The economy Trump will inherit

Summary

Marketplace Podcast Summary: "The Economy Trump Will Inherit"
Release Date: November 7, 2024

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Introduction: Market Reaction to Trump's Election

The episode begins with host Kyle Rysdal outlining the significant market movements following Donald Trump’s election victory. Early reactions saw major stock indices climb by over 2.5%, accompanied by a surge in bond yields, signaling a shift in investor sentiment ([01:05]). Kai Rysdal adds that the decline in the VIX—the market's volatility index—by more than 20% reflects reduced uncertainty about Trump’s economic policies ([02:16]).

Notable Quote:
“The stock market is up for a pretty simple reason.” – Kai Rysdal ([02:13])

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Stock Market Surge Driven by Corporate Tax Cuts

The immediate boost in stock prices is attributed to Trump's campaign promise to reduce the corporate income tax rate. David Kelly, Chief Global Strategist for JP Morgan Asset Management, explains that lower business taxes are favorable for corporate earnings and, consequently, stock valuations ([02:20]).

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Bond Market Concerns: Debt and Deficits

While the stock market responded positively, the bond market exhibited concerns regarding the potential increase in government borrowing necessary to fund Trump's proposed tax cuts. Rick Reeder, CIO of Global Fixed Income at BlackRock, warns that financing these tax cuts might require the government to borrow trillions, pushing bond yields higher to attract investors ([03:04]).

Notable Quote:
“To pay for promised tax cuts, the government may have to borrow trillions from the bond market.” – Rick Reeder ([03:04])

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Cryptocurrency Gains and Renewable Energy Setbacks

In the cryptocurrency sector, Bitcoin experienced a nearly 7% increase, bolstered by Trump’s explicit support for digital currencies and his crypto-based lending platform, World Liberty Financial ([03:21]). Conversely, the solar industry faced a downturn, with solar stocks declining by double digits. Michelle Davis of Solar Wood Mackenzie attributes these losses to policy uncertainties affecting incentives established by the Inflation Reduction Act ([03:57]).

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Economic Outlook with Insights from Greg Ip

Greg Ip, Chief Economics Commentator at The Wall Street Journal, provides a detailed analysis of the current U.S. economy. He highlights that the U.S. has achieved rapid growth, surpassing other major developed countries, while simultaneously enjoying decreasing inflation and rising productivity ([05:19]). Ip emphasizes that this robust economic performance suggests a resilient foundation as Trump takes office, making a recession unlikely in the near term ([06:33]).

Notable Quote:
“The United States has grown very rapidly in the last year, certainly much faster than most other major developed countries.” – Greg Ip ([05:19])

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Implications of Tariffs and Tax Cuts

Ip discusses Trump’s primary economic policies: imposing higher tariffs and enacting tax cuts. He explains that while tax cuts can stimulate economic growth and increase deficits, tariffs are likely to introduce inflationary pressures. The financial markets are currently anticipating these outcomes, although the actual effects will depend on the specifics of policy implementation and Congressional approval ([07:04]).

Notable Quote:
“Higher tariffs... will lead to higher inflation, and tax cuts... will lead to more rapid economic growth and larger government deficits.” – Greg Ip ([07:04])

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Federal Reserve’s Policy Response with Heather Long

Heather Long, a columnist at The Washington Post, discusses how Trump’s inflationary policies might influence the Federal Reserve’s monetary strategies. Given the strong economic indicators, the Fed may have the flexibility to pause interest rate adjustments and adopt a wait-and-see approach regarding the impact of fiscal policies ([16:22]). Long notes that while a rate cut is expected imminently, future adjustments will depend on how swiftly and effectively Trump’s policies take effect ([17:33]).

Notable Quote:
“The Fed could let the economy run for a little bit. They could cut tomorrow, which seems to be what they're going to do, but then just hold, right?” – Kyle Rysdal ([17:44])

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Currency Strength and Inflationary Pressures

Long further explains the implications of a stronger U.S. dollar amidst rising tariffs. A robust dollar can make U.S. exports less competitive internationally, potentially hindering efforts to revive manufacturing. Additionally, a strong currency combined with increased tariffs could exacerbate inflationary trends within the domestic economy ([19:18]).

Notable Quote:
“It’s going to make it more difficult to sell US Products abroad and revive US Manufacturing.” – Heather Long ([19:18])

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Immigration Policy and Labor Market Impacts

The podcast shifts focus to immigration, highlighting Trump’s pledge to implement the largest deportation program in U.S. history and restrict legal immigration. Economists like Stan Voiger from the American Enterprise Institute warn that reducing the labor force through deportations could cut GDP growth by nearly half a percentage point ([22:19]). Additionally, Tarek Hassan of Boston University suggests that immigrants have played a crucial role in controlling inflation by supporting the labor supply ([22:35]).

Notable Quote:
“They don’t generate capital income for others.” – Greg Ip ([22:31])

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Workforce Development Challenges

Matt Levin explores the broader implications of a shrinking labor force, particularly in construction and manufacturing sectors. Companies like GE Appliances are actively working to build skilled worker pipelines through partnerships with local high schools and community colleges. However, challenges such as generational workforce gaps and limited vocational training persist, making it difficult to fill critical roles ([24:12]-[27:22]).

Notable Quote:
“We built a mock assembly line where students learn hands-on experiences from our production employees.” – Katina Whitlock, GE Appliances ([26:54])

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Public Trust in Government Economic Data

An intriguing segment reveals that trust in government economic data has become increasingly polarized along partisan lines. Initially, Clinton voters exhibited significantly higher trust in economic data compared to Trump voters in 2016. However, by 2018, this trend had reversed, with Trump supporters showing greater trust, complicating the national consensus on economic assessments ([25:51]-[27:46]).

Notable Quote:
“In 2016, Clinton voters trusted the data basically 2 to 1 over Trump voters. In 2018 that flipped almost on its head.” – Kyle Rysdal ([25:51])

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Conclusion: Navigating Uncertainty

The episode concludes by emphasizing the uncertainties surrounding the implementation of Trump’s economic policies. While immediate market reactions are positive, the long-term economic outcomes will depend on how effectively these policies are executed and their interaction with existing economic dynamics. The podcast underscores the importance of monitoring these developments to understand their full impact on the U.S. economy.

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Notable Advertisements:

The episode includes advertisements for Public.com, Remarkable, Vanta, Fidelity, and Odoo, promoting financial services, digital note-taking solutions, security programs, investment planning, and business management software, respectively. These segments are clearly marked as sponsored content and do not pertain to the episode's main discussions.

Example Advertisement Quote:
“Lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds only at Public.com.” – Kai Rysdal ([00:00], [13:23])

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This comprehensive summary encapsulates the key discussions, insights, and conclusions from the "Marketplace" episode, providing a clear and engaging overview for those who have not tuned in.

Transcript

[Kai Rysdal]

Heads up folks. Interest rates are falling, but you can still lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds on public.com you might want to act fast because your yield isn't locked in until the time of purchase. Lock in a 6% or higher yield with a bond account only at public.com marketplace, brought to you by Public Investing member FINRA and SIPC. As of September 26, 2024, the average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed. Not an investment recommendation. All investing involves risk. Visit for more info. This Marketplace podcast is supported by Remarkable Are you still taking notes on paper? Change the way you work with Remarkable Paper Pro, a premium digital notebook with the feel of paper for taking notes, reviewing documents and getting organized. Get the digital tools you need for your workday without any distractions and stay focused. With a unique color display that reflects natural light, it's portable, practical and professional. Get yours [e-mail] it was indeed a.

[Kyle Rysdal]

Change election the economic changes to come ahead on the program today. From American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rysdal. It is Wednesday today, November. Good as always to have you along, everybody. The list of things that are going to change in this economy under President Elect Trump is a long one. We are going to spend the program today talking about them. The first started happening even before the election was called. In the wee small hours of this morning, markets started noticing and money started moving and it kept happening throughout the day. The major indices up 2.5% or more across the board, bond yields spiking. The change at hand. Here is certainty, or perhaps the absence of uncertainty now that we know who has won with the obligatory caveat that the stock market is not the economy. We'll talk about the actual economy in just a minute. Marketplace's Sabri Benishore gets us going.

[Kai Rysdal]

The stock market is up for a pretty simple reason.

[Kyle Rysdal]

One of the many proposals that Donald Trump made while on the campaign trail.

[Heather Long]

Was that he was going to cut.

[Kyle Rysdal]

The corporate income tax rate.

[Kai Rysdal]

David Kelly is chief global strategist for JP Morgan Asset Management. Business tax cuts are good for earnings and stocks. Then there is the VIX that is a measure of market volatility and or fear that was down more than 20% by early this morning. There was a fear of instability. Raphael Duguay is an assistant professor at the Yale School of Management.

[Greg Ip]

That we might end up with an.

[Kai Rysdal]

Ambiguous result and that result might get.

[Greg Ip]

Challenged, we might end up with riots, you name it.

[Kai Rysdal]

And what we're seeing this morning is that the results are quite clear. So fear gone, volatility down. Meanwhile, the bond market had a different fear that has not gone away.

[Kyle Rysdal]

Every person who invests in bonds, it's the first thing they want to talk.

[Kai Rysdal]

About is the debt and the deficits. Rick Reeder is CIO of global fixed income at BlackRock. To pay for promised tax cuts, the government may have to borrow trillions from the bond market.

[Kyle Rysdal]

All of that has pushed people to.

[Kai Rysdal]

Say, gosh, if we're going to issue.

[Kyle Rysdal]

This much debt in the marketplace, we need to be at a higher yield to absorb it.

[Kai Rysdal]

So bond yields went up proactively. Over in the world of cryptocurrency, there were winners. Bitcoin popped up almost 7% even just last night. Trump was very clear on his support for bitcoin. Haney Rushwan is CEO of 21Shares, which sells crypto exchange traded funds. Trump himself has a lending application called World Liberty Financial that it itself is built on crypto. Over in the loser column is the solar industry. Solar stocks fell double digits by morning. Michelle Davis is head of Solar Wood Mackenzie. The new Trump administration does present risks.

[Greg Ip]

To a lot of the different incentives in the Inflation Reduction act that would.

[Kai Rysdal]

Support a lot of these industries. Of course, election uncertainty has now been replaced by policy uncertainty. A lot will depend on how many campaign trail promises make it into reality. In New York, I'm Sabri Benishore for.

[Kyle Rysdal]

Marketplace on Wall street today. I mean, Sabri kind of covered that, right? Still details. When we do the numbers, it's going to take a while to understand exactly how all the change that the president's elect is going to bring to this economy is going to play out. What we do know, though, is that Trump will take office in January with an economy that is, to quote Greg IP of the Wall Street Journal, remarkably strong. So we got Greg on the phone to help understand why that is and what it's going to mean come the change in administrations. Greg, thanks for coming on the program.

[Greg Ip]

Thanks for having me.

[Kyle Rysdal]

You say in the beginning of this piece that was published, I don't know, what, 10 days ish or so ago, you say more impressive than the economic growth that we're having in this country is its quality. What does that mean?

[Greg Ip]

The United States has grown very rapidly in the last year, certainly much faster than most other major developed countries. And even though it's grown rapidly, this has occurred while inflation has come down and while productivity per worker has gone up. So this tells us that the growth is not coming by straining the economy's capacity, which could lead to inflation, the kind of growth that means the Fed can feel comfortable continuing to lower interest rates, which makes it very unlikely we'll have a recession.

[Kyle Rysdal]

And we are, you say, and we've said before on this program, an outlier internationally. Right. Europe and the rest of them are still struggling quite a bit.

[Greg Ip]

That's right. If you look at the last year or two, the United States has grown faster than almost all of its peer economies. And when you dig into the numbers, a key reason why is because productivity has been growing faster in the United States, which seems to reflect a few intrinsic endowments that the US has that they do not like, our abundant energy resources and the very strong technology sector, which can be seen in the amazing performance of companies like Nvidia and Apple.

[Kyle Rysdal]

So let's talk nuts and bolts, then. What does this mean, given the news of the day or the news of last night, I suppose. What does this mean practically for President Elect Trump?

[Greg Ip]

Well, I think the first thing it means is that Trump basically inherits a pretty good economy. He kind of has the wind at his back. There's really no reason to think that there's a recession in store in the next year or two. And based on what we know now, inflation is unlikely to be a big problem. It seems to be on track to decline from here. And that seems to be why financial markets were relatively buoyant coming into the.

[Kyle Rysdal]

Election, even though, as many analysts and economists have pointed out, the policies of the President elect do tend to be somewhat inflationary.

[Greg Ip]

Yeah. So let's take a look at how we might expect the economic outlook to change under the policies of President Elect Trump. The two main parts of his platform are higher tariffs and lower taxes. And economists will tell you that higher tariffs, all else equal, will lead to higher inflation, and that tax cuts, all else equal, will lead to more rapid economic growth and larger government deficits. And if you look at how financial markets responded to the news of the election, that's exactly what they're anticipating. But I think it's very important to emphasize that we don't actually know what's going to happen. Trump himself has been relatively inconsistent in specifying exactly what he plans to do with respect to either tariffs or taxes. And of course, some of these proposals have to go through Congress as well. And we're actually still waiting to find out what the full composition of Congress will be and what its preference will be.

[Kyle Rysdal]

We know that presidents are unduly credited and unduly blamed for what happens in an economy. Do you see anything, you know, springboarding off the premise of this piece that will change the trajectory of the American economy?

[Greg Ip]

I think that even before the election, it was fairly clear that the next few decade or so will be a period where inflation pressures will be more of a problem than they were in the decade before the pandemic. Cast your mind back if you could. Before the pandemic, inflation and interest rates were low around the world, in part because it was the long tail of the global financial crisis, which had depressed investment and demand. Well, the next 10 years, I think, are going to be very different. We've put the global financial crisis long behind us. People everywhere are worried about supply chains because of things like pandemics, because of things like climate change, because of things like geopolitical conflict. And so I think that is an environment where inflation is more likely to be a problem on the upside than the downside. And that would have been true no matter who became president. And I think it basically affects how policies such as tariffs and tax cuts will be received. And I think that is a factor that President Elect Trump and his team will also have to deal with.

[Kyle Rysdal]

Greg Ipp, he's the chief economics commentator at the Wall Street Journal. Greg, thanks a lot for your time. I appreciate it.

[Greg Ip]

Thanks for having.

[Kyle Rysdal]

If what's passed is indeed prologue, and if we're to take him at his word, tariffs will be the key trade policy in a second Trump administration. Last time around, he targeted steel and aluminum, also Chinese imports. This time, he has promised tariffs as high as 20% on everything that comes into this economy, 60% on everything from China. That, of course, will affect both businesses and consumers in this economy. So we asked marketplaces. Kristin Schwab to look at what tariffs have meant so far for businesses and consumers in this economy.

[Kai Rysdal]

Rick Muscat woke up with tariffs on his mind.

[Greg Ip]

Well, we started that conversation first thing.

[Kai Rysdal]

This morning, one he's had on and off since 2016. Muscat is president of footwear brand Deerstags, which makes most of its shoes in China. He says tariffs or not, manufacturing will stay there.

[Greg Ip]

It's very costly to move production from one country to another. There's a lot of investment in equipment, the molds, the patterns, the cutting dies.

[Kai Rysdal]

Tariffs are supposed to encourage US Companies to diversify their supply chains. Erica York at the Tax foundation says this did happen in some cases during Trump's last term. Imports from Taiwan, from Mexico, from the European Union increased. We also saw some substitution toward domestic suppliers. American Steel, for instance, got a boost, but tariffs come with a price. Scott Lincecomb at the Cato institute says the 2018 steel tariffs affected makers of beer kegs, cars and cutlery. Those companies were extremely hard hit because a huge chunk of their costs just suddenly got more expensive, lindseycombe says. Some companies ate those costs. Many pass them on to consumers. That's what Muscat at Deerstag says he'll do. Trump's proposed 60% tariff would add something like 25 bucks onto the sticker price of his shoes. There is one other option.

[Greg Ip]

If I don't pass the costs on ultimately to the consumer, then I have to reduce my cost of doing business.

[Kai Rysdal]

So that I could stay in business, he says. That would mean cutting staff. I'm Kristin Schwab for Marketplace.

[Kyle Rysdal]

Coming up, if you remove migrants from.

[Kai Rysdal]

A local economy, you're going to raise prices.

[Kyle Rysdal]

So what does that mean now? First though, let's do the numbers. Dow Industrials up 1,508 points today three and six tenths percent 43,729. The NASDAQ ascended 544 points three percent 18,983 the S&P 500 up 146. That's points. Two and a half is the percent 59 and 29 prediction markets where people place bets on the outcome of, you know, say, a presidential election. They claimed victory along with the president elect today. They say they predicted the win more accurately than traditional polling. So among those operating prediction markets, Interactive Brokers Inc. Rang up 10 and 8 10%. Robinhood soared 19 and 6/10%. Tesla shares climbed 14 and 3/4%. Dane. No reason for that, I'm sure. Bonds down Yield on the 10 year T note 4.43%. You're listening to Marketplace.

[Kai Rysdal]

Listen up folks. Time could be running out to lock in a 6% or higher [e-mail] but you can lock in a 6% or higher yield with a bond account. But your yield isn't locked in until the time of purchase. So you might want to act fast. Lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade corporate bonds. [e-mail] Marketplace brought to you by Public Investing member FINRA and SIPC. As of September 26, 2024, the average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed. Not an investment recommendation. All investing involves risk. Visit public.com disclosure bond account for more info. Proving trust is more important than ever, especially when it comes to your security program. Vanta helps centralize program requirements and automate evidence collection for frameworks like SoC2, ISO 27001, HIPAA, and more. So you can save time and money and build customer trust. And with Vanta, you get continuous visibility into the state of your controls. Join more than 8,000 global companies like Atlassian, FlowHealth and Quora who trust Vanta to manage risk and prove security in real time. Now that's a new way to GRC. Learn more at vanta.com marketplacepm that's vanta.com marketplacepsm Doors take us to summers away or winter adventures and afternoon getaways. Your dedicated Fidelity advisor can help you open those doors by working with you on a comprehensive plan to help you reach your wealth suit full potential. Because doors were meant to be opened, visit fidelity.com Wealth Investment Minimum Supply, Fidelity Brokerage Services LLC Member NYSE SIPC this Marketplace podcast is supported by Odoo. Let's face it, nowadays most companies have to rely on dozens of expensive, disconnected platforms to run their business. And even then, things can get a little, well, stressful. But with Odoo's all in one management software packed with a suite of fully integrated business applications, every process is streamlined, tasks are automated, and success is just a few clicks away. See how Odoo can take your business to the next [e-mail] that's od o.com this is Marketplace.

[Kyle Rysdal]

I'm Kai Rysdal. Lost, perhaps in the news of last night and this morning is that today is the first day of the Fed's policy setting meeting. We will get the interest rate announcement tomorrow that as a reminder, interest rates is monetary policy. What the President Elect and Congress do is fiscal policy. Separate but symbiotic. So to read the tea leaves on what those fiscal changes we're talking about today are going to mean for the Fed, we've gotten Heather Long on the phone. She's a columnist at the Washington Post. Also, not for nothing, one of our Friday regulars. Hi Heather.

[Heather Long]

Hi Kai.

[Kyle Rysdal]

So picking up where I left off with Greg IP and the President elect's proposed policies. Many of them are in fact inflationary, right? Tariffs restricting immigration. What do you suppose those inflationary pressures are going to mean for the central bank?

[Heather Long]

It's a really tricky time because as you say, these policies are inflationary. But as Greg Epp was pointing out, it takes time for them to kick in. You know, thinking back to the first Trump administration, it took over a year to get those China tariffs in place, for example. So if you're the Fed, you don't want to preemptively start to plan for that right away. But what we are already seeing market reaction on is a widespread belief that because the economy has been doing really well the last few months, so many of these data points are coming in hot or stronger than expected. It gives the Fed some breathing room to take a pause. It's still widely expected to cut tomorrow on Thursday, 25 basis points. It's starting to be a little up in the air whether they'll cut in December or certainly in early 2025. So it gives them a chance to wait and see how fast the Trump administration will act.

[Kyle Rysdal]

Keep going with that for a second. So the numbers are coming in hot. So the Fed could conceivably let the economy run for a little bit. They could cut tomorrow, which seems to be what they're going to do, but then just hold, right?

[Heather Long]

I think so. You've seen the odds of the December rate cut come down a little bit. It's still at about 70%. But remember, that can change very fast. Fed Chair Powell has become a dexterous communicator. And he could use that press conference tomorrow to sort of start to open the door to, we think we're in a good place, we're in a bit more wait and see, these types of terms that he knows how to use pretty well at this point in the game.

[Kyle Rysdal]

Sorry, this is a little sideways, but how many questions do you suppose he's going to get? Or the same question posed various different ways about Fed independence, which we have talked about on this program?

[Heather Long]

It's tricky for him. Obviously, his tenure ends in May of 2026. President Trump will appoint his successor, and there's not much Powell can do about that. I think he's tried really hard to shore up this institution as much as possible and to protect it from political influence, but it's no long going to be his game and his his say very soon. So you're right, he'll get a ton of questions tomorrow. He'll do the artful dodge. He's very good at saying, as you know, you've been asking him to, you know, we don't do politics, da, da, da, da, da. But you're right, he's going to have to take the policies into consideration very soon.

[Kyle Rysdal]

Yeah. All right, Back to back to policy stuff, the dollar. So tariffs are going to go up, interest rates here. You know, the Fed's going to lower theirs. But the bond market has some say in that what's this all going to for the dollar?

[Heather Long]

Well, it's certainly we saw it today and dollar's looking hot, hot, hot. It's a good time, if you can afford it, to book a vacation abroad because the dollar goes a long way. But you know, realistically, with the dollar rising, the euro falling, the Mexican peso really sold off in the last 24 hours, the yen, this is not going to help that inflationary situation. You know, it's kind of going to make it more difficult to sell US Products abroad and revive US Manufacturing in want to and Trump has pledged to do so. It's a bit of a question mark. It's interesting. Trump campaigned on lowering the value of the dollar and we've certainly gone the opposite way. I think the other point that I'll just pick up on that Greg was talking about a little bit, I think some of this movement we're seeing in the dollar and also in the bond yields, part of it is what we've been talking about, expectations of stronger growth, more inflation. But some of it too is just uncertainty. Yes, we have certainty now who the president's going to be, but there's really a lot of concern and a lot of confusion and uncertainty about how, how many tariffs is he really going to do? Is it going to be 10%, 20%? We haven't talked about immigration, another huge factor. You know, does he truly stop the border on day one? Does he truly, you know, attempt to deport people and millions and millions of people? I mean, these, these are seismic shifts in the economy that people, it's very.

[Kyle Rysdal]

Hard to model these economic unknown. Unknowns. Right. I mean, that's kind of what they are.

[Heather Long]

And imagine being in the Fed in the middle of all that.

[Kyle Rysdal]

Right. Heather Long at the Washington Post. Thanks, Heather.

[Heather Long]

Thanks, Kyle.

[Kyle Rysdal]

Heather mentioned immigration and lo and behold, here it is. Change is coming to immigration policy as well. Big changes. It is worth a note that immigration, politically sensitive though it may be, is fundamentally labor policy. The once and future president has promised that he is going to launch, as Heather said, the biggest deportation program this country has ever seen, targeting the estimated 11 million or so unauthorized immigrants in this economy. And Trump advisers have also been drawing up plans to restrict legal immigration as well. Marketplace's Matt Levin explains how that is going to affect everything from growth to wages to, oh, look, inflation.

[Kai Rysdal]

So some caveats here. Trump has a history of making big promises on immigration that don't actually materialize, that whole build a wall and make Mexico pay for it thing. But if this time around Trump really does ramp up deportations. Economist Stan Voiger at the American Enterprise Institute estimates GDP growth would be cut by almost half a percentage point, which is a lot. Not only does the overall workforce shrink, but deported workers can't contribute to the economy. People don't earn money, they don't produce.

[Greg Ip]

They don't generate capital income for others.

[Kai Rysdal]

And so that just has a direct.

[Greg Ip]

Impact on aggregate gdp.

[Kai Rysdal]

Fewer immigrants in the labor force could also mean higher prices, especially for industries that disproportionately employ undocumented workers. Economist Tarek Hassan at Boston University says part of the reason the Fed was able to tamp down inflation over the past two years was because of an influx of foreign born workers. If you remove migrants from a local economy, you're going to raise prices in.

[Greg Ip]

The local economy for everything from produce in the supermarket to uber rides.

[Kai Rysdal]

Whether removing undocumented immigrants also raises wages for low skilled workers is a matter of economic debate. Most economists left and right of center will tell you the impact is relatively small. But Duncan Braid at the pro Trump think tank American Compass says less immigration will make some industries more efficient. I think as we've seen in the.

[Greg Ip]

Agricultural sector, sort of the access to.

[Kai Rysdal]

An unending stream of low wage workers has sort of hindered the impetus for.

[Greg Ip]

Those firms to automate.

[Kai Rysdal]

According to a recent Gallup poll, about 55% of U.S. adults want less immigration, legal or illegal. I'm Matt Levin for Marketplace.

[Kyle Rysdal]

The simple fact of the matter, keeping with the labor market angle that Matt was just telling us about, the fact of the matter is that there just aren't enough workers in this country to do what has got to get done. That's a challenge for businesses, of course, but it's a problem for the whole economy as well. As Marketplace's Mitchell Hartman explains, I meet.

[Kai Rysdal]

Steven Sassa with construction company Green Gables Design and Restoration supervising a small construction crew in downtown Portland, Oregon. Sassa and two journeyman carpenters are rebuilding pandemic era sidewalk dining patios to meet new city codes. These guys are probably making 40 or $50 an hour. They're also getting full medical benefits. Still, he says, it can be difficult to keep workers in these jobs. We pretty much just work in the wintertime, all winter long outside, just dig, dig and get muddy. That kind of work's not for everyone. Another reason it's hard to fill these jobs, a shortage of skilled workers, from pipe fitters to project managers. If we haven't been able to train somebody for the position and somebody leaves, I mean, that creates a huge problem at Associated General Contractors of America, VP for Workforce Brian Turmele says while the overall job market may be slowing down.

[Kyle Rysdal]

We haven't heard any of our members telling us that it's getting easier to find qualified workers to hire.

[Kai Rysdal]

Demand for workers is high with the surge in federal funding for infrastructure, semiconductor and EV production. But Termail says the sector's also beset by generational deficits. Baby boomers are retiring and there have been decades of educational disinvestment.

[Kyle Rysdal]

80% of what the federal government spends, it spends encouraging and supporting people to get a four year college degree and only 20% goes to what we call career and technical education, workforce training and development.

[Kai Rysdal]

Part of the problem in construction and manufacturing is the image of these careers, says Michael Gritton at workforce development agency Kentuckiana Works.

[Kyle Rysdal]

They had been laying people off for 20 years in places like Louisville. The parents of those kids were saying don't go into manufacturing because the jobs aren't going to be steady. There's a lot of uncertainty.

[Kai Rysdal]

Kentuckiana Works partners with local employers trying to build a skilled worker pipeline, including GE Appliances, which employs 6,000 workers in Louisville, double the number it had seven years ago. Senior manager Katina Whitlock says the company runs programs in local high schools. We built a mock assembly line where students learn hands on experiences from our production employees. Seniors can work part time in the factory, then get a full time union job after graduation, starting at $17 an hour. GE also works with Louisville's immigrant communities. There are 80 languages spoken in the plant, from Spanish to Swahili.

[Heather Long]

We had hired multilingual talent recruiters.

[Kai Rysdal]

We have shifts where we actually speak the first language of those employees. The challenge starts with helping young people navigate blue collar career paths to understand what they pay and how to get, says management professor Peter Capelli at the Wharton School.

[Kyle Rysdal]

I did look into this for one.

[Greg Ip]

Of my kids who was interested in.

[Kyle Rysdal]

Becoming a welder and it was virtually.

[Greg Ip]

Impossible to help him figure out how.

[Kai Rysdal]

To do it, capelli says. Many high schools don't offer vocational education anymore. Union apprenticeships are few and far between and community college programs can be expensive and teach a lot of stuff workers in the skilled trades don't need. I'm Mitchell Hartman for Marketplace.

[Kyle Rysdal]

This final note on the way out today. It's an observation really about partisanship in this economy. We did a whole series of public opinion polls about six or eight years ago. Key economic issues. People were worried about their personal financial situations, that kind of thing. One of the questions we asked in 2016 and again in 2018 was whether people trusted government economic data. In 2016, Clinton voters trusted the data basically 2 to 1 over Trump voters. In 2018 that flipped almost on its head. Supporters of by then President Trump decided government data was fine after all. Democratic voters less so. Draw your own conclusions obviously, but that's not great. Our media production team includes Brian Allison, Jake Cherry, Justin Dueler, Drew Josnat, Gary O'Keefe, Charlton Thorpe, Juan Carlo Strado and Becca Weinman. Jeff Peters is the manager of media production and I'm Kai Rysdal. We will see you tomorrow. Everybody. This is 8pm.

[Kai Rysdal]

Looking for toys that'll get the biggest reactions?

[Kyle Rysdal]

Yes please.

[Kai Rysdal]

Walmart has jaw dropping toys. Like for real. Daisy Yoga, Ghost, awesome Razor Crazy Cart Shuffle, Whoa, Hot Wheels, Bluey, three in one, airplane playset and more. Aren't you gonna say cool? I'm saving it for the holidays. Smart. Welcome to your Walmart.