Mediaboss Marketing

Vic Kolenc, El Paso Times Published 11:31 a.m. MT Oct. 3, 2018 | Updated 12:06 p.m. MT Oct. 3, 2018

Rob Kaplan, CEO of the Dallas Fed, talked about the limitations of the U.S. unemployment measurement in discussing full employment. Vic Kolenc, El Paso Times

Rob Kaplan, CEO of the Federal Reserve Bank of Dallas, answers a question posed by Mary Kipp, left, El Paso Electric CEO and member of the Dallas Fed board of directors.(Photo: VIC KOLENC/EL PASO TIMES)Buy Photo

Immigration reformis neededto growthe nation's economy in the future andinvigoratean aging national workforce, the head of the Federal Reserve Bank of Dallas told El Paso community leaders at a luncheon.

"If you think you'regoing to cut the number of immigrants substantially and grow GDP (gross domestic product, or economic growth),those two things do not go together. We need to grow the workforce if were going to grow GDP," Rob Kaplan, chief executive officer of the Dallas Fed told a packed Community Foundation Room in Downtown El Paso on Tuesday.

More:Construction of Trump border wall to begin Saturday in El Paso, Border Patrol announces

"While Texas is growing its workforce and population, the rest of the country is not," Kaplan said.

"The participation rate the percentage of 16- to 64-year-oldsthat are in the (nation's) labor force has declined since 2007, and we believe this is due to aging demographics."

Growing the workforce is a key to future economic growth, Kaplan said. That can be doneby getting more blacks, Hispanics, women, and former prisoners back into the workforce, and by reforming federal immigration policies, he said.

Kaplan made his remarks during a question and answer session withMary Kipp, El Paso Electric chief executive officerand a member of the Dallas Fed's board of directors. The session was part of a community luncheon held Oct. 2by the Dallas Fed's El Paso branch.

TRUMP USMCA(Photo: WHITE HOUSE)

The U.S. economy is expected to grow at about a 3 percent rate this year, but decreaseto a growth rate of about 2.5 percent in 2019, and slowfurtherin 2020, Kaplan said.

"We have been advocates,the Dallas Fed, ... to redo our immigration policies and have it be more skill-based and employer-based, much more like Canada," Kaplan said.

In a question and answer session with news reporters after his luncheon session, Kaplansaidhis immigration-growth stance is not counter to the Trump administration's immigration policies. Those are aimed at reducing undocumented immigrants and gettinga merit-based immigration system.

It's likely "immigration (reform) will be at leastpart of the puzzle in terms of improving workforcegrowth," he said.

The Texas economy is outperforming the national economy, and is expected to continue to do so in large part because of the state's continued growing population, and growing workforce, Kaplan said.

Projections show the Texas population, now at 28 million, could grow to near40 million in 16 to 24 years, he said.

El Paso has more of a challenge of benefitingfrom the state's population growth because El Paso has not been the destination that Austin, San Antonio, Houston, and Dallas have been, Kaplan said after his luncheon talk.

However, he said, a growing state population "can only havepositive spillover effects toEl Paso," he said.

More:El Paso economic growth to slow in 2018, UTEP forecasts

Another key to growing both the United States and Texas economies in the futureis to improve workers' education levels and job skills, he said. And that has to start with better education programs in children's early years, he said.

The United States has 46 million people with a high school education or less, he said.

"Ifyou'reone of the 46 millionthat dont (have a college diploma), your job is likely to getrestructuredor eventually eliminated. And unless you go get retrained, which is a lot easier to say and a lot harder to do,you'regoing to find another job in a strong job market, but youre going to see your income and productivity (go way down), and thats ... one reason productivitygrowth is sluggish," he said.

Kaplan said after his talk that he supports a smallincreasein the federal funds interest ratein December and possibly two more modest increases in 2019 until what he termed a "neutral stance" is reached with a rate around 2.5 to 2.75 percent.

The Fed last week raised the federal funds rate the rate banks charge each other for overnight loans by a quarter point to a range of 2 percent to 2.25 percent. That rate affects interest rates charged for credit cards, home mortgages, and other types of loans.

The Fedheld the rate near zero for years after the Great Recessionof 2007-09 and then has nudged it up gradually as the national economy has improved.

More:NAFTA deal means business as usual on the border, El Paso leaders say

Rob Kaplan, CEO of the Federal Reserve Bank of Dallas, discusses the newly approved replacement for NAFTA the USMCA. El Paso Times

Kaplanalso said that having the revised North American Free Trade Agreement, now called theUnited States-Mexico-Canada Agreement, or USMCA, completed takes away uncertainty that had "some chilliing effect on CEOs to spend on expansion."

On Sunday night, Canada agreed to join the United States and Mexico in a trade deal that will replace NAFTA, U.S. and Canadian officials said Sunday night.The last-minutedeal would provide the U.S. with greater access to Canadas dairy market, an issue that had been considered vital for U.S. dairy manufacturers.

The agreement with Canada came about a month after the U.S. and Mexico announced that they had reached a new trade pact to replace NAFTA.

The agreement still has to be approved by the legislative bodies of the three countries.

Vic Kolenc may be reached at 546-6421;vkolenc@elpasotimes.com;@vickolencon Twitter.

Read or Share this story: https://www.elpasotimes.com/story/news/2018/10/03/immigration-reform-needed-economic-growth-dallas-fed-ceo-el-paso-texas/1501814002/

View post:
Immigration reform key to future economic growth, Dallas Fed ...