Demographics Aren’t Destined

Last June, the Census reported the white-alone population to have declined by .2% in absolute terms between July 2016 and July 2017. Though it may seem trivial, this factoid has immense significance to those on opposing sides of the culture wars, both of which have taken it to herald the decline of white political significance and the rise of a more diverse, and therefore liberal, electorate.

Frankly, there’s too much there to talk about in one blog post. Instead, I’d like to address an issue that’s bugged me for a long time:

In projection after projection showing a minority-white America, Hispanic members of each racial category are separated and lumped into their own group, despite the racial diversity of Latin America. This is significant because the rising tide of American diversity is mainly the result of a four-decade wave of immigration from Latin America and the high fertility rate of their descendants (though both forces have recently calmed). In 1960, 3.5% of the country identified as Hispanic or Latino. Nearly 60 years later, that figure has risen to 18%, with expectations that a quarter of the country will identify as Hispanic by 2065.

But disaggregating Hispanics from racial categories is inconsistent, not just with official Census convention—which designates Hispanic/Latino an ethnicity, a variable mutually independent from race—but also with evidence that suggests many Hispanics are beginning to assimilate more wholly into the white population.

This isn’t a (just) pedantic rant about Census data. I think there’s a solid argument to be made that we’re actually in the middle of an expansion, rather than contraction, of American whiteness.

Take, for starters, that a slim majority of American Hispanics already identify as white, at least when asked about their race on the Census. This doesn’t seem like a vestige of a more racially animose time. Per the 2010 Census, 53% of US Hispanics describe themselves as “white alone,” up from 48% in 2000.

US Hisp Race
Between 2000 and 2010, the share of US Hispanics identifying as white alone increased, while the proportion selecting “some other race” when asked to identify decreased.

Secondly, Hispanic identity seems to fade the further removed from immigration a one is. According the Pew Center’s 2015 National Survey of Latinos, all but 3% of foreign-born Americans with Hispanic ancestry identify as Hispanic or Latino. In the second generation, that share increases only slightly, to 8%. But by the third and fourth generations, it climbs rapidly, to 23% and 50%, respectively. This is truer among younger cohorts.

All told, 11% of US adults with Hispanic ancestry do not identify as such. Because immigration has been replaced by native births as the main driver of US Hispanic population growth in the last few decades, it’s not unreasonable to expect this fraction of “non-Hispanics” to grow.

Hisp growth
Source: Based on Pew Research Center tabulations, Pew Research Center historical projections (Passel and Cohn, 2008).

Also worth considering are Hispanics’ growing geographical dispersion and high rate of intermarriage, especially among younger generations. Twenty-eight percent of 18- to 35-year-old US Hispanics are married to non-Hispanics. Again, this trend grows stronger the longer one’s family has been in the United States: nearly 60% of third-generation US Hispanics ages 18 to 35 are married to someone who isn’t Hispanic. Moving out of the city and marrying extra-ethnically seem, admittedly conjecturally, indicative of cultural assimilation.

It seems like Hispanics are following the arc of other (European and Levantine) immigrant groups who were once, and in some cases still are, considered outside the bounds of conventional whiteness. All of this is to say, I’m skeptical that the way Hispanics view themselves in 2018 is the way they will in 2050—especially as they become more enmeshed in mainstream American society.

Of course, this is just a prediction I’m making in my living room. I don’t have a crystal ball or any special insight into the minds of the American public. I’m going to end with some reasons things might not go as I imagine:

The 101 reason would probably be “politics,” with which race seems to have a bicausal relationship in America. It’s not hard to imagine the Republican party alienating Hispanics with nativism while selling themselves, intentionally or otherwise, as the party of White America. Similarly, Democrats’ ability to court Hispanics relies to some degree on the extent to which they feel shut out from the cultural and political mainstream. Both could push Hispanics to think of themselves as non-white more frequently.

Relatedly, the Office of Management and Budget could affect Hispanics’ racial identities through bureaucratic means. A few years ago, there was talk of combining the race and ethnicity questions, with “Hispanic” offered as a choice alongside Asian, black, white, etc. As I noted at the time, this might bring the Census questions more in line with the way Americans think about race today—but it would also be putting a thumb on the scales. There’s really no neutral position for the Census to take in this matter.

Anecdotally and finally, it also seems like the psychic benefits of whiteness have waned a lot over the last few decades—especially as regards low-status whites. Part of this owes to good news: cultural progress on matters of race, which has begun to erode the relatively elevated status enjoyed by whites at the expense of minorities. Other explanations are more sinister and reflect anomic decay in the white population: rising rates of suicide, drug overdoses, and voluntary unemployment. For one reason or another, whiteness no longer feels as enviable a club as it probably did in the 20th century when Italians, Jews, and other so-called “white ethnics” made the conscious effort to join its ranks.

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Occupational Licensing Versus the American Dream

Imagine: You’re one of the 6.1 million unemployed Americans. Try as you might, you can’t find a job. But you’ve always been great at something—cutting hair, giving manicures, or maybe hanging drywall—so great, in fact, that you reckon you could actually make some real money doing it. What’s the first thing you do?

If your answer was something other than, “Find out how to obtain the state’s permission,” you’re in for a surprise.

A shocking amount of occupations require workers to seek permission from the government before they can legally practice. This includes not just the obvious, like doctors and lawyers, whose services, if rendered inadequately, might do consumers life-threatening harm, but also barbers, auctioneers, locksmiths, and interior designers.

This phenomenon is known as occupational licensing. State governments set up barriers to entry for certain occupations, ostensibly to the benefit and protection of consumers. They range from the onerous—years of education and thousands of dollars in fees—to trivialities like registering in a government database. At their most extreme, such regulations make work without a permit illegal.

As the United States transitioned from a manufacturing to a service-based economy, occupational licensing filled the “rules void” left by the ebb of labor unions. In the past six decades, the share of jobs requiring some form of license has soared, going from five percent in the 1950s to around 30 percent today. Put another way: over a quarter of today’s workforce requires government permission to earn a living.

There’s little proof that licensing does what it’s supposed to. For one, the potential impact to public safety seems wholly incidental to the burden of compliance for a given job. In most states, it takes 12 times as long to become a licensed barber as an EMT. In a 2015 Brookings Institution paper, University of Minnesota Professor Morris Kleiner, who has written extensively on the subject, states: “…economic studies have demonstrated far more cases where occupational licensing has reduced employment and increased prices and wages of licensed workers than where it has improved the quality and safety of services.”

Ironically, the presence of strict licensing regulations also seems to encourage consumers to seek lower-quality services—sometimes at great personal risk. When prices are high or labor is scarce, consumers take a DIY approach or forego services entirely. A 1981 study on the effects of occupational licensing found evidence for this in the form of a negative correlation between electricians per capita and accidental electrocutions.

A less morbid, but perhaps more salient, observation is that licensing often creates burdens that are unequally borne. Licensing requirements make it difficult for immigrants to work. In many states, anyone with a criminal conviction can be outright denied one, regardless of the conviction’s relevance to their aspirations. These policies, coupled with the potential costs of money and time, can make it harder for poorer people, in particular, to find work.

But surely, you might say, there must be some benefit to licensing. And technically, you’d be right.

Excessive licensing requirements are a huge boon to licensed workers. They restrict the supply of available labor in an occupation, limiting competition and in some cases raising wages. There’s little doubt that occupational licensing, often the result of industry lobbying, functions mainly as a form of protectionism. A 1975 Department of Labor study found a positive correlation between the rates of unemployment and failures on licensing exams.

Yet even licensed workers can’t escape the insanity unscathed. Because licenses don’t transfer from state to state; workers whose livelihoods depend on having a license face limited mobility, which ultimately hurts their earning potential.

Though licensure reform is typically thought of as a libertarian fascination—the libertarian-leaning law firm Institute for Justice literally owns occupationallicensing.com—it also has the attention of more mainstream political thinkers. The Obama Administration released a report in 2015 outlining suggestions on how the states might ease the burden of occupational licensing, and in January of this year, Labor Secretary Alexander Acosta made a similar call for reform.

Thankfully, there seems to be some real momentum on this issue. According to the Institute for Justice, 15 states have reformed licensing laws to “make it easier for ex-offenders to work in state-licensed fields” since 2015. Louisiana and Nebraska both made some big changes this year as well. That’s a great start, but there’s still much work to be done.

This article originally appeared on Merion West

Americans Aren’t the Ones Who Should Be Mad about Chinese “Dumping”

One of the few issues upon which Clinton and Trump seemed capable of agreement in the second debate was that cheap steel from China was hurting America. Given how alarming Sunday’s exhibition was, it might have been a nice respite. That is, if they had not both been so wrong.

China produces about as much steel as the rest of the world combined. This is due partly to cheap labor and strong domestic demand, but mostly to heavy government subsidies. Now that China’s economic growth has slowed, markets are awash with cheap Chinese steel.  This has led China’s trading partners to accuse China of “dumping” steel.

Dumping, for those not familiar with the term, refers to the act of selling a good in a foreign market for less than the cost of production. It’s against WTO rules and is penalized by tariffs implemented by importing nations. The United States recently levied a 522% tariff on Chinese cold-rolled steel, which is used for construction and to make shipping containers and cars.

The general consensus, dutifully embraced by both candidates, is that dumping is bad for the importing country and an act of aggression by the exporter. But if you think about it, this is pretty absurd.

First of all, countries don’t trade with each other. The United States doesn’t buy wine from Portugal; American companies buy wine from Portuguese companies. We’re not “getting killed” on bad trade deals as Donald Trump fears; there isn’t even a “we” in the sense that he suggests. There are only people, and people don’t habitually engage in voluntary exchanges at a loss. It should be obvious that importers (American companies, in this instance) are the ones benefiting from cheap steel from China. That’s why they prefer to buy it over more expensive steel made domestically.

It’s true that China’s not a market economy in the same way that America is; their government owns and subsidizes far more than ours. That might sound like an advantage for the Chinese, but it’s really not.

Chinese producers are able to sell steel for less because of large subsidies from their government. The people who benefit from this are the people buying and selling steel–importers and Chinese steel companies, respectively. The people who lose are non-competitive firms and those paying for the subsidies…which would be the Chinese taxpayers.

Subsidized exports are really a transfer of wealth from within a country to without. Importing parties are able to be more profitable and productive, which is precisely why Donald Trump builds with Chinese steel and why we’re all better for it. Yes, it hurts American steel companies, but whatever resources are devoted to domestic steel production can be diverted to other areas with better returns.

Conversely, import tariffs are paid by the importer, and ultimately the consumer. In other words, in order to protect us (read: domestic steel companies) from what amounts to discounted steel, our government taxes the hell out of it so that we end up paying more. Saying that this helps our economy is like claiming that rolling up your sleeves makes your arms warmer. Remember that any jobs or income generated by such tariffs comes directly at the expense of American consumers who are being forced to forgo savings or purchases they would have made with the money they saved on steel.

If millions of tons of steel fell from the sky would we draft legislation to tax the heavens? No, we’d take the free steel and build things with it. If China wants to take money out of its citizens’ pockets and use it to make steel for the rest of the world, Chinese citizens should be outraged. But why should the rest of us complain? When someone gives you a gift, the correct response is: “thank you.”