Apple iPad, Soon Made in Vietnam

♠ Posted by Emmanuel in , at 6/01/2022 01:44:00 PM

 China's epic recurring COVID-19 shutdowns have frustrated multinational corporations aiming for predictability in their supply chains. Sure, China still benefits from having globally-renowned tech clusters. However, having your production capabilities curtailed again and again due to a handful of (relatively mild) COVID-19 cases doesn't encourage foreign firms, as you would expect.

Not so long ago, I covered Vietnam's emergence as a major assembly hub for South Korea's Samsung [1, 2]. In the years since, it's developed a reputation as a reliable production center for MNCs. It was perhaps inevitable that Apple, frustrated like many others with the PRC's lockdown shenanigans, would look to set up shop elsewhere. Voila! Apple is coming to Vietnam:

For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions, Nikkei Asia has learned.

The U.S. company has also asked multiple component suppliers to build up their inventories to guard against future shortages and supply snags, sources said.

China's BYD, one of the leading iPad assemblers, has helped Apple build production lines in Vietnam and could soon start to produce a small number of the iconic tablets there, people with knowledge of the matter said.

To be sure, Apple already makes its wireless earphones in Vietnam. It makes business sense: experiment first with some components, and then shift further assembly work if things go well:

The iPad will become the second major line of Apple products made in the Southeast Asian country, following the AirPods earbud series. The move highlights not only Apple's continuous efforts to diversify its supply chain but also the growing importance of Vietnam to the company.

Also keep in mind that Vietnam is still mostly an assembly hub--stick socket A into socket B sort of mundane work. Many of the components for the "Vietnam-made" iPad will still come from, you guessed it, China. Hence, Apple wants to bolster supplier capabilities in parts of China that have a lower likelihood of being shut down based on the historical record:

To further guard against supply chain disruptions, Apple has also asked suppliers to build up additional supplies of components such as printed circuit boards and mechanical and electronics parts, especially those made in and around Shanghai, where COVID-related restrictions led to shortages and logistic delays. In addition, the company has asked suppliers to move quickly to secure supplies of some chips, especially power-related ones, for the upcoming iPhones.

In particular, Apple is asking suppliers outside of the lockdown-affected areas to help build up a couple of months' worth of component supplies to ensure supply continuity over the next few months. The requests apply to all of Apple's product lines -- iPhones, iPads, AirPods and MacBooks -- sources said.

The next step in Vietnam's development is therefore obvious: to move from assembly to manufacturing components as well following in China's footsteps before it became lockdown land.

Supply Chain Woes: Hainanese Chicken Rice

♠ Posted by Emmanuel in ,, at 6/01/2022 01:02:00 PM

I've been watching Channel News Asia as of late, and a news item that struck me was the Malaysian ban on chicken exports starting this June. It's very much a supply chain issue: as the price (and hence availability) of chicken feed--comprised of grains and soybeans--has increased significantly, Malaysian chicken production has been reduced. Understandably, Malaysia is keen on having sufficient food for its populace before exporting it in this day and age of inflation and shortages. Unfortunately, neighboring Singapore has been negatively affected by Malaysia's impending chicken export ban. 

Hainanese chicken rice is Singapore's signature dish--a staple food in that wealthy Asian nation. Having little domestic chicken production, Singapore is reliant on imports from countries like Malaysia. Given its limited sources, Singaporeans now have to cope with this shortage. Let's begin with constraints on the supply end in Malaysia: 

Malaysia, itself facing soaring prices, has decided to halt chicken exports until local production and costs stabilise. Prices have been capped since February at 8.90 ringgit ($2.03) per bird and a subsidy of 729.43 million ringgit ($166 million) has been set aside for poultry farmers.

Chicken feed typically consists of grain and soybean, which Malaysia imports. But the government is having to consider alternatives amid a global feed shortage. Lower quality feed means the birds are not growing as fast as usual, slowing down the entire supply chain, said poultry farmer Syaizul Abdullah Syamil Zulkaffly.

In turn, Singaporean food stalls have been feeling the pinch. To be sure, there are other sources of chicken such as Brazil. The problem, however, is that Brazil is much farther away than nearby Malaysia, necessitating freezing of chickens to the detriment of freshness and taste:

Singapore, although among the wealthiest countries in Asia, has a heavily urbanised land area of just 730 square km (280 square miles) and relies largely on imported food, energy and other goods. Nearly all of its chicken is imported: 34% from Malaysia, 49% from Brazil and 12% from the United States, according to data from Singapore Food Agency (SFA).

A plate of simple poached chicken and white rice cooked in broth served with a side of greens is a dish beloved by the country's 5.5 million people, and is usually widely available for about S$4 ($2.92) at eateries known as hawker centres.

Singapore being a wealthy country with more refined tastes, some restaurateurs would rather serve something else rather than frozen Brazilian chicken:

Some vendors have said they will stop selling chicken altogether and instead find alternative dishes – bad news for fans of Singapore’s much-loved dish of poached chicken, served with rice cooked in stock, and chilli dip.

The owner of the popular eatery Tian Tian Hainanese Chicken Rice told the Singaporean outlet The Straits Times that it would stop serving chicken dishes if it could not get fresh supplies. Its founder, Foo Kui Lian, said they would instead “bring back dishes like fried tofu, fried pork chop and prawn salad, but we will not use frozen chicken”.

The Singapore Food Agency has encouraged the public to use frozen chicken, which is imported from countries such as Brazil, or to try alternative meat or fish, and to refrain from buying more than they need.

Singapore's situation has been likened to McDonalds without burgers, but the analogy is not quite correct in that they do have chicken--albeit of the frozen variety. Still, it's another timely illustration of food shortages you encounter nowadays due to supply chain disruptions occurring worldwide.

Biden's 'FTA-Less' IPEF Asia-Pacific Deal

♠ Posted by Emmanuel in , at 5/28/2022 12:31:00 PM

Japan usually goes along with US economic plans... but how about other Asian countries? 
 

Before Trump, the Republican Party represented the pro-trade American political party--especially in contrast to the trade union-dependent Democratic Party. Although Democratic presidents like Clinton and Obama promoted free trade agreements, they relied on Republican support to push FTAs through. After Trump, 'free trade' has become a dirty term in American politics regardless of party. So how is President Biden to shore up America's presence in the Asia-Pacific after his predecessor Barack Obama proposed the Trans-Pacific Partnership subsequently abandoned by Donald Trump? The answer is... do away with 'free trade' altogether.

I am not sure what appeal Biden's Indo-Pacific Economic Framework for Prosperity [IPEF] offers to Asian countries absent the usual tariff reductions. The details of IPEF are still very much to be determined based on consultations with the proposed participants. At best, it could represent useful technical assistance to others about making their economies more connected, resilient, clean, and fair. At worst, it could actually worsen trade access--especially to the vast American market--by imposing developed country environmental and labor standards on developing countries.  

At this stage, all we have to go on are the following bullet points:

  • Connected Economy: On trade, we will engage comprehensively with our partners on a wide range of issues. We will pursue high-standard rules of the road in the digital economy, including standards on cross-border data flows and data localization. We will work with our partners to seize opportunities and address concerns in the digital economy, in order to ensure small and medium sized enterprises can benefit from the region’s rapidly growing e-commerce sector, while addressing issues is such as online privacy and discriminatory and unethical use of Artificial Intelligence. We will also seek strong labor and environment standards and corporate accountability provisions that promote a race to the top for workers through trade [my emphasis].
  • Resilient Economy: We will seek first-of-their-kind supply chain commitments that better anticipate and prevent disruptions in supply chains to create a more resilient economy and guard against price spikes that increase costs for American families. We intend to do this by establishing an early warning system, mapping critical mineral supply chains, improving traceability in key sectors, and coordinating on diversification efforts.
  • Clean Economy: We will seek first-of-their-kind commitments on clean energy, decarbonization, and infrastructure that promote good-paying jobs. We will pursue concrete, high-ambition targets that will accelerate efforts to tackle the climate crisis, including in the areas of renewable energy, carbon removal, energy efficiency standards, and new measures to combat methane emissions. 
  • Fair Economy: We will seek commitments to enact and enforce effective tax, anti-money laundering, and anti-bribery regimes that are in line with our existing multilateral obligations to promote a fair economy. These will include provisions on the exchange of tax information, criminalization of bribery in accordance with UN standards, and effective implementation of beneficial ownership recommendations to strengthen our efforts to crack down on corruption.

Right now, IPEF is still nebulous enough to be vaporware. For others, there is a possibility that IPEF is largely downside (a grab bag of broadly protectionist US priorities) without upside (enhanced market access especially through lower tariffs).

Shein and Faster Fashion's Emergence

♠ Posted by Emmanuel in ,, at 12/21/2021 01:19:00 PM

Much has already been written about the emergence of "fast fashion": clothing retailers that are able to translate trends seen on the world's fashion runways... to a store near you in a matter of weeks. The success stories of Sweden's H&M and Spain's Mango have become the stuff of business legend in upending the fashion industry in recent decades. It was probably only a matter of time that onetime suppliers in China would become the firms at the cutting edge of evolving to customer's whims and desires that move so quickly. 

Younger women should be familiar with China-based online retailer Shein. Reflecting the democratization of fashion brought by the online world, it's not the big fashion houses that set today's trends but rather posts on the likes of Instagram and Pinterest. In keeping with the times, Shein is almost entirely an Internet selling pure play instead of having bricks-and-mortar stores still like H&M or Zara. Rest of the World writes more about this emerging business success story:

Shein eventually expanded to offer apparel for women, men, and children, as well as everything from home goods to pet supplies, but its core business remains selling clothes targeted at women in their teens and 20s — a generation who grew up exploring their personal style on platforms like Instagram and Pinterest. 

Its clothes aren’t intended for Chinese customers, but are destined for export. In May, the company became the most popular shopping app in the U.S. on both Android and iOS, and, the same month, topped the iOS rankings in over 50 other countries. It’s the second most popular fashion website worldwide.

By 2020, Shein’s sales had risen to $10 billion, a 250% jump from the year before, according to Bloomberg. In June, the company accounted for 28% of all fast fashion sales in the U.S. — almost as much as both H&M and Zara combined. The same month, a report circulated that Shein was worth over $47 billion, making it one of the tech industry’s most valuable private startups.

Think of Shein more as an Amazon-a-like instead of comparing it to the established fast fashion names in terms of its business model:

At the heart of these issues is Shein’s aggressive business model. Comparisons to fast-fashion giants like H&M miss the point: it’s more like Amazon, operating a sprawling online marketplace that brings together around 6,000 Chinese clothing factories. It unites them with proprietary internal management software that collects near-instant feedback about which items are hits or misses, allowing Shein to order new inventory virtually on demand. Designs are commissioned through the software; some original, others picked from the factories’ existing products. A polished advertising operation is layered over the top, run from Shein’s head offices in Guangzhou.

Ethical concerns with work conditions in Chinese garment factories aside, Shein's advantage is being able to call on PRC suppliers to shift even more quickly than European fast fashion firms:

For years, European brands like Zara and H&M have embodied fast fashion, shortening the route from runway to storefront from months to weeks. But Shein isn’t chasing runway trends — rather, it often knocks off items seen on TikTok and Instagram, where hype cycles move significantly faster. Whereas Zara typically asks manufacturers to turn around minimum orders of 2,000 items in 30 days, Shein asks for as few as 100 products in as little as 10 days. “They want factories to be much more nimble,” said Lu.

If speed is Shein's competitive advantage, it must adapt to even quicker cycles going forward. Or, will someone even speedier supplant Shein just as it has H&M and Zara (which outran department stores before them)? Something else I thought the article could have shed more light on is how Shein is working around supply chain snags like the US-China trade war, intermittent COVID-19 lockdowns in the PRC, and rising shipping costs.

2021's Miseries: The Great Creatine Shortage

♠ Posted by Emmanuel in , at 11/20/2021 08:56:00 AM

By now, it should be obvious to just about everyone that goods whose availability we once took for granted are in short supply. Blame COVID-19 lockdowns affecting countries where these goods are being produced, a breakdown in air/sea/land transport logistics, and so on. The pre-COVID-19 world was built on distributing manufacturing facilities where things could be made most efficiently, assuming fairly inexpensive shipping even across vast distances. Is that world now gone? We'll have to wait and see if and when the pandemic subsides.

In the meantime, here's another not-quite-amusing example for those encountering these shortages: A few days ago, I noticed that my supplies for the exercise supplement creatine monohydrate were running low. I experienced sticker shock while scanning current selling prices. Briefly, what creatine does is replenish the body's supply of adenosine triphosphate (ATP), which fuels muscle contractions such as while performing resistance training. It turns out that most of creatine's precursors come from (surprise!) China. As many of you are probably aware, China has taken a zero tolerance approach to confronting COVID-19 outbreaks. With production centers and major port cities not immune to these recurrent lockdowns, creatine supplies have taken a hit. Here is a detailed and enlightening discussion of the ongoing creatine shortage from the Natural Products Insider:

Strict export regulations and regional COVID-related limitations are slowing China-originating supply chains for two top sports nutrition energy ingredients, caffeine and creatine. Outside of China, suppliers and manufacturers are clamoring to beef up inventories of these increasingly hard-to-find materials but face steeply rising prices for whatever supply they can secure [...] Similarly, the price of creatine has risen from its consistent $4 per kilo to between $10 and $14/kg.

There is more good detail:

More unique to the sports nutrition industry is creatine, which factors into energy production in the body and is popular with core market users, namely bodybuilders and athletes looking to boost muscle, performance and recovery. “There is a worldwide creatine shortage,” confirmed Jeff Golini, Ph.D., executive scientist for All American Pharmaceutical, who confirmed all the raw material to manufacture creatine comes out of China, meaning this shortage impacts all forms of creatine, from monohydrate to hydrochloride (HCl).

Thus, while suppliers such as AlzChem Trostberg GmBh (Creapure) and All American Pharmaceutical (Kre-Alkalyn) make their ingredients in Germany and Montana, respectively, their starter materials come out of China, placing even these suppliers in the impact zone. What’s behind the shortage is not quite clear and asking different “insiders” results in varying answers, including lots of guesswork and perspectives.

Vitajoy sells both caffeine and creatine, and Crane said as far as he can tell the shortage is related to the pandemic. His sources suggested COVID-related issues in the northern area of China, where most creatine factories reside, caused production facility closures. “I believe that is what might have started the ball rolling,” he reasoned. “From there it was reported that there were some starting material issues and, before you knew it, any availability in creatine was gone.”

Worse yet, the US-China trade conflict seems to be worsening availability: 

Golini attributed the shortage to changing world politics, including the recent U.S. presidential administration transition, and the ongoing global power struggle involving trade. “China now is saying we have a shortage of everything in order to re-control the world market, create demand and raise pricing,” he said. “From creatine to resins to make plastics to pipe to erythritol to you name it.”

“Creatine is $14/kg if you can find it,” Kneller lamented. Crane noted pricing went from around $4 to more than $8/kg in a matter of months. “We feel like we might be seeing some daylight regarding supply in the coming months, but it’s hard to pinpoint exactly when,” he reasoned. Golini sees a longer struggle. “This shortage for creatine—as a matter of fact, there is none [available]—will continue this entire year, and you will see pricing go through the roof,” he warned.

Then there are the aforementioned regional shutdowns for COVID-19 containment--including areas crucial for creatine supply chains. These include Wuhan itself:

Creatine producers appear concentrated in the northeastern province of Hebei, near the Yellow Sea separating China from both Koreas and Japan [...] In January 2021, Chinese officials locked down the city of Shijiazhuang, the capital Hebei, and other areas of the province due to a COVID outbreak. Hebei Hangwang Import and Export Trading Co. Ltd., Sure Chemical Co. Ltd. Shijiazhuang and other creatine producers are located in this city. However, this restriction was lifted March 25, leaving only the city of Wuhan, Hebei, still under a lockdown that was lifted April 7. According to Made in China, several creatine suppliers are located in Wuhan, where COVID was first detected in China.

The bottom line is supply chain disruptions have become more common and rolling over the past several years due, among several reasons, to trade wars and the pandemic. Many supplement companies have grown to accept this fact, take steps to be better prepared and hope situations improve. “We expect global supply chain disruptions to follow COVID,” Titlow summarized. “The better COVID is managed (e.g. vaccines), the better the supply chain.”

There's even an amusing video online about bodybuilders regarding the creatine shortage as a harrowing event of enormous proportions. These are not quite the best of times for global supply chains; that much is clear.

Oil Crisis? Bah. UK’s Fake Tan Shortage

♠ Posted by Emmanuel in at 11/09/2021 03:11:00 AM

There are all sorts of unexpected but fairly amusing shortages occurring worldwide given supply chain snarls that are happening as the world deals with the ongoing pandemic. It seems that spreading out manufacturing and sourcing locations to far-flung areas of the globe makes less sense when logistical hurdles arise due to lockdowns as COVID-19 surges pop up again and again in various key countries.

Take, for instance, ethoxydiglycol. This chemical sourced from places like (surprise!) China are in short supply in Europe. Without it, a lot of formulations for cosmetics cannot function properly. Ever wonder how UK celebrities maintain that year-round glow despite the onset of winter? Well, their beauty secrets may be unraveling real soon unless these supply chain issues are worked out:

The UK could be on the cusp of a cosmetics shortage as prices balloon for a vital chemical used in many eczema creams, fake tans and shampoos. A chemical called ethoxydiglycol has been described as the "unsung hero" of cosmetics. It is part of the formula that improves the way cosmetics are applied to the skin. Without it, many cosmetic products as we know them would be unusable.

Ethoxydiglycol is widely used in cosmetic products because it is soluble in both oil and water-based products, such as propylene glycol, water, vegetable oil and ethanol. The shortage, which is expected to hit UK and European cosmetics manufacturing in the next few weeks, has already seen a near ten-fold price hike. 

While price hikes have become necessary in light of what's happening, they may rise yet further:

Ethoxydiglycol prices have increased from £12.10 ($16.50) to £103 per kg in recent weeks. Many suppliers are now completely out of stock. Minimum order quantities set by many suppliers have also increased from 24kg to 1,000kg. This means that the minimum order to purchase Ethoxydigylcol is £103,000, which will halt production for many smaller businesses who cannot afford to purchase in those quantities.

In keeping with the concept of economies of scale, it's often the little guys who get hurt the most.

Bitcoin's Astounding Environmental Cost

♠ Posted by Emmanuel in at 11/01/2021 03:58:00 PM

 

There's an interesting article in Fortune on the true environmental costs of using Bitcoin as a medium of exchange to replace cash, debit cards, credit cards, and other commonly-used payment methods. Given the enormous amounts of electricity needed for bitcoin mining, it is perhaps no surprise that estimates on the high end find it to be an unsustainable proposition. So much for using Bitcoin for everyday transactions?

The [MoneySuperMarket] report states that each Bitcoin transaction consumes 1,173 kilowatt hours of electricity. That's the volume of energy that could "power the typical American home for six weeks," the authors add. The Bitcoin mining that enables a purchase, sale or transfer, it posits, uses a slug of electricity that costs $176. That number is based on an average worldwide cost per kWh of 9.0 cents over the past 12 months.

What it we lower the estimated price per kilowatt hour to 5.0 cents? Some argue that figure is more in line with global energy costs. I am afraid that does little to make Bitcoin any more sensible as a means to transact given the costs of generating these coins still:

So let's reduce the MoneySuperMarket number from 9 cents per kWh to the 5 cents favored by de Vries. That would put the average cost of producing a coin at around $19,000, which looks reasonable (and underscores the industry's gigantic profitability as price hovers at over three times that level). At 5 cents, the electricity cost per transaction would fall from $176 to roughly $100.

For every transaction you make with Bitcoin, that's what you would be paying in electricity costs. When the likes of Visa and Mastercard can process these sorts of transactions for cents, it puts Bitcoin's true costs into sharp relief. The argument that ever-lower cost locations for mining these coins is a solution has its limits too, with these destinations now discouraging Bitcoin mining as power outages arise as a result.  The global movement of Bitcoin miners eventually becoming persona non grata is a very interesting story in itself, but I digress...

Bitcoin's drawback is that electricity is finite, and what Bitcoin uses, a family or a business can't use. In several nations, Bitcoin mining is imposing severe stress on the grid. Kazakhstan, one of world's leading crypto mining hubs and a top destination for producers displaced by the Chinese lockdown, is suffering blackouts caused by the industry's sudden explosion within its borders. Its government is limiting producers to a fraction of the electricity they're now deploying. Iran has also suffered severe shortages that's led to ejecting producers, and tiny Abkhazia is raiding mines––many of them illegal––to forestall an energy crisis.

The bottom line is that Bitcoin mining in its current form is unsustainable, and so is its use as a medium of exchange. 

Next in the PRC Firing Line: Hermes, Gucci?

♠ Posted by Emmanuel in , at 8/30/2021 04:36:00 PM

Unless you've been hiding under a rock these past few months, headlines about how the PRC is cracking down on its most lucrative companies--Internet-based services, video games, online education, and the rest--have dominated business news. This crackdown is ostensibly in the name of maintaining social order--not letting inequality get out of hand, not getting young people hooked on mindless games, and so forth. This social engineering is most evident in new rules aiming to restrict hours spent by those under 18 on video games to no more than three.

So far, the largest victims of this erstwhile Xi Jinping-organized socialist putsch have been local firms. However, those feared to be next in the firing line are foreign purveyors of luxury goods. Are they next in line in being styled as "enemies of the people"?

Chinese President Xi Jinping has stepped up his call for "common prosperity," sending shudders through luxury goods vendors, which worry that China's rich will not be able to splurge on $3,000 bags.  

The fear was palpable on the stock market last week. Shares of Paris-listed Kering, owner of the Gucci brand, slumped 17%. Switzerland's Richemont, the company behind such names as Cartier and Piaget, sank 14%. LVMH Moet Hennessy Louis Vuitton and Hermes slid 13% and 8%. Makers of high-end cars were hit as well, with Porsche down 10% and Ferrari 6%.

The catalyst was Xi's call for "common prosperity" as part of "high-quality economic development" last week at a meeting of the Chinese Communist Party's Central Committee for Financial and Economic Affairs. The committee called for adjusting "excessive incomes" and redistributing wealth that has become overly concentrated in the hands of a small number of people.

Veteran China commentator George Magnus (ex-UBS) I believe has it right when he says the current crackdown has more to do with the Communist Party maintaining control than any sort of re-commitment to socialist principles. Insofar as the likes of Alibaba and Tencent were gaining more and more of the "mindshare" of the Chinese people, they posed a threat to Communist Party fealty. Hence, they had to be knocked down to size to ensure that no other gods would be placed before the Party.

My belief is that Western luxury brands are not as vulnerable for this reason: while they may symbolize the wrong things like conspicuous consumption, they do not really pose a threat to the control that the Party has on various aspects of Chinese life--political, economic, social or technological. Ironically, it's the domestic tech giants who pose more of those kinds of threats, hence the recent actions.

Is Childbearing Immoral Amid Climate Change?

♠ Posted by Emmanuel in , at 8/12/2021 06:11:00 PM

Be fruitful and multiply during the age of climate change? Think again. 

One of the most fascinating existential questions has been posed on the business news channel CNBC, of all places, as would-be parents consider the wisdom of having children. While there are climate deniers like most of the US Republican Party and other reality-challenged individuals, most reasonable people accept the premise that global temperatures are rising due to human activity. The recent IPCC report leaves us in no doubt that things are getting worse in this regard. Already, we are witnessing severe climate change negatively affecting human life. So, the question is: Does it make sense to have children who will grow up on a degraded planet?

The article is interesting in probing a number of angles on this question, the answer to which will ultimately have significant implications on the future of humanity:

1. What is the carbon footprint of raising a child?

2. How does a warming planet impact fertility rates?

3. Is it ethical to bear children knowing their quality of life will be negatively impacted by worsening climate change?   

As a Catholic educator, the third question is the most interesting one to me. The obvious "Christian" answer would be that we should not presume things will get worse: It is still within the current generation's abilities to limit the future negative effects of climate change on future generations, although that window of opportunity is rapidly closing (see Pope Francis' 2015 encyclical Laudato Si). Given the massive collective action problems we have, though--including a main political party in the world's second-largest carbon emitter the United States denying the very existence of climate change--what are the chances of global citizens clamoring and working towards improvement? As the article suggests, more thoughtful would-be parents are giving these considerations a lot of though provided the almost non-existent progress on arresting warming trends observed around the world. 

There are no easy answers going forward.

Falling Births? US Needs to Actually be Livable

♠ Posted by Emmanuel in , at 6/27/2021 05:07:00 PM

Ever consider that the US birthrate is dropping precipitously since it's a rather s--tty place to live?
 

Like most developed countries, the United States is experiencing cratering birth rates. If the replacement rate is 2.1 birth per woman, its current reported rate of 1.6 is well below that. In other words, depopulation will set in for America just as it has for the likes of Japan and others if births continue to crater and anti-immigrant sentiment scares off would-be migrants. Fewer birth and nobody being welcomed inevitably spells depopulation.

Although the United States likes to portray itself in all sorts of self-aggrandizing ways--the promised land, shining city upon a hill, and all that jazz--the truth is that its livability is rather worse than any number of other places.A Bloomberg interview with demographer Lyman Stone has some interesting things to say on the matter. First, flexible work may not be the solution:

I think policymakers still have this delusion that the path to high fertility is everybody having an awesome job with great benefits allowing them to be “flexible” for their family, but this just isn't reality. As jobs, even “family-friendly” jobs, turn into careers, and careers turn into essentially religious or spiritual vocations, family is deprioritized and birth rates decline. In empirical studies of surveys across nearly 100 countries, a co-author and I found that this effect was actually as strong for men as for women, so this isn't just about breadwinners. The boss in the movie “Elf” is the bad guy because as far as a child is concerned, a parent's work is always the biggest competition for that parent's mental and emotional energy.

Another observation is that Trumpian racists tend to gain favor as birth rates fall, which obviously has ominous portents:

But as birthrates fall, far-right anti-immigration parties tend to do better, not worse. So if a traditional value of being welcoming to immigrants is something important to Americans, again, low fertility is a problem, because it threatens the viability of political coalitions that support an attitude of welcome and hospitality. And of course, in a more literal sense, the absorptive capacity of a society with regard to immigrants is related to population size: 1 million immigrants has a very different social significance to a society with 100,000 births than a society with 1 million or 10 million. 

Completing this downward spiral of falling birth rates mobilizing far-right ultra-racist groups is that low birth rates tends to quash innovation, too: 

Another thing we appear to value is something like, “Having a dynamic economy with lots of innovation and entrepreneurship, without inherited wealth that dominates the economic landscape.” But I've shown in extensive work that low birth rates directly predict less innovation, lower entrepreneurship and a higher salience for inherited wealth.

America with all its problems has too far to go in fixing its broken society. It won't become much more livable anytime soon, so expect its birth rates to continue stagnating.