities as they exist today. There will be a very important role, I think, for a lot of the community colleges, but this whole rethinking of credentialing as not I’m going to go study to be X or I’m going to study to be Y, but I’m going to create a set of skills and tools and credentials that allow me to rebundle my activities into different kinds of jobs I think is the way to think about it, because we do need people to be adaptable as these jobs shift and change and are affected by technology.
We have got to absorb a continuous-learning idea. We still have the view that, oh, he finished his education, she’s done with school. And we can never be done with school. I mean, I’ll tell you, in my own shop, I run a data analytics research group for the public good. We’re using the bank’s data to develop data assets to inform what’s happening in the economy. And our folks are hired right out of Ph.D. programs and I just sent them for an entire week of training on the new computer science languages because otherwise they’re behind. They just graduated two years ago. That is the world of this next generation. And so how we build the social movement to address that would be on the top of my list.
I’ll just keep going one more. And I could keep going forever, but I won’t. On the infrastructure, we just passed a tax bill, a $1 ½ trillion hole in our deficit with not a single attention to public investment, roads, telecommunications access, internet access, you name it. And you just think to yourself, we don’t have that much more room. We have, you know—we’ve been running deficits for a very long time, we have a very, very large hole in our debt. And where we need—to the extent that we’re going to spend money, we need to spend it on investments that pay into the future. And so that conversation, which was starting to get some traction in the last Congress or two Congresses ago, just lost steam altogether.
So I would put a lot of emphasis as those two as the ones that will yield the most return. The first one will take longer to yield return, the second one I think we need to do immediately.
LINDSAY: But it is a great concern if you don’t have money around to invest in these recommendations you want to make or these changes you want to make.
Chike, what would you sort of point to as critical things that government at whatever level should be doing to maintain U.S. competitiveness?
AGUH: Two quick questions just kind of places this at this stage. One, definitely that report is a much longer and specific answer to this question, so definitely read it. It’s also online.
Secondly, the point that Diana made about universal public education is really important, not just the fact that we did it, but the fact that it was a solution equal to the size of the problem. And I would argue, in terms of our debate right now, we are now proposing solutions equal to the size of the problem.
So when I hear about programs here, programs there that don’t feel big and hard, I don’t think we’re solving it. As you think about this and people say they’re tackling this challenge, how equal to the size of the challenge is what they’re proposing?
I’d say I think most of these solutions fall into four buckets. The first is, how do we make sure the worker of the future is prepared for that work? That’s really education, skilling, things like that. But it’s important that we don’t end there. I feel like a lot of these conversations start and end with the worker. And the issue is, even if the worker did everything they were supposed to, got every skill they were supposed to, we could still have 6.6 million, or not quite, open jobs today.
Because the next issue is, what exactly is that work of the future? Which we’ve talked about and Diana’s really laid out.
Thirdly, it’s, how does the worker find the work? That is not simple. It’s not simply I go to the classifieds anymore. Some of it is, how do we make it easier for workers to move to work? How do we make sure that the employer actually is looking for the right skills and the right credentials to fill those jobs? For example, a system that Byron talks about a lot, but the fact that I think it’s 60 percent of administrative assistants don’t have a college degree, something like that. If you look at every job posting for an administrative assistant, they all require a college degree. There’s a mismatch there.
Similarly, I live in Prince George’s County, Maryland where MGM just opened the largest casino on the Eastern Seaboard, six thousand jobs, they’re still today not full, most of which we would say are low skill and actually aren’t that hard to train for. There’s a problem there. And then—
LINDSAY: But why is that happening?
AGUH: It’s funny. I sat with the head of community relations for MGM and I asked the question of, do you have a relationship with educational institutions in this county? The answer was no. And that is a very common answer for lots of large institutions in localities. Maybe they have a relationship with the community college—maybe—very rarely with the K-12 system, very rarely with other sources of potential workers.
I’d say the last thing is, how do we redesign our social safety net system? There are so many who would argue that it is designed to help make unemployment not so bad versus how do I end unemployment. How do we think about benefits? How do we think about wage insurance? How do we think about support for people who want to get training? Right now, we have a system of financing for higher education if you want to get a diploma. We have none of that if you want to get a certification or a credential. So ask someone who doesn’t have the cash go to Flatiron School for six months to go learn the new language, whatever that is, in terms of computer science.
So those are kind of the four buckets. And you rarely have to address all of them if you want to solve this challenge, and that’s locally, that’s a state level, and that’s at a federal level.
And again, I think part of your challenge is, how do we make sure we talk about all those buckets? Not simply, how does the worker do what they’re supposed to do? Because that by itself doesn’t solve the problem.
LINDSAY: It seems to me, though, Chike, from what you said, and I think also what Diana said, that the burden shouldn’t just fall on government, whether we’re talking federal, state, or local, but on companies. And how do you incentivize companies to help develop workers into the kind of policies you’re talking about?
FARRELL: I honestly don’t think they need too much more incentive, because already you’re seeing many companies come to understand that they do have all these unfilled jobs, that they have a future workforce issue that they need to start investing in now in order to secure the workers.
And on the task force, we had a number of members from Walmart, from other, including JPMorgan Chase, who have invested enormously in building skills and helping create those bridges. So I think a lot, certainly the large companies, are incentivized to do this.
But it is really important that this is not seen as a public problem at all. This is, as I think you properly point out, is about kind of connecting all the dots, families and individuals, educators and employers, and building those bridges in ways that in the past we’ve been very comfortable saying let the market play it out. We actually have to weave those better. And some countries have done a really job with that, with creating links so that universities are embedded into programs early, even as kids are in school. In Germany, for example, Siemens has done a lot of great work tapping into high school students to start giving them tracks for work. And so I do think that that’s a big part of the answer.
But I want to just address a piece of the—you answered the question well, but one piece, why do we have these gaps? And this credentialing thing is a really important point. I just want to put a fine tone on it.
Go on any job-posting site today and you’ll see minimum two years of experience required. You know, B.A., Bachelor(’s) degree and minimum of two years. So how do you get there from here if nobody gives you a job until you have experience? You just can’t break that cycle and that’s in fact what’s happening. We have a lot of unfilled jobs and a lot of graduate students, even from universities, let alone community colleges and otherwise, who can’t break in there. And we really do need an incentive structure, less to get people to think about workforce development broadly, but to get companies vested in providing people those first opportunities.
Because I would say we don’t have a jobs problem in this country. We have the lowest unemployment rate we’ve had in ages. We have a job trajectory problem of how people enter, how people evolve so that they don’t get stuck as the Uber driver who can only, at a maximum, work twenty hours a day and is never going to break through past $50,000 a year, no matter how hard they work. And, you know, how do we create those ladders that allow people to really make a living wage? You know, 42 percent of people in America make less than $15 an hour. How do you make ends meet? How does that work for providing for retirement, for providing for education? I mean, that’s the challenge we have, not the narrow jobs challenge.
LINDSAY: Did you want to jump in here, Chike?
AGUH: No, she answered it perfectly.
LINDSAY: OK. Good.
Alexandra, how do we think about what we should be doing on the immigration, but also the education front? And I guess my starting point would be I think, you know, you accurately described this administration is interested in reducing both illegal and legal immigration into the United States. So how should we think about immigration? What would be a smart series of steps to take, both for thinking about who comes into the country, but also what we do with people once they’re here?
STARR: So if you want me to do a CFR plug, right, Ted Alden, who handles migration for the CFR, is a fantastic resource. And he’s done some great work with the task force on the issue, talking about, in an ideal world, right, what it could look like.
So I don’t know. I feel these days—I don’t know how you guys feel covering immigration, but sometimes it feels like so much is happening we tend to sort of run to the fire.
But I think something that maybe is missing in a lot of our coverage, particularly when we talk about low-income, low-skilled workers, I think now we have, you know, the people in this room, we’ve communicated that it’s not the way it was twelve years ago when a lot of the migration was coming from Mexico. Now it’s coming from Central America. And I was thinking, I think maybe a gap in our coverage has been, what are we doing, the United States, what is the United States doing in places like Guatemala and Honduras specifically, you know, propping up governments with very problematic governance structures? You know, that contributes to the flow of people here. And I think that is an issue that we should probably be paying more attention on.
I will also say, the CFR.org website, you guys do some fantastic explainers about the migration from Central America. I would highly recommend that.
But in terms of, like, the broader issue, you know, I think Diana would say, like, we’re looking at a worker shortage down the line. And I think in New York one reason the city is so reasonably pro immigrant—you know, the people I follow are not worried about deportation, for a number of reasons. One thing is they don’t drive, right? And the New York NYPD, the New York Police Department, they are prohibited from even hinting or asking about immigration status. So those two things together you can see.
But I think one reason the city is pretty pro-immigrant is we realize without immigrants, the city would grind to a halt in a second, you know?
FARRELL: Could I add a little bit of the economic perspective on this? Because I think you were asking a specific question that I want to just make sure that I hadn’t—I didn’t touch on it before.
So think about high-skill immigration and think about how much of the innovation of America we can attach to people from different countries coming to this environment and this thing to drive. So I think a very proactive approach to continuing to be the place that the brightest and the best want to come would be one piece of the pie.
You think about the other extreme, which is the very low wage and often, you know, what’s referred to as jobs Americans won’t do, I think there is a sense in which we are relying on those populations to play a critical role in keeping prices down for Americans. And we have to acknowledge that, whether it’s in the fields of California picking fruit or if it’s in any number of domestic chores of illegal and sometimes legal, but underpaid people.
And to the extent that we think we need to solve that, Americans have to recognize that the issue is not the people who are desperately trying to get work to feed their families. The issue is the work structures that are creating a class of jobs that wouldn’t be fit for Americans. And so that is an employer issue, that is a public policy issue, that is not—the victims are the people who are under the radar screen and participating in that, they are not the perpetrators. And I think often they’re talked about that way. And so changing that dialogue there to say if we want to address that, we want to create a different work environment, a different minimum threshold, we can do that, but we as Americans are going to pay higher prices for things because that is how that works.
And then I would say, in the middle, which is, you know, where I do think you’re right, the Trump administration has made that very difficult, you know, where all kinds of industries would be able to get work permits of, you know, talented people who are, you know, you’re just trying to buttress skills. Those visas are much harder to get. Marshall scholars, Fulbright scholars, who used to get automatic visas into the U.S. now have to go through different hoops. USAID used to be able to hire in whoever they wanted.
You know, my view on that would be we used to be the country where we exported our ideas by bringing people in who would typically go back to their own countries. And so that’s, you know, that’s the marginal call. But I think we need to change the narrative on what benefits we get from immigration and focus less on these kind of narrow or fearful kind of discussions that are dominating the debate today.
STARR: And I would just add to that, we also have to remember immigrants are job creators. You know, I authored a report for the Council about Latino entrepreneurship and we specifically decided to write about Latinos because oftentimes when you talk about immigrant entrepreneurs, people think immediately about the Chinese and Indian diaspora here. It goes well beyond that and that’s something that maybe we can all pay attention to in our newsrooms.
LINDSAY: OK. At this point, I want to bring the rest of the room into the conversation. So if you’d like to ask a question, just raise your hand and I’ll call on people. Let me remind everybody that this is on the record. If you could, stand up, wait for the microphone, identify yourself, give your affiliation, we’d greatly appreciate it.
The gentleman over there. I like your hairstyle, sir, so you get to go first. (Laughter.)
Q: Yours, too. It takes a lot of work.
Thank you. I’m Joel Christopher. I’m the executive editor at the Courier Journal in Louisville.
Diana, you mentioned a number of times infrastructure concerns. Are other countries seeing the same sort of degradation in infrastructure as the United States? And how are they coping with it?
FARRELL: You know, I don’t claim to be an expert on infrastructure, like, at large and so I will give you a general answer. But I’ll also refer you to places that have really good answers on that.
I would say that there are other countries, like Russia for example, that are having infrastructure issues and others. But in Europe, there’s actually been more ongoing investment and you see it if you go there. Where we really see the contrast is China because the level of infrastructure investments that China is making, not just in roads and kind of old world-type infrastructure, but in new infrastructure, including, you know, their form of internet connectivity, their telecommunications, their AI platforms, not least of which is the soft infrastructure of enabling the skills that do that, they have started introducing AI kind of concepts into pre-K now in ways that we’re not even remotely thinking about. We’re still having our cultural wars about whether we teach X or Y, you know?
So I do think—McKinsey Global Institute has done a very, very good study on kind of the infrastructure gap as they call it and they do country by country and have a discussion about that. And if I recall properly, the U.S. does not look good, but there are other countries that also have gaps and many countries that are doing this much better.
LINDSAY: I’m going to go to the gentleman in the center table.
FARRELL: Actually, the IMF also has a great infrastructure report that does the same.
Q: First of all, good morning everyone. I’m Charles Robinson from Maryland Public Television. I cover both business and politics.
The question of the effect of the Amazon bid and how it affected literally communities all across the United States, our region was able to garner part of it, New York got a piece of it, Nashville got a piece of it. Many communities across this country put together extensive proposals on how to attract this type of investment. My question as it relates to that, will this be the driver, one of the drivers in the future because of how we are technology-wise? And what is the effect of the aerospace industry on various communities around the country and what the development of new ideas and products are?
AGUH: You ask a good question. And it’s good to see a Marylander in the room.
I’ll deal with the first part at least. And honestly, the way I think about it is the way that Steve Casey answered it, which was—was it two hundred communities applied, roughly, for HQ2? And he basically said, if communities had spent half as much energy trying to grow their own companies versus attract this large one to it, a lot of them would be better off. And that is a personal bias that I have. I live in Prince George’s County, you know, I work in Alexandria, and HQ2 will impact my community dramatically now. (Laughter.) But I do think about, you know, the state of Maryland put $9 billion on the table in terms of subsidies, in terms of—
Q: And we lost.
AGUH: And we lost. The state of New Jersey put $7 billion of subsidies on the table. I think about, if you had taken $2 billion and invested in growing companies, some of which we work with in my day job, how much better off of a state would we be? How can you grow the next Amazon versus trying to attract a one-and-only one and potentially give away huge parts of the store?
We asked a question, you asked a question, James, about incentivizing companies to develop skilled workers. And what I did not say was that I would argue we’ve had a little bit of a free-rider problem in terms of companies. OK, standing up companies before in the ’50s and ’60s saying, look, I’m going to train my workers, that’s part of the cost of doing business. Companies the equivalent of Amazon show up and say, for me to be here, you need to deliver me this amount of infrastructure, this number of workers with this—with these skills, and if not I’m going to go somewhere else to someone who will. And that’s a game, I think, jurisdictions and the whole government need to get out of. You provide the basics, obviously good infrastructure, public safety, all the—all the—all the things that we believe are core, but the things that companies should do companies should do.
I’ll defer on aerospace. This is not an area of expertise. But how do we get companies to focus on the basics, growing their own versus trying to import it and potentially giving away the store in the process?
FARRELL: So I totally agree with that. And I would say further that, you know, it really—that bidding war issue is a race to the bottom and it’s different constituencies competing with one another to give away dollars and give away real estate and give away regulatory oversight. And we’ve seen this movie before.
STARR: Yes, that’s correct.
FARRELL: This is what happened with attracting foreign direct investment. So there was a time when the Japanese companies were looking to invest in the U.S. and, you know, Tennessee and everyone started bidding—
STARR: South Carolina, right.
FARRELL: —each other for investments. And the per-job cost, taxpayers’ per-job costs are really, really hard to justify.
There’s a political economy issue, which is that when you do the right thing across the board and companies thrive, a mayor’s name doesn’t get attached to the signing ceremony when you have this big announcement—one will come.
Now, having said that, I do think there’s a silver lining to what happened with that prize context, which was that it galvanized two hundred communities to say, hey, what do we have to offer? What is it? Now, put aside the tax breaks and all that because that is a race to the bottom. But in many cases, more and more communities have an opportunity to articulate the case for what makes their community special and is a great place to do.
And, you know, I think about—I live in D.C. There is now a new organization called the Greater Washington Region. Its origin was another prize, which was when D.C. was making a bid for the Olympics. Businesspeople, policy people, others got together to say let’s organize this bid and try to win. We didn’t win, but we almost won, but it created this group of people who were civil leaders from education, government, private sector, et cetera to say we’ve got to start thinking of ourselves as a competitive region, and how can we connect dots between universities and this and that? And the result now is a standing partnership, the Greater Washington Partnership I think it’s called, and they’re doing just that and they’re galvanizing.
Now, two hundred communities have been galvanized for the purposes of responding to Amazon. I hope they don’t just say, oh, I guess we failed, drop it on the floor, but to say, OK, we’re not going to get Amazon, we’re going to try to cut the tax break part of this, cut all this stuff that’s race to the bottom, and redouble-down on what was the best story we could tell. And how could we make that story better for our companies, for our people, for otherwise? Because Amazon’s play was not—was also about make this—we want to go to a place that’s really attractive to employees and that’s a story that every community needs to be thinking about. So I think that’s a silver lining.
If Amazon made all that stuff public, that would be great because then more and more people could mine that and work and all of you could mine that and do more work on it. But even if they don’t, that knowledge is there in those municipalities, in those counties, in those cities. And I do think there’s more to be done in that world of—that gets back to what I was saying about policymakers doing their job and not just being on TV on talking points. You know, there are jobs to be done. The government and the private sector working together have a lot of work to do and they’re just spending all their time talking to you guys instead of—not you particularly, but media and trying to attract attention that way and not enough just the, you know, rolling up their sleeves and doing what needs doing.
STARR: Can I add one thing to that? You might—do you follow Alexandria Ocasio-Cortez, the—yeah. (Laughter.) She, you know, I will say, whatever you think about her, she is sort of shining a light on certain issues. And this is one of her hobby horses. You might want to keep an eye out on what she ends up pulling out of the New York state government about what exactly it ended up costing the state.
LINDSAY: One thing I will just point out here is that Amazon was a very visible example of something I think Diana and Chike said that has happened a lot, states competing to try to attract investment and jobs. There have been efforts to build state compacts not to do it. Those haven’t progressed as well as they might.
Alexandra mentioned my colleague Edward “Ted” Alden, who’s actually written about this. And again, if you go to CFR.org, type in—
STARR: Fourth time. (Chuckles.)
LINDSAY: It’s a bonus mention. But if you go there, we’ve written about sort of efforts to try to get states not to do this race to the bottom kind of competition.
Let me go all the way to the back of the room.
Q: Hello. Rickey Bevington, Georgia Public Broadcasting.
I live in Atlanta in the largest state east of the Mississippi. The agriculture industry is our largest industry. Atlanta is the largest city in the Southeast. There’s a real urban-rural divide in our state. So I’d like your—this is a very general comment about the future of rural economies in America.
LINDSAY: Who wants to take a stab at that?
AGUH: I would like—I would like to take a part of it. I think, one, in my previous life, my job was to try and expand internet access for low-income communities and particularly rural communities. And it’s an issue that’s important for a variety of reasons, but when we have this future of work conversation, it becomes more important. Because if you look at the jobs that are going to grow, they are actually less and less dependent upon location, meaning the people who need the work need to be in the same place of other people doing the work. But the issue is, particularly for many rural communities, what that requires is high-speed internet access which many of them do not have. I know the stats for Georgia very, very particularly.
So the question becomes—this is where this infrastructure conversation becomes so important, you know? In New York City, in D.C., while we complain about it every day, we can get on without necessarily the most up-to-date infrastructure. But rural communities, I think about—I think about parts of Georgia, I think about, you know, the Choctaw nation in southeast Oklahoma about three hours northeast of Dallas, they’re communities who cannot get in, get plugged into this work unless we make these public investments.
And I would say to the point that you made about the lowest unemployment rate that we’ve had since I was a kid, we still do have, you know, we still do have—and I haven’t looked at the figures recently. But when I think about labor force participation, which is still not where compared to the 1960s or ’80s in terms of the amount of people who could work who are actually in the market looking for work, there are—we’re still not where we want to be. And barriers like this actually stand in the way, particularly for rural communities.
And then a political point that I’ll make. In the past, I think something that was different about those transformations was that the people who lost work and the people who got work, it was a little more heterodox in that—the issue here is that people who are losing work, potentially, live in very different places than the people who are—who are going to be gaining. And so the question is, how do we bring those two together? And some of these public investments are going to help do that. And I think that particularly is important for rural America.
FARRELL: Yeah, I would add to that. I do think you’re right that that is—I mean, whether you’re talking about Georgia or you’re talking about, you know, any state or the nation as a whole, that is becoming a key dynamic. And unfortunately, particularly in the context of the political overtones, there’s been a tendency to exacerbate that separation, not just in politics and verbally, but economically, too. And I think the answer for us as a country is going to be to reweave those linkages so that the rural communities are more dependent on the cities and vice-versa. And exactly, you know, how one does that, I mean, I have some ideas, but I don’t—they’re not great ideas yet.
But I do think that if we don’t reweave that, we’re not going to solve what is, in some sense, is not just an economic issue, but the political issue that you started to make the point, is the reason we need to—like, I started off very optimistic and I am. At the high level, I think this country is very competitive, it has enormous potential, et cetera. Can it deliver that fully to everyone, including people in rural areas, including people who aren’t tapping into an ongoing education system and otherwise? That is a real challenge. And even if it ends up not being that many people number-wise, it’s a critical mass of people who will upend the political system and prevent doing the things that need doing for them and for everyone else, too.
So I think you’re asking the right question and I would just edge in the way of, what are areas where they aren’t one versus the other, but where they’re codependent? That’s going to be the solution space, I hope.
LINDSAY: Going to go over here to the left. We’ve got someone pumping, so it’s a winning move.
STARR: Enthusiastic anyway. (Laughter.)
Q: Hi. Debra Krol, freelance journalist from Phoenix. I report about 99 percent on indigenous issues.
And all of this kind of goes into not only the rural areas, but remote reservation areas where there’s still people who have to climb a hilltop to be able to get one bar of cell phone service. And so how do we see the things like the restrictions and the cutbacks on the FCC’s Lifeline program, which actually sparked private investment into some of these rural areas because they knew that they were going to get income? After all, we all know that people aren’t going to go in a place where they can’t get a return on their investment. So my question is not only from the policy perspective, but from the media perspective of, what advice would you give to media people in this room to bring a little more attention to these issues?
Just about ten seconds’ worth. I have a lot of extended family in the rural area in Arizona and they actually benefit from high-speed internet because they had run fiber down from the main fiber lines along the Interstate 40 down to a tribal headquarters. And everybody along that area is enjoying high-speed internet, so there’s been an increase in self-employment and home-owned businesses. And if we had that all over the country, people wouldn’t have to live in cities, they could live in Snowflake, Arizona and run their business. Thanks.
AGUH: One thing I think this group can do is—and I think we’re beginning to see it. Michael Lewis has written a great book on this called The Fifth Risk. There are all these bodies in Washington that no one knows about that are really important, who make huge decisions. The FCC is one of them. And literally it’s not that hard, just go and read their minutes. But when you talk about whether it be cuts in subsidies for internet service for low-income people, whether it be things like net neutrality, whether it be things like cutting potential internet investment, these are things most people don’t even know are happening and particularly once you get out of your New Yorks and your D.C.s and your—and your L.A.s and your San Franciscos. This is a place where in a lot of communities you come from, you’re shining a light on some of these issues, these critical—so let’s just use the Lifeline program, which most people don’t even know about.
If you look on your cell phone bill, you’ll notice a little fee called the USF fee. It’s like 2 (dollars) or $3 a month. That is a fee that goes into a big fund that funds internet for about forty-one million low-income people. That’s as many people as are on SNAP. That program has been constricted and cut and likely will not reach the amount of people that it needs to. By the way, this is a program created by that great liberal Ronald Reagan in the early ’80s because back then they said to be part of the U.S. economy and be part of the workforce, you need to have landline phone service. And then in the early parts of the Obama administration, we said it should be for mobile phone service. And now we realize the internet is really that gateway to many of the jobs of the future.
So these are things most people don’t know about. I didn’t know about it until I engaged in the work. And this is a place where I think you all can shine a huge light for your communities.
LINDSAY: I want to come up to the front here. Sir?
Q: Yes. A.G. Gancarski—
LINDSAY: Oh, if you could just wait for the microphone.
Q: Oh, absolutely. (Comes on mic.) Thank you. A.G. Gancarski, Florida Politics. This is easier.
Quick question about STEM education, about educational outcomes in general. The last few decades, we’ve seen America fall down in the rankings, especially in primary and secondary education. We’re seeing workforce readiness gaps. I was hoping you all could address those and perhaps some solutions that could reverse the trend in the next couple of decades, if possible. Thank you.
LINDSAY: Want to take a crack at that, Diana?
FARRELL: Sure. I mean, once again, I encourage you to look at this report because I think it does document a lot of this issue in particular. But I—and just I just don’t want to repeat myself because you can all read it.
But, you know, I think that in addition to the topics we’ve touched on, which is kind of rethinking education and rethinking the modules and the, you know, basic reading, writing, and arithmetic, there’s a notion of base level of literacy on a set of issues that we aren’t necessarily bringing in early enough. We need to think hard about the quality of our teacher pool and how we make those jobs that people actually want to have, how we pay them well, how we create both the incentives to laud the teachers who are doing a fabulous job and to get the teachers who are not doing a good job out of that system. And that is a political hot button here as it is in many places. But in some ways, I think that’s as much the issue as the curriculum changes that one would do or not because in many jurisdictions they’ve actually made the curriculum changes that you want, you just don’t have the quality of education that is allowing kids to absorb and to stay on the very rigorous path toward becoming literate in fix, six, seven years.
The silver lining on this one is just the revolution that is taking place in MOOCs, the massive online courses, and the quality of that stuff, most of which is for free. And so if you think about Coursera, if you think about the Khan Academy, if you think about—it is—I don’t know. I really encourage you to spend some time on this. I have children who, you know, at times would, like, check out at the math class and weren’t paying attention and then they got home and they didn’t understand what they were supposed to do. And I realized, well, let’s go to some of these sites. And what you realize is they’re checking out of these classrooms because the teachers are boring them to death. But in front of a really good teacher engaging in the right way, they’re absorbing these issues just as they would absorb language because they have to, that’s the world they live in.
So in addition to a lot of the stuff we talked about, I think this education reform is also about recognizing, if we really do believe this is as important as I think we all believe it is, what are we doing to make that attract the best people possible, as they do in countries like Finland for example?
STARR: I’d like to add to that. This is a place where I think journalists can be really value-added. One of my colleagues, who did the Spencer fellowship the year before me, won a Pulitzer Prize at the Tampa Bay Tribune, detailing how kids were being tracked into these public schools and then charter schools that were completely falling down on the job. But what made it so impactful is she spent five months in the classroom and, you know, that is when there was a response. So I think all of us there can play a role in shining a light on it and potentially affecting change.
AGUH: One just last point on this. I think we have a big debate right now about what technical skills we need to have as part of our education system. I think we have a good—it’s part of the report—a good data visualization on what we call hybrid jobs, jobs that require kind of the just-in-time skills, meaning more of the technical skills for the job at hand, but also what I’d call kind of these timeless skills, the things that we associate with liberal arts education, thinking, leading, so on, so forth. And the issue is, to be irreplaceable by a machine in the future, you need both.
And I’d argue, as someone who was a teacher, who started out here in New York City, we do a good job on the technical, we do not do a good job on measuring those other things that allow someone to learn new skills and be continually employable over time. And I think that’s a light that can also be shined. And it’s particularly true in the K-12 space.
LINDSAY: Let me go to the back of the room.
Q: I’m a stringer for public radio, based in Montreal.
And I was just wondering if you could talk about whether you feel like there are—that what could happen this year or not with the USMCA, whether you feel like the potential impacts of that are big enough to—that you’re watching them or are interested in—
LINDSAY: By USMCA, you mean the revised NAFTA, I’m assuming.
Q: Yeah. And I’m just wondering if you feel like, you know, it’s such a small reworking that it’s not really interesting to you or if there are things you’re going to be watching this year.
LINDSAY: Actually, if I may, can I broaden that question out? Because I’m looking at the subtitle for our session and it is trade, immigration, and workforce development. And this is the first mention of trade we’ve gotten. We have a president of the United States who campaigned and argued that trade has led to an American carnage. So how do we think of or how should people be thinking about trade in terms of overall U.S. competitiveness? Is it a vulnerability for us or something that actually makes us more competitive?
FARRELL: So without question, it has been a source of great strength for our country for a long time, but it is subject—to the point that you made from the very beginning—that while the country as a whole has benefited tremendously, the impact of dislocation on some communities and some people has been quite great. And when you have a general benefit for all and people are content with it, they don’t mobilize; when you have a very hard-hitting, you mobilize. And so I think the debate is off.
But I think on the—on the NAFTA 2.0, which is really what it is, because what it is doing is it’s taking what was an old agreement and modernizing it to include a lot of the things that would have been part of a TPP, that would have been part in ways that are very good.
It is frankly incremental to what we had before in a lot of good ways, but it really misses the mark, and this is a sad thing I have to say. Because CFR wrote a great report—Shannon—on the North America region competitiveness. This was only five years or something, four years ago.
LINDSAY: Shannon O’Neil.
FARRELL: Shannon O’Neil and others here, about think about the power of a North America region as a competitive center that goes all the way from Canada through Mexico and all the ways in which we could mine that for becoming an economic powerhouse that really would rival China, that really would rival whatever brings our way. And we talked about that as recently as four years as something that could happen that might really benefit enormously. It’s hard to believe how far we are from that conversation today.
So I think the movement in a lot of that NAFTA 2.0 is good. And it incorporates a lot of things that future trade agreements should embrace and all. But I think it, my view, it’s far short of the full potential that would come from these countries working together much more—
LINDSAY: Do you anticipate Congress approving the agreement? It’s not off to a fast start.
FARRELL: Let me tell you, my political prognostics in the last two years have been completely wrong, so I’m not even going to try.
LINDSAY: Did you want to jump in and say something, Chike?
AGUH: I agree with all. But I think it’s weird. In some ways, to me, I think we need to decouple the outcomes versus the process. In terms of the outcomes, I agree with almost everything that Diana said.
I think, in terms of the process, meaning, is there good will built among those three leaders—
FARRELL: Totally agree, yeah.
AGUH: —to actually do what you described? I would—I would argue that was a huge loss.
STARR: Yes. Oh, yeah.
AGUH: And honestly, I generally look to 1600 as the cause for that.
FARRELL: I mean, it’s a real—it’s a real tribute to Canada and Mexico that they remain adults during a very un-adult conversation.
LINDSAY: Well, you should note that many of what I take, what you would say were the good things in NAFTA 2.0 or what some of my friends would say is NAFTA 1.1 or maybe NAFTA .9—(laughter)—were sort of imported from the Trans-Pacific Partnership which was implicitly a modernization of NAFTA and that the administration has since broke a lot of pottery to basically get back, more or less, to where we—where the administration had started.
But just a quick thing here, Diana, because we’ve talked about trade sort of independently of technology. And I know, certainly in parts of the country, certainly the Upper Midwest where I’ve spent a lot of my adult life, people will blame almost all of their problems on trade. In essence, we’ve been done wrong by others. But my sense looking at the economic literature is that technological change has been a much bigger driver of job loss, particularly in manufacturing. Among other things, if you look at the steel industry, one person today can produce what took ten people in 1950 to produce. Do I have it wrong here?
FARRELL: No, no, I think that’s exactly right. And at some point, it’s an academic game to separate technology from trade too much. Because in some ways, they feed on each other in ways that enhance them. It’s really hard to have very effective trade without some of the technological changes. And the technological changes are accelerated much, much more rapidly through the exchange of ideas that often comes with trade. And so, you know, people do this where they try to break down how much of it to attribute to one or the other. And I think that technology would take the lion’s share of it. But in some senses, they’ve worked together in very important ways.
I don’t want to undervalue, though, the fact that, for those communities that have been hit by the combination of trade and technology and, in some cases, very directly trade, you know, it’s decimating. I mean, I worked on the task force restructuring the auto industry in the beginning of the crisis and it was very painful to be in Detroit at that time. That was a very, very difficult thing. And, of course, that had a lot to do with the economic crisis, but it had been a long time coming from what were very direct trade impacts. And, you know, it’s a much better story today I’m glad to say. I was in Detroit recently and I was very happy to see it in a very different state, although it still has its challenges.
But I do think that the story of the reduction in poverty in the world at large, the story of incredible innovation that has transpired in the last twenty-five years is not a story we could tell without trade, and so it becomes the villain for all kinds of reasons.
But what we really need—the challenge we need as a society and as economists is to say, how do we harness the benefits of trade and really address the very real and very awful dislocations that it brings? And ditto with technology.
Q: Hi. Good morning. My name is Carlos Ballesteros. I’m with the Chicago Sun-Times.
I think to this point about automation, I wanted to ask, you know, I think the benefits of automation are potentially very, very cool. I think the idea of not having to force people to work very strenuous and dangerous jobs is a good one. But how do we make sure that those benefits are spread out equally? And I’m wondering specifically if universal basic incomes or maybe baby bonds of sorts are a good policy measure to ensure that those benefits reach everyone once automation kills a lot of jobs.
And secondly to Alexandra, I wanted to ask a question to Alexandra. “Amnesty” has become a dirty word in the last decade or so, but we’ve done it several times, most recently in 1986 with Ronald Reagan. Is there a possible reconciliation with the word to really bring people out of the shadows and let them work terror-free without being afraid of being deported just for going to work? Can there be amnesty in the future?
STARR: Do you want me to start?
STARR: Great question. So that happened, it’s amazing, thirty-three years ago now, right? Just stunning. Here, I think journalists really can play an important role. I’ve covered this for a long time. And something that has struck me is, when I first started covering this, it was very hard to get undocumented residents to talk on the record. And then the Dreamers came on the scene and really changed the dynamic that way.
And, look, you know, I think there is—I mean, in this environment, who knows—but when their stories were told, I think the—that’s a big reason that there was a DREAM Act, right? We put a name and a story to an issue that becomes so emotional that it really forced people to start thinking about, you know, there are twelve million undocumented people in this country, to think of them as human beings and members of their community.
I think, you know, it’s interesting, on the Hill they talk a lot about how can we talk about earned amnesty, you know, different iterations of the phrase. Honestly, like, I can’t imagine anything happening during this administration. I mean, if they get even a version of the DREAM Act passed, that will be a huge achievement. And look at what it’s come—I mean, you know, and I talk to some of these young adults and they tell me, like, I just—how can it be that we think we finally have a foothold and then theoretically, you know, the program is in the trash bin? But no, there’s another, you know, reprieve from this judge. It’s like—but we’re not hearing their stories so much these days, as you’ve probably noticed, because the broader environment is so antagonistic and negative. So, no, I don’t think—I can safely say that we’re not going to hear the word “amnesty” for the next two years.
I do wonder, though, you know, given the state of the Democratic presidential primary, you’re going to see a lot of people moving to the left. Then, I would argue, all bets are off, let’s see what happens.
But I agree, you know, your point about, like, how are we going to change the conversation around this? Because you think about, like, thirty-three years with, like, no comprehensive immigration reform, it’s really brought us to a point where you have just a huge slew of a community, like, in the shadows and that has an impact, not just for them, but the generation coming up.
AGUH: On your question regarding UBI and baby bonds—and I would separate the two of them.
LINDSAY: Maybe if you could—if you could just—maybe you can explain UBI for people.
AGUH: Sorry. Yes. No, no, yeah, yeah. Sure. So UBI basically says we will pay every man, woman, and child living in the country a certain income to use as they will, partially with the underlying belief that we’re going to go to a place where we can’t get to full employment; therefore, we’ve got to supplement people’s incomes and livelihoods with just a direct income transfer. That’s universal basic income.
Baby bonds—and if you want to see a baby bond proposal, you can read Cory Booker’s proposal on baby bonds, which came out fairly recently. That has a slightly different goal, which basically is, when a child is born, I’m going to—I’m going to open up an account for them, I’m going to put money into that account every single year, and then when they’re eighteen or twenty-one they’ll get access to that to use also as they will. The goal of that is actually to reduce the racial wealth gap, which is quite different, they have different purposes. I generally kind of think of them differently.
But for UBI, I think it important to address the proposal and address why people find it appealing. I’m skeptical of the proposal. And we dealt with it in our report mainly because, if you look at the—at the cost of it, trillions of dollars a year. If you were to take a portion of that money and invest in many of the things that we recommend, you are able to get people to a better livelihood and people are working and the economy is better off.
I do think it’s important to contend with why people think it’s attractive. And I’m going to be honest. The year that I was born, 1983, Gary Hart announced he was running for president. And most people here don’t remember Gary Hart. If you watch his speech, one of the things he talks about is, how do I reskill parts of America that have been decimated by trade to take on new jobs? That was in 1983.
If you go to Bill Clinton’s State of the Union in 1993 or ’94, he talks about repurposing community colleges to reskill American workers who have been displaced by trade. You can look at every single president, and we’ve talked about this, so it is rational for people to be skeptical that finally we’re going to make the choices that we need to to get—to move people from this part of the economy to this part of the economy. So we have to understand why people find this appealing. We don’t think it will work, but you have to.
It’s why, when we go back to proposing solutions equal to the size of the problem, we can’t simply come back and say I’m going to give you a tax credit. That’s not good enough, that’s not big enough for the problems that people are facing. And we’ve got to come with proposals that are as big and as ambitious that actually are going to work. And so that’s kind of how we’ve thought about UBI, but it’s important to really get to those base, very visceral meanings why people find it appealing.
LINDSAY: Diana, you want to have the last word?
FARRELL: Yeah. Well, I would add to why people find it appealing just a little bit of the political economy aspect of it.
FARRELL: Which is that the left find it appealing because they think of this as, you know, human dignity, every human should have, like, a basic access to the essentials: food and shelter and some people would add health care, and et cetera, et cetera. And the right likes it because they think, OK, fine, let’s just get rid of all those awful government programs, all of them, and just write a check and be done with it and get rid of all that federal bureaucracy. And we’ll compromise in the middle, we’ll get the number right and then sure, fine, we can get to a point. And some of the dialogue that has people excited is that you’re squaring a circle that just has not had room for dialogue.
And I think part of the skepticism, in addition to what you mentioned, is that you walk through the negotiations of, OK, so we eliminate Social Security, right, UBI, but not Social Security. Oh, no, no, no, Social Security is out. OK. We eliminate this, but SNAP stays in, right? Oh, no, we can’t get rid of SNAP. We can’t get—and then you’re back to where we are today.
And so I think there’s an economic argument that takes what is actually—what I like about it, it’s a new idea, it’s different. It’s, like, if we keep trying the same things over and over again and not achieving results, as you suggest, what are the odds that we’re going to get where we want? This is actually a different way of thinking about it.
I’m skeptical because I think it’s throwing some money down the drain. There are lots of people who don’t need money from the government in this way, and so why would we give it to them? And if we were to do that, it would be prohibitively expensive. But also because I just don’t think you get to what the idealized version is, which is it’s a substitute for everything else, which has a reason for being the way it is. It’s trying to address in the most cost-effective way limited issues that people find to be high priorities.
But it’s a really important conversation because it’s not the same script. So Andy Stern has written a book about it. I think Andrew Yang, you know, has written. And I think it’s shaking up a different conversation, which I think is what we need.
LINDSAY: We have one firm rule here at the Council on Foreign Relations and that is we end our meetings on time. And I’m actually not applying by that rule since we’re about two minutes over.
I know there are a lot of questions out there in the audience. I invite you to come up afterwards and talk to our speakers today, also to go to—dare I say it—www.CFR.org—(laughter)—to get more information on this.
But I’d like to ask all of you to please join me in thanking Alexandra, Diana, and Chike. (Applause.)