Let's start with the question of where growth will come. On the other side of whatever it is we're going through because that's
ultimately going to be the question here. I understand for economists like you it comes from one of two sources. Is there
more workers or more productivity. Are we going to get more workers. We're looking at both fewer workers and lower
productivity as you know. So let me focus on the fewer workers aspect for a moment. The real issue demographic issue facing the
US is we have a plummeting birthrate. And so total fertility in the US is now below the level required to keep population growth
constant. And so the issue here is that on average now a woman in the US is expected to have one point six five children over
her lifetime. So women used to have three kids. Then it fell to two women. We're having comfortably above two kids for many
decades with a roof with a fertility rate below 2. That means our population is going to age and it's not going to grow. And
so eventually we're going to have a shrinking working age population. Unless Melissa we have immigration. That's right.
And that's why immigration I think many of us at this conference feel is so very very important. What's your sense of what
economists would say the politics apart about immigration policy. Economists love immigration. We think
immigration is the is the potential answer to our demographic challenges as well as our productivity innovation challenges.
Since immigrants come in they work. They're more likely than native born Americans to be entrepreneurs and innovators. Of
course as you know Larry immigration rates are way down. So we used to bring in you know 2016. We had as many as a million new
people coming into the country every year. That number is now below two hundred and fifty thousand. And so the combination of
a declining native born population and a decline in immigration portends even worse demographic challenges than if we were just
facing one versus the other. Let me see if I can do a little arithmetic based on what you said from 1 million 250000. So
that's about seven hundred and fifty thousand people a year. So that's about half a percent of our workforce. Maybe a little
less so. Half a percent slower labor force grows over time can accumulate to something that is very that is very large. And if
we go back to the birth rates we have about 500000 fewer babies being born a year than in the not distant past. Melissa if you.
What would you say about about this. Most people are scared that immigrants come and they take jobs
for Americans and that if they're more immigrants than there aren't going to be as many jobs for Americans or if there are
jobs because there's more competition. They're going to be paid less. And that's true whether the job people thing is working at
McDonald's or is working doing computer programming at Microsoft. What. How do you how should people feel. Shouldn't
they. Shouldn't they have this worry that they're going to be poor if we take all the immigrants just like they get hurt. If
we take a lot of look at a lot of trade from other countries where they have much lower wages. So so the reason economists
are so bullish on immigration is because we have so much evidence that immigrants are good for the economy. They are good
for most workers. But it is true that there are some groups in some places that will feel wage pressures. And I think the way
we the way we solve this issue is to make sure that we recognize the disparate impacts of certain groups. We recognize that low
wage workers in certain sectors might not experience the benefits the overall benefits that immigrants bring to the
economy. And we take steps to help them. I mean it's not it's not just similar to what we have to do with trade to you know
more imports is good for most people but some people are harmed by it. We're gonna see this too with the shift to green a
greener economy. Some people are going to lose their jobs even though it's better for everyone. And so I mean I think
acknowledging that some people feel and are harmed by this but that's a small concentrated group and taking steps to address
that allows us to do things that make the economy grow and be more productive. So I wanted to come back to fertility. Larry's
pointed out a way in which economics whether misperceived or not they affect our willingness to have immigration. What about
fertility. Are there economic causes for the reduction in fertility the decline in U.S. fertility. And it's really being
driven by a plummeting of birth rates since 2007. Births fell after the Great Recession. They haven't recovered. You can't
point. Any any policy or economic factor that's changed since 2007. So sometimes people will say things like child care has
become more expensive and if we just made child care less expensive people would return to having more than two kids.
I know that is just not the case right. There's nothing there's nothing that easy that we could point to. And in fact U.S. women
now are just having births in the same way that women and other high income countries have reduced their birth rates long before
in the 80s and 90s. So I don't think this is going to be easy to turn around. Lots of other countries have taken direct steps to
try and incentivize people to have more kids. There's a lot of countries that have experimented with baby bonuses a few
thousand dollars. Birth rates go up a little bit in the following year but nothing like the 20 percent increase in
fertility. We would need to get back to replacement level. Also having an expert like you here I can't resist stepping out
of our mutual lane as economists to ask a question that I suspect is on many people's minds. Do you think that the recent
Supreme Court decision and the steps that are going to be taken in a number of states do you think that's going to materially
affect the number of births in the United States. The we do have estimates on this based based on lots of data we have about how
abortion restrictions lead to more birth rates. I expect there will be about 100000 more breast a year.
So yes not that this is this is not going to bring fertility rates
back to where they were. This is going to mean that some women who wouldn't want to have a child now are going to.
Since you raise the issue I will say that this makes the imperative of doing more to support kids and low income women in
this country that much stronger which is you know that that was something that Congress was
talking about for a brief moment in the initial build back better. That stuff got jettisoned in the post Dobbs decision
paradigm. We are going to have some more births disproportionately borne
to low income women. And we need to talk about how we're going to make sure that those children are well taken care of. So
Larry can we make up the loss of population and workers with productivity. We have the Chips and Science Act now. We have the
Inflation Reduction Act both of which I understand are meant to increase productivity. Can we make it up and increase
productivity. You know Melissa organized a terrific session here on R and D and science leadership issues. ISE. There's a lot we
can do but it's both about spending money and it's about spending it. Well there was the famous discovery of DNA by Crick
and Watson today. People can't usually get their first grant until they're over 40. And so I think we need to change the
systems as well as putting more resources in if we want to maximize science innovation and their capacity for productivity.
I think we've also going to have to think about a lot of things. Post Covid. David can I. There's one other factor here. So we've
talked about fewer working age people less productivity per worker. We also have fewer working age people working. So the
decline in labor force participation among people between the ages of 25 to 54 is yet another challenge that we're going to
have to deal with in this country that's negatively going to impact growth going forward. It used to be that 95 percent of
working age men were working. Today it's 85 percent are working. That is an extra 10 percent of people who aren't having the
satisfaction of work aren't contributing to the economy are much less well placed to raise healthy successful families are often
angered and alienated from our society. And so we tend to think of shows like this.
The path of fortunate college educated workers. We have got to be thinking about that large group of men. Men much more than
women who are really struggling. In our country right now. And what can be done
from childhood on to maximize their opportunities.