Donald Trump says he intends to completely change tax, trade, energy and regulatory policies so as to initiate an era of “unbridled” American growth, promising the greatest hiring binge ever witnessed in the country.
This plan looks like it could be hard to execute as the number of unemployed workers is at 7.8 million. He has also said he would cut down on immigration, which would also reduce the worker pool.
To reach his lofty goals, many jobs “would have to come from an increase in labor supply, or an increase in the labor force participation rate” at a level that most economists would consider “pretty far outside the range of credibility,” said Joel Prakken, chairman of Macroeconomic Advisers LLC.
In order to get the 25 million jobs envisioned by Trump without pushing down unemployment, the participation rate would need to go up to 66.7 percent, based on a model by Macroeconomic Advisers. The particiation rate is currently at 62.8%.
Ironically, Trump can only meet his goal if he "more than doubles immigration," according to Mark Zandi from Moody’s Analytics.
http://www.bloomberg.com/news/articles/2016-09-15/trump-lays-out-economic-vision-for-a-record-decade-of-job-growth
The irony in Trump's policy to encourage unbridled economic growth requires him to go against his initial goal of reducing immigration. Providing 25 million jobs Trump has to tackle labor participation and increase it to 68% by doubling immigration. This is a matter of pride versus logic.
ReplyDeleteBy limiting immigration, Trump is creating bad trade relations. It is possible to see how one might think that by limiting immigration more jobs will be made available to US workers, however this will not be the case if net exports decreases with our poor relations. In order to create more jobs, even if immigration is limited, trade relations need to be very good to promote US exports and increase productivity and output of American workers. Thus, it seems Trump does not see the consequences of his immigration plan and the possible effects on US GDP.
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