Friday, July 15, 2005

Well written two part piece on social dynamics in America.

Note the difference in tone and perspective compared with the Fortune piece posted earlier.


Centrifugal forces

2,573 words
16 July 2005
The Economist
(c) The Economist Newspaper Limited, London 2005. All rights reserved

Centrifugal forces

Americans are still restless in the midst of plenty

“IN THE second century of the Christian era,” Edward Gibbon began his “Decline and Fall of the Roman Empire”, “the empire of Rome comprehended the fairest part of the earth and the most civilised portion of mankind.” America could lay claim to a modern equivalent. At the start of the 21st century, the empire of the United States has created the most open and dynamic society in the world.

One indicator of social dynamism is population growth. In the 20th century, America's population increased by 250%, whereas France's and Britain's rose by less than 60%. In the past ten years, the number of Americans has risen from 263m to almost 300m, the fastest growth for 40 years. America's population is rising more than twice as fast as the European Union's, and two-thirds of that growth comes from natural increase, whereas almost all the modest rise in the EU's population recently has come from immigration.

America's population is dynamic in comparison not only with Europe but also with some of the fastest-growing developing countries. Its fertility rate is higher not only than China's (because of that country's one-child policy), but Brazil's and South Korea's too. By 2050, America's median age (the point at which half the population is older, half younger) will be less than six years higher than its 2000 level of 35 (see chart 1). China will have aged by 15 years to about 45, and South Korea by a withering 22 years, to 54.

America is the only country to have maintained industrial-era patterns of demographic growth in a post-industrial age. Except for the Arab world and a handful of middle-income Latin American countries, all the countries with fertility rates higher than America's are very poor. If a willingness to reproduce is a measure of a rich country's confidence in the future, then America is supremely self-confident.

That trait seems to be hard-wired into the American character. “The greatest asset of the American, so often ridiculed by Europeans, is his belief in progress,” wrote a Swede, Victor Vinde, in 1945. Today, two-thirds of Americans think they will achieve the American Dream of self-improvement at some point in their lifetime. This year, Americans will spend almost $700m on self-help books. “The Purpose-Driven Life”, a 40-day religious course of self-improvement, has sold 25m copies, more than any other non-fiction book except the Bible.

Americans work harder than almost anyone else—300 hours a year more than Europeans. They switch jobs more often—about once every seven years, compared with once every 11 years in Germany and Japan. Except in traffic, the country has developed a cult of speed—fast food, fast banking (“It's your money,” runs one financial advertisement, “get to it faster”), fast everything. Many of the country's founding myths are variations on the Odyssey—wagon trails to the west, the Lewis and Clark expedition, Huckleberry Finn.

America's unemployment rate, at around 5%, is roughly half that in Germany, France and Italy. Its rate of home ownership has risen to almost 70%, higher than ever before. By encouraging flexible labour markets and deep mortgage markets, America has reinforced the cycle of population growth, economic success and demographic dynamism.

A dynamic society also means an open one: open to trade and immigration. National-security hawks dream about limiting such openness, and during the 2004 election campaign America briefly agonised about outsourcing. But by any normal measure, the country remains extraordinarily open. Trade barriers are low. Since 1990 exports and imports have risen as a share of GDP, and over the same period nearly 14m new immigrants have entered America legally. Not all the effects of this openness are beneficial, but America's ability to absorb newcomers has been the envy of other countries.

A dynamic American society has always meant a well-educated and technologically advanced one. True, there are deep-seated problems in secondary education: in an international study, American 10-year-olds came 12th out of 25 countries in mathematics and sixth in science. But the quality and quantity of intellectual life in America is still the highest in the world. A quarter of American adults have a university education. The country produces one-third of the world's scientific papers, employs two-thirds of the world's Nobel-prize winners, has 17 of the top 20 universities (as ranked by Shanghai's Jiao Tong University) and has more ideas-based workers than anyone else.

A mobile society

Yet what really matters is not just growth per se, but where it happens and what impact it has. The country's size and wealth, combined with its meritocratic traditions and technological prowess, have made it unusually easy for Americans to move around in search of new opportunities. “In the United States,” wrote Alexis de Tocqueville, “a man builds a house in which to spend his old age, and he sells it before the roof is on; he plants a garden and lets it just as the trees are coming into bearing...he embraces a profession and gives it up; he settles a place and soon afterwards leaves to carry his changeable longings elsewhere.” In some ways, this restlessness in the midst of plenty is America's most remarkable feature.

This year, around 40m Americans—one in seven—will move house, the equivalent of the entire population of Spain. Between 1995 and 2000, almost half of all Americans have changed address, more (often far more) than in any European country. With home-ownership rates so high in America, you might have expected less mobility, and indeed it has declined compared with the 1960s, when about a fifth of the population moved every year.

But America is not settling down. On the one hand, the young, restless and rich move around as much as ever; on the other, a stable, older and less well-off America is sitting tight, bringing down average mobility. Different groups live in different areas and different kinds of places, and face diverging futures.

The young move house most often: in 2003, 30% of people in their 20s did, compared with under 5% of the over-60s. Movers also tend to be better educated: almost half of all university graduates moved at some point between 1995 and 2000, and so did a remarkable four-fifths of 25-34-year-old college graduates. According to Bill Frey, a demographer at the University of Michigan, America is producing a footloose generation of the best-educated.

Overall, the most common reason for moving is to get a better house. But for one group of Americans, the main reason for moving is work. The people in this group are also the most likely to move from state to state, not just across the road. For them, there has been no decline in mobility since the 1950s. During the 1990s, 73m Americans—more than two Californias—moved from one state to another.

It seems, then, that a lot of well-educated, risk-taking Americans are moving constantly in search of the Next Big Thing. Richard Slotkin, a historian of the frontier, points out that this has happened before. The west was settled not by a representative sample of the nation, but by particular groups: the young; individual ethnic groups; and children of earlier pioneers. But the west was not just a place, it was also a particular kind of economy, in which those who worked hardest could double or treble their fortunes. The current movement of the educated young is a high-tech version of the frontier spirit.

America is also sorting itself out by place, into fast- and slow-growing cities. The pace of change is extraordinary. In the past 25 years, Las Vegas has increased in population by 250% and Austin by 140%. Twenty-two metropolitan regions, almost all in the sunbelt, have more than doubled in size. These fast-growing places are demographically distinctive. Between now and 2030, America's median age will rise by just over three years, but in Colorado and North Carolina—migration magnets in the sunbelt—the median age will rise by only about one and a half years.

On the other hand, 30 metropolitan regions have seen their population fall since 1990, many of them in the Ohio valley. In the worst hit, Weirton, a steel town in West Virginia, the population has dropped by over 10%. Pittsburgh and Buffalo suffered population losses of about 3%. And whereas fast-growing states are “younging”, these laggards will see their median age rise fast to 2030.

Just as America is separating by region, so it is dividing up by types of place. The fastest-growing bits of the country over the past five years have been new suburban areas on the far edge of big cities, such as Riverside and San Bernardino Counties in southern California. The big losers from domestic migration were Los Angeles, New York and Chicago, which all saw an outflow of around 400,000 people. Cook County, which contains downtown Chicago, was the second-largest loser of domestic population. Will County, on Chicago's southern outskirts, was the sixth-largest gainer. As ambitious young married couples everywhere flee urban problems of bad schools and snarled traffic, America has become the first society in the world to classify more than half its population as suburban.

But what does all this sorting out add up to? Is it just a zero-sum game in which people shift from one place to another, with some winning and some losing, but leaving the nation as a whole no better off? Does it erode social bonds, leaving America worse off? Or does mobility itself produce benefits that are greater than the sum of their parts?

Moving must be good for the movers themselves, otherwise they would not bother. They are shifting from the downtowns and inner suburbs to new suburbs and exurbs in order to achieve a 21st-century version of the American Dream. Instead of the ranch house, the Chevrolet and the colour television of old, they want—and are getting—a McMansion, a Lexus SUV and high-speed internet access.

Mobility is good for the new suburbs, too. Formerly synonymous with stultifying boredom, conformity and white bread, they have become the most vibrant parts of the American economy. In the 1990s, three-quarters of all new office space was built in suburbs, and job growth there was three times higher than in the downtowns. Suburbia saw the birth and growth of Microsoft, Cisco, Dell and most of America's other high-tech giants.

Those gains might not have been possible but for the way that migration is shifting the best and the brightest to the places where the new jobs are being created. Traditionally, the best-educated areas were in the north-east, especially Boston, where more than one-third of the residents have college degrees. But in 1995-2000, the places that saw the largest absolute increase in the number of people with college degrees were Atlanta, the unofficial capital of the new South, and Phoenix, which 25 years ago was only one generation away from being a cattle town. At least these are diversified economic hubs. But Las Vegas too, home of Liberace and Celine Dion, saw its graduate population rise by over 20% in the late 1990s, proportionately the largest brain gain of any city.

There are also signs that the dynamism of fast-growing areas feeds off itself. Nevada, the state with the largest number of people who have moved from somewhere else (29% in 1995-2000), also has the highest proportion of people moving house (59% in that period). In contrast, Pennsylvania, with almost 80% of residents born in the state, has the second-lowest rate of moving house. If mobility brings benefits, then its self-reinforcing quality produces benefits squared. America is not just mobile. It is a perpetual-motion machine.

The corollary of educational upgrading in new areas is educational loss in old industrial centres. Black inner cities have been especially hard hit by the sudden flight of the best-educated African-Americans, who since desegregation have had a choice about where they lived. Overall, the populations of cities in the north-east declined in the 1990s, whereas in the west they increased by 20%; cities with a lot of manufacturing grew much more slowly than average.

Flavour of the year

The wider worry is that America's great sorting-out could damage the country by producing a stratified land of haves and have-nots, and creating more class divisions (of which more later in this survey). Yet there is also plenty to counter the forces of separation. America's successful areas are not set in stone. In the 1960s, the new frontiers were California, Texas and Florida. In the 1980s and 1990s, they were Nevada, Arizona and Colorado. Now they have shifted yet again. Some of the fastest-growing counties of the past five years have been in the snowbelt: Kendall County, near Chicago; Lincoln County, South Dakota; Delaware County in central Ohio; and Scott County, south of Minneapolis. Within the sunbelt, people are moving from congested coastal hubs to smaller towns in the interior south and west. Miami is out, Orlando is in. Riverside is taking up where Los Angeles left off.

Nothing exemplifies the diffusion of the haves better than the spread of gated communities. Decried when they first appeared as elitist retreats, gated communities are now spreading to the middle class. According to a census bureau report in 2003, about 7m American households (over 6% of the total) live behind walls and fences, but for new houses in California the proportion is 40%.

Next, there has been a marked increase in ethnic minorities in new suburbs. They now make up more than one-quarter of the suburban population, compared with less than one-fifth in 1990. If you drive around the San Fernando Valley (“The Valley”, supposedly the great white sprawl of Los Angeles), you will see Ethiopian, Thai and Korean restaurants, Mexican and Salvadorean grocery stores, Chinese lawyers and an Armenian cultural centre, all in the space of one block. Nationwide, roughly half of all Asians and Latinos and two-fifths of blacks live in suburbs.

Or consider one of the great hidden stories of the past few years: the return of blacks to the South. For decades, southern labourers sought more money and less prejudice in industrial cities. In the late 1960s, black populations dropped most steeply in places such as Birmingham and Mobile in Alabama or New Orleans, Lafayette and Shreveport in Louisiana. Some of the largest gainers were Los Angeles, Detroit, Chicago, San Francisco and New York. Yet in 1995-2000, those were the five cities that lost the largest number of blacks. Conversely, Atlanta gained 114,000 African-Americans, followed by Dallas, Charlotte and Orlando. This is helping to erode racial segregation. An index developed by Edward Glaeser and Jacob Vigdor, two economists, shows that in the medium-sized metro areas of the South, segregation has dropped.

But perhaps the most important factor in making Americans less separate is immigration, the subject of the next article.


The Americano dream

1,559 words
16 July 2005
The Economist
(c) The Economist Newspaper Limited, London 2005. All rights reserved

The Americano dream

If domestic mobility is a centrifuge, immigration is a melting pot

AMERICA is going through one of its periodic bursts of high immigration. According to the Census Bureau, the country is home to about 34m people born abroad, half as many again as ten years ago. It is also going through one of its periodic panics about the subject.

Self-styled “minutemen” search for illegal immigrants on the border between Mexico and Arizona. Hospitals say they are being bankrupted by the cost of treating illegal aliens. The Republican Party is riven between those who want to crack down on illegal immigration and those who want to regularise it.

The critics fear that the Hispanic wave—especially that part rolling in from Mexico, which accounts for about two-thirds of the total—is in danger of creating two nations: the existing one (which Robert Levine, in the Public Interest magazine, dubbed the “Anglo-Protestant-African-Catholic-Indian-German-Irish-Jewish-Italian-Slavic-Asian society”), and a Spanish-speaking sub-group. The new wave is unusually big, say the worriers; it is growing unusually fast, is unusually cohesive (everyone speaks Spanish) and, unlike previous waves of immigrants, it is fed by a country next door that is continually refreshing the cultural differences between Hispanic immigrants and the rest of the country. As Samuel Huntington expressed it in his book, “Who are We?”, published last year, “Mexican immigration is leading towards the demographic reconquista of areas Americans took from is also blurring the border between Mexico and America, introducing a very different culture.”

If true, this would obviously be a big problem in its own right. It would also reinforce centrifugal trends that are already present in American society. But this section will argue that such fears are much exaggerated. There are problems, to be sure, though these mostly concern America's immigration policy and illegal immigrants. But legal immigrants are neither as numerous nor as culturally different as the pessimists fear. And, far from exacerbating the centrifugal forces in America, immigrants are helping to counteract them.

Some 34m Americans, around 11% of the population, were born abroad. That sounds a lot. But in 1890, a time of mass immigration of Italians, Irish and Jews, that proportion was 15%. At one point, the Irish alone made up 10% of the population.

By far the largest immigrant group now consists of Hispanics. They accounted for around half of America's total population increase between 2000 and 2004, more than in the 1990s. Half the Hispanics are under 27. The Census Bureau forecasts that by 2050 the Hispanic population will have increased by 200%, the population as a whole by 50% and whites by only 30%. At that point, Hispanics will make up just under a quarter of the population, and Mexicans about one-sixth.

That would indeed be a huge share for a single immigrant nation. But by 2050, the descendants of the first Mexican immigrants will be into the fourth or fifth generation. The question is whether by then they will still be a strongly distinctive group. The signs are that, following in the paths of their Irish and Italian predecessors, they will have become assimilated.

Before that, though, stop to consider some of the effects that the immigrants are already having. New arrivals tend to head for New York, Los Angeles, San Francisco, Chicago, Miami and other cities. Over half the immigrants first settle in one of these gateways, and two-thirds of the foreign-born population live in states surrounding them. This is not surprising. The gateways contain networks of people, companies and churches that make newcomers feel at home. The law reinforces this clustering, because family reunification is a common means of legal entry.

As it happens, these preferences are extremely fortunate for America as a whole, because the melting pots are precisely the places that domestic migrants have been leaving in droves. Those five traditional entry points, plus Philadelphia, were the half-dozen cities with the largest net losses of white population during the 1990s.

A never-ending supply

As the previous section has pointed out, departing domestic migrants tend to be younger, hard-working families. New immigrants are also typically younger, hard-working people with families. They help to make up for the domestic outflow (the big difference is that they are far less well-educated). In other words, they save America's great cities from ageing rapidly.

But although Hispanic immigrants arrive at the same points of entry as their Irish and Italian predecessors, they soon spread to the rest of the country. Hispanic and Asian families crop up in the most unlikely places: Indian computer programmers in Plano or Austin, Mexican farm workers in the Dakotas, Asian entrepreneurs in Las Vegas.

The cities that have seen the fastest growth in Hispanics lately are not the traditional magnets of Los Angeles and New York, but smaller cities of the New South—places such as Greensboro, Raleigh and Charlotte, North Carolina. In all of those, the Hispanic population rose by around 600% during the 1990s. The top attractions for Asians are no longer San Francisco and Los Angeles but Atlanta and Las Vegas. That is one reason why America's growing towns and new suburbs are more racially integrated than its old cities.

This immigrant diffusion piggybacks on domestic migration and is essential to the boom in America's fastest-growing areas. Without it, cities that have attracted lots of well-educated domestic migrants would have seized up, becoming top-heavy with university graduates. Arguably, that is happening in San Francisco. But in many boomtowns, Latinos have poured in to take up the basic jobs in construction, food and distribution that cities need to back up their growth. The cities of the inland South and west are wealthy because white Americans are pouring into them. But they keep growing because immigrants are tagging along in the domestic migrants' wake.

This dispersal is allaying the main fear of immigration's critics: that Hispanics will cluster in giant ghettos without interacting with the rest of America. It is true that illegal immigrants are often trapped in a semi-criminalised shadow economy, unable to move up or out. But for the legal sort, the signs of mobility and assimilation are everywhere—not assimilation as in becoming the same as everyone else, but assimilation as in becoming citizens, taking part in politics, enlisting in the army, paying taxes and speaking English.

America seems in no danger of becoming a society divided by language. In 2002, a survey by the Pew Hispanic Centre and the Kaiser Family Foundation found that over 90% of second-generation Hispanics were either bilingual or mainly English-speaking, split equally between the two. In the third generation, more than three-quarters were mainly English-speaking. In the same year, a market-research company, Cultural Access, found that young Latinos watched twice as much English-language as Spanish-language television.

Like their predecessors, Hispanics are busy bettering themselves. First-generation Mexican immmigrant men in their late 40s have had six fewer years of full-time education than their white American-born peers. Their sons are only one year short. That is still regrettable. A mere 10% of Hispanics have university degrees, and the high-school drop-out rate among Hispanic immigrants is worryingly high. Over 40% of 16- to 24-year-old immigrants lack a high-school diploma. But among the children of Hispanic immigrants, the drop-out rate is much lower.

Politically, Hispanics are moving into the mainstream at about the same rate as the Italians or Irish did in the 20th century. This year, Antonio Villaraigosa became mayor of Los Angeles, America's second-largest city, the first Hispanic to hold that job. In 2004, two Hispanics became senators, Mel Martinez in Florida and Ken Salazar in Colorado; 25 congressmen have Hispanic backgrounds. This might be a problem if Hispanic politicians had separatist agendas, such as demanding obligatory Spanish-language teaching in schools. But they do not. Naturally there are specific Hispanic concerns, as there are for all ethnic groups in America (for example, how to deal with illegal immigrants). But Hispanic politics is diverse, and its spectrum is similar to that of the country as a whole. It ranges from the Texan conservatism of the attorney-general, Alberto Gonzales, to the Californian liberalism of Mr Villaraigosa.

Lastly, there is evidence that new immigrants, Hispanics especially, are joining the rest of the American people in the most direct possible way: by marrying them. Almost a third of all marriages involving a Hispanic or Asian partner cross racial lines (counting Hispanics as a race for this purpose). By most standards, American rates of mixed-race marriage have been low: one in 23 marriages in 1990, up to one in 15 in 2000. Latinos seem to be leading the way in breaking down that barrier. Nearly half of all the 3.7m inter-racial marriages in the country have one Hispanic partner. In states with a lot of Hispanic immigration, the rate is surprisingly high: 14% in California and Nevada, around 11% in Washington state, Colorado and Arizona. At this rate, intermarriage will soon stop being exotic and become mainstream. It is another way of stirring the melting pot.


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