Economic Outlook: Mark Anderson Predicts

2017: The Year of Major Inflections.
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We’ve been accurately predicting the future for more than 20 years, and so it’s interesting when, during that sweep of time, a single year stands out — for any reason. All of our predictions regarding China’s national business model, for example, have now been proven true, together with the often devastating effects experienced by “trading partners,” global corporations, citizens in inventing nations and victims of state-sponsored intellectual property theft. 
 
Today, Strategic News Service is the only team to have predicted both the global financial collapse (2007) and the oil price collapse (2014), the two most important economic events of our lifetimes. Here is a list of some of the major inflection points we see driving change in 2017.
 
› President Trump at work is more moderate than opponents fear, but capable of major surprises.
 
Theresa May brings the United Kingdom back from China’s embrace.
 
Germany and the European Union join the United States to put the brakes on China’s huge acquisition binge.
 
› China, Russia and other human rights abusers work to censor the global internet.
 
Security concerns and nationalism “balkanize” the net.
 
› Metropolitan West Coast real estate prices lose steam as the China collapse continues and the flow of the yuan from elites slows.
 
Seattle’s role as an international tech center continues to expand.
 
Amazon grows without apparent limit and Microsoft becomes a “cool” place to work.
 
Apple drops off the radar of Things That Matter.
 
Climate change continues to expand in importance and actions taken, regardless of Trump and the Koch brothers.
 
China achieves clear domination of Southeast Asia, both economically and militarily.
 
University tuition and health care costs, already the prime sources of bankruptcy in the United States, rise from the ridiculous to the unsustainable.
 
Medicine moves from the relative dark ages into precision, near-real-time monitoring of “health states,” with new discoveries almost daily. 

MARK ANDERSON is founder and CEO of Strategic News Service, a San Juan Island-based source of advanced information at the intersection of technology and economics.

On Reflection: Foreign Service

On Reflection: Foreign Service

An unlikely alliance is pointing out how immigration reform would aid the economy.
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The United States has long been schizophrenic on the issue of immigration, says Washington Technology Industry Association (WTIA) CEO Michael Schutzler. As each new wave of arrivals played critical roles in the nation’s economic growth, their presence often generated fear and disdain.

Recent anger toward Muslims and Mexicans expressed at presidential candidate Donald Trump’s rallies are exceptional only in that the sentiments come at a time when immigration has actually been on the decline.

Partnership for a New American Economy, a bipartisan group that makes allies of such unlikely pairs as right-wing media magnate Rupert Murdoch and grass-roots activist group One America, has released an extensive report that highlights the benefits of immigration to each state and calls for reforms in the immigration system.

When it comes to Washington state, a key concern is the need for more talented tech workers. “We don’t have enough people to fill our needs,” says Maud Daudon, CEO of the Seattle Metropolitan Chamber of Commerce. In Seattle in 2014, seven tech vacancies existed for every unemployed tech worker.

While many have criticized H-1B visas granted to technology workers as taking away jobs that could go to native-born Americans, the report points out that only 8,000 of the 275,000 people working in Washington’s tech industry possess such visas. Meanwhile, the report argues that each foreign tech worker employed creates an additional two to three jobs for native-born Americans. 

Each graduate-level STEM worker employed creates an additional 2.6 jobs, yet “the United States turns away half of all foreign born Ph.D.’s coming out of U.S. institutions,” says Matt Oppenheimer, CEO of Remitly, a Seattle startup that offers a cheaper way for foreign workers to send money back to their families.

With each generation of immigrants leaving the agricultural workforce in search of year-round jobs that don’t require travel and outside work, Washington’s farmers also depend heavily on new immigrants, says Michael Gempler, executive director of the Washington Growers League, a Yakima organization that represents Washington farmers. A reduced workforce, he says, is causing more agricultural production to move offshore.

A 20 percent reduction in the number of new field and crop workers immigrating to the United State between 2002 and 2014 resulted in $3.1 billion less production of labor-intensive crops like fruits, vegetables and tree nuts, according to the Partnership for a New American Economy report. That production, the group says, would have led to an additional $2.8 billion in spending and created an additional 41,000 jobs.

Locally, says Gempler, lower agricultural production threatens to reduce not only the acreage of fields planted but also investment in factories to process that food. Particularly hurt, he says, are small farmers who don’t have the resources to navigate the complex and costly process for getting workers into the country legally.

Immigrants in Washington
929,505: State residents born abroad (13% of total population)

251,703: Undocumented immigrants in state (who earned $4.7 billion and paid $586 million in taxes and $417 million in Medicare and Social Security in 2014)

Immigrants in Washington Make Up
55% of farmworkers
34% of computer system designers
42% of maids and housecleaners
30% of personal care aides
25% of STEM workers

Immigrants in Washington Contribute
$249.9 billion: 2014 revenues of state-based Fortune 500 firms founded by immigrants or the children of immigrants

$30.9 billion: 2014 earnings of state’s immigrants

SOURCE: The Contributions of New Americans in Washington, by The Partnership for a New American Economy