Business
Opinion: It's time to tell the truth about how immigration affects the U.S. economy
If you’re a physician and a neighbor asks you a medical question, you’re probably happy to share your professional expertise. If you’re a heating and cooling contractor and a friend asks you about her furnace, you likely do the same. In that spirit, I think it’s time for business people to share what we know about immigration: that it powers economic growth and provides many other benefits to the country.
At a time when many politicians are falsely scapegoating immigration for society’s ills — crime, housing shortages, labor issues and more — people with experience working alongside immigrants, employing them and relying on them for the success of their business should speak up and set the record straight.
If that description fits you, here are some handy talking points:
- The United States has plenty of unfilled jobs. The Inflation Reduction Act and the CHIPS and Science Act, both signed by President Biden in 2022, offered incentives for firms to create manufacturing jobs. As of July, the country faces unprecedented labor shortages: The U.S. Chamber of Commerce reports 8 million job openings, substantially more than the total number of unemployed workers, about 6.8 million.
- Immigrants act more as “job creators” than as “job takers.” A 2020 study published by the National Bureau of Economic Research found that immigrants create jobs and enhance the economy for native-born workers. Foreign-born founders — including Google co-founder Sergey Brin (Russia), Intel co-founder Andrew Grove (Hungary) and Facebook co-founder Eduardo Saverin (Brazil) — play pivotal roles in high-growth entrepreneurship. Because immigrants found companies at a higher rate than native-born Americans, they create more jobs than they take.
- Immigrants often fill jobs U.S. citizens don’t want. Most native-born Americans eschew low-paying, physically demanding work in agriculture, construction and food production and processing. Immigrants play a crucial role in supplying workers in these sectors, allowing employers to fill jobs without overheating the economy or accelerating inflation.
- Higher-skilled immigrant workers contribute to innovation and the workforce, boosting productivity. A study of U.S. patents granted from 1990 through 2015 found that immigrants made up 16% of U.S. inventors and produced 23% of innovation output.
- Immigrants are less likely to engage in criminal behavior than U.S.-born citizens. A recent study based on data from 1870 to 2020 found consistently lower incarceration rates among immigrants. Moreover, immigrant incarceration rates have declined since 1960 compared with those of native-born Americans: Today immigrants are 60% less likely to be incarcerated than their U.S.-born counterparts. The recent surge of immigration across the U.S.-Mexico border has not been accompanied by a corresponding increase in crime rates in sanctuary cities such as New York and Denver.
- “Zero sum” notions of a fixed number of American jobs are simply false. The more people work and spend their wages, the more our economy grows and provides jobs for everyone, regardless of where they were born. According to a July Congressional Budget Office report, an increase in immigration from 2021 through 2026 is projected to boost federal revenues as well as spending. This is expected to lower federal deficits by a net $900 billion over the next decade, primarily because new arrivals work, pay taxes and stimulate economic growth, increasing incomes and tax revenues for everyone. That will boost the gross domestic product by $9 trillion by increasing population, labor force participation and productivity.
Most business people who rely on American labor and consumers are well aware of many of these forces. They know that expelling immigrants would shrink the U.S. economy and make it less competitive with other nations.
We know the consequences of immigration bans from experience dating to the Chinese Exclusion Act of 1882, enacted in an era of racial violence such as the 1871 massacre that killed 19 in Los Angeles’ Chinatown. A recent study showed that the act not only significantly reduced the number of Chinese workers of all skill levels in the country but also diminished the quality of jobs held by white and U.S.-born workers, the intended beneficiaries of the law. It led to a 62% decline in manufacturing output and hindered economic growth in the Western states most affected by the law for the next 50 years.
As a proud U.S. citizen who immigrated to the country in 1981, I urge other Americans who understand business and the economy to spread the good word about immigration.
Christopher Tang is a university distinguished professor at the UCLA Anderson School of Management.
Business
U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
Business
They graduated from Stanford. Due to AI, they can’t find a job
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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