This is Wall Street Week. I'm David Weston bringing you stories of capitalism this week, the risks and rewards of nuclear energy at a time when we need all the power we can get, plus immigration and economic realities. How a glass factory in Fargo, North Dakota is filling the demand for labor. But we begin with the story about big global problems and about finding the money we need to solve them.
So our aspirations are limitless, driving our work to deliver a better bank because eventually we will need a bigger bank.
That's a Jay Banga, former CEO of MasterCard and current President of the World Bank, speaking in Morocco a year ago, just a few months after taking the top job. But what is a better World Bank and what does a bigger World Bank look like? To answer that, we need to go all the way back to the end of the Second World War.
About eighty years ago, when the Bretonwoods Meeting took place. There was this important emphasis on helping to restructure and recreate the destruction that was done after the World War Two, and there was this emphasis on how do we go forward?
So a number of multilaterals were created then and since then many more have come into existence all over the world, and their job was really to take capital that was generated from governments and turn that into a leverage form of capital to give that out to different entities.
The various institutions have morphed a lot.
So for example, the World Bank was created to help with the reconstruction of Japan and Europe, and now it's been working for many, many years on on helping emerging markets and developing countries, which covers a lot of very different countries with very different economic structures and systems and income levels.
Asni Beschloss is the CEO and founder of Rock Creek and worked at the World Bank, including as treasurer and Chief Investment Officer in the eighties and nineties, she's witnessed firsthand the evolution of the Bank into what it is today.
Obviously, emerging markets cover all the way from China, which is a huge economy, to small countries.
Like Peru or Sierra Alone.
You know, so fasts with very very different economics, populations, education levels, culture, et cetera. So what you mean by development is really bringing education, health, other social sector development needs to these countries, but also helping build their bridges, their dams, their clean energy, infrastructure and communications, and also their financial system, so you know, for example, helping to
develop fintech in Latin America. So it's a very big range of things that the development institutions work with.
Well.
The multilateral banks, which include the World Bank, the African Development Bank, but also the International Monetary Fund, have significant financial capability to address exactly this type of debt crisis in low income economies. In fact, that's basically why they were created was to help reconstruct the world after World War Two and give developing countries a chance to grow their economies so they could become safe and productive trading
partners with the United States and our allies. And so right now we believe that those institutions have to really step up their efforts to provide debt relief, to provide long term, stable and low cost capital for the public sector economies of these countries, and to actually finance the global public goods, including the fight against climate change, in economies that simply have no fiscal space to make those investments on their own.
The World Bank's total disbursements have risen every year since twenty nineteen at a rate outpacing global economic growth, but that doesn't take into account repayments to the bank, and they haven't necessarily kept up with the growing needs of lower and middle income countries. If they're to get to anything as big as a j Banga is hoping for, he says, they'll need to turn to the private market.
The only way this is going to work is by getting private sector capital, private sector innovation, in genuity technology that people that ambition to make return on their capital, but to come to the party where it's possible, whether it's a good business model.
There are those who agree with Banga's call for private capital, among them Rod Shah, the president of the Rockefeller Foundation and former administrator of the US Agency for International Development in Barack Obama's White House.
Well, to be honest, we're all always trying to attract private capital, especially from outside.
Of the country.
Right now, the foreign exchange environment is a very complex and risky one for countries, so we were building tools that take the risk out for those types of investors. The two biggest issues for would be investors are policy and regulatory clarity and consistency, which often also means anti corruption efforts that are serious, and then secondarily taking the
risk out, especially on the foreign currency side. So for example, on the currency risk removal exercise, the World Bank is already planning to commit significant new resources to instruments that basically protect foreign investors from foreign currency exchange rate fluctuations over time, and those types of solutions are going to be absolutely critical to success.
Though addressing those risks will surely help. The competition for private capital is as tough as ever.
So in general, you know, if you look twenty years ago, emerging markets was the place where you would have faster growth, you would have higher returns, higher risk adjusted returns, and that's why the capital.
Would go there.
So if we look today, that has happened in some countries. So if you look at an India, let's say over the last ten years, equity markets ten percent up, Taiwan for obvious reasons because of being a center of innovation and chip making thirteen percent.
Over the last ten years.
And you have another set of forces going on which is completely changed in the last year or two, which is Ai.
With ai comes huge need for.
Power and data centers that need this enormous power.
So the big.
Job, really enough for Ajabanga and the leaders of the other multilateral banks is how do I compete to get private sector money in this kind of environment If in the past it was not proven that the returns could be the returns that weren't expected. If now there's this com petition we're sitting in Virginia, you could be investing in data centers, where there's regulation, where there's a rule of law, where there is no country risk, where there's
no currency risk. I think the bank helps reduce your country risk and your repayment risks. You know, if you're aligned with the bank, and if you're investing together with the bank, you expect that you will get your capital return and the return and hopefully some other returns. The big issue there is that that is no longer enough.
So if private capital is the key to achieving a bigger World Bank, how then to make it better? Specialist says, part of the problem today has been getting money into the right hands.
Obviously, there's been a lot of studies on how to help generate more money.
For the World Bank.
But it's a really great question, David, because as we sit here today, World Bank actual disbursements in the last few years has been anything between ten billion and twenty billion. I don't think that's anywhere close to what we're just talking about, because these countries literally need trillions. So this is net dispersements after they've repaid their debt to the World Bank.
So you do need a lot more.
So the question is within its existing capital structure. The World Bank could be giving meant much more, but if it starts getting closer to a certain level, it does need to have more capital. So it's the chicken and egg where you do need more resources, but you need to start using your existing ability to generate loans and guarantees.
One place to start could be the need for speed. Currently, dispersements take an average of twenty seven months from the time the bank gets a loan request to when the money shows up, a timeframe that Banga says is unacceptable.
We tell communities to pay patiently, whether children grow well, poverty deepens will untreated illness is worse, and the warm to clean water is packed harder every step, sometimes ten years before the first benefits are felt. That is a lifetime. We have to do better. There is precious time they can save. We have the entire process in our process.
You know the culture of the World Bank, having worked there in a senior role, and as they say, culture eats strategy for lunch. Yes, Ajia banker came in saying, I want to make the bank better before we make it bigger. There are those who say he has made some progress. Absolutely that he's expedited some things. It takes less time to get some things decided upon. Has it made progress.
I think he definitely has made some progress. If you talk to people in the bank, you know, depends on who you talk to, you get different stories.
But one of the two things.
That do need to still happen is really this culture of urgency because at the end of the day, you're there to serve the countries that have these biginess.
That's your job.
You're thevironment, so you have to be much faster on your feet to get things done.
Next on Wall Street Week, how and why North Dakota is embracing immigrants for the sake of its economy.
This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is a story about our neighbors, who they are, whether we really know them, and why we need them. Neighbors like Anna Yore of Fargo, North Dakota.
You can work in in gamel glass without no sperien, without know English, what's for.
Immigrant and anyone in it job my yao, missine TECHNICIANE.
I'm making spots of the window at this so you make it and then put that blaff on.
You're moved from South Sudan to the city of Fargo fourteen years ago, seeking a better life. In twenty thirteen, she started working at Cardinal Glass and has been an employee there ever since.
Have Minnie immigrants, we worked like a family, a friend and team work and we help, we support each other.
So here in Fargo we have three hundred and forty seven teammates. About seventy percent of our team is comprised of people born outside of the UNI United States.
Plant manager Mike Arnson has worked at Cardinal Glass Fargo since it opened in nineteen ninety eight. The company manufactures residential glass for windows and doors, with ten thousand employees across its forty nine locations. In Fargo alone, it employs about four hundred workers.
What we want to do is attract and hire the most qualified, the best qualified teammates that we can attract, And it just so happens that a lot of those folks that we're attracting happen to be immigrants, and we're more than happy to have them here.
According to the Bureau of Labor Statistics, North Dakota has the worst worker shortage in America, with only thirty workers for every one hundred available jobs. That's well below the national average of ninety five workers for every one hundred jobs.
There are thirty thousand open jobs in North Dakota, and although our workforce continues to grow, if we get every high school and college graduate, every individual coming out of our correction system, every person on disability into the workforce tomorrow, we would still have thousands of open jobs. And so we really do need to be looking outside of our states borders and outside of our nation's borders to help identify how we can recruit workers to fill the jobs that we have available.
Katie Rolston Howe is director of North Dakota's Workforce Division, overseeing the newly created Office of Legal Immigration. Their goal to bring together immigrants seeking employment and companies that need workers.
With the political climate that we're in, immigration has become a really hot topic, and when we talk about the work that we're doing through the Office of Legal Immigration, a lot of times the conversation does go to conversations around the border or illegal immigration, and that's really not what we're doing.
Really.
Our focus is proactively identifying appropriate pathways and programs that we can utilize to help fill jobs in North Dakota. Employers have been responding really well. There's a ton of enthusiasm around the work that we're doing. Communities are responding well too, and so we've been able to really work with those who are already working in this space.
North Dakota may be the extreme case, but its shortage of workers can be seen in various forms across the country. According to the US Chamber of Commerce, labor shortages affect just about every industry in nearly every state. Although shortages have become less significant over the past two years, the latest national data show that we still have over eight million job openings in the US and fewer than seven million people looking for those jobs. Pa Oranius is a
labor economist with a Dallas Federal Reserve. Her research focuses on regional economic growth and demographic change.
There are areas of the countries, especially the more rural state, where there's a great need for workers, but at the same time their populations are stagnant or declining, and so they have a tremendous need for workers, and of course, if you had a good policy, immigrants would be one of the best ways to funnel workers to those regions.
As the overall size of the US workforce has grown, the proportion of immigrants in that workforce has grown as well, going from just over fifteen percent back in twenty ten to over nineteen percent today. That's some thirty three million people. The construction industry had the highest share of immigrant workers in twenty twenty two, and estimated it's three point three million people, or eleven point seven percent of all immigrant employment.
In comparison, there were just over eight million native born workers in construction in twenty twenty two, representing six point two percent of all native born employment.
We're in a demographic fall. We know that, slowly but surely, we're seeing the baby boomers retire, the aging of the US labor for the declining birth rates, and we know that labor shortages are not just a cyclical matter. They're actually a structural matter for the US economy. And if you look out ten years or so, we're actually looking at a point in time where the US born workforce will begin to decline. In fact, we will have no
growth in the workforce without immigration. We've been very lucky in the US that immigrants have wanted to come to this country and they've contributed labor supply. In terms of their contributions to the economy. This labor supply has boosted growth.
They've also tended to come in the areas of the economy where we have relative scarcity where we need workers, and so whether it's on the high skill end of the distribution or the low skill end of the distribution, we tend to bring in workers where there's fewer American workers, and so immigrants are really complementing that US labor force.
This has really been key to rounding out the economy, addressing needs in different sects, and so definitely mostly sectors on more of the load to medium skilled end, because obviously it takes immigrants a while to learn the language, to get the skill set and the networks to sort of move up the job ladder in the US economy. But for now they're filling important needs in these sectors that employ recent immigrants and more the low skilled immigrants.
Now looking forward, now that the economy is more imbalanced. Labor markets are more balanced, and we're really approaching a kind of a normalization after four years of a pandemic hangover. I think what we're looking to now is more of the structural factors that affect labor markets in the US
and that are going to limit growth going forward. So we look at the demographics of the US labor force, We look at the retirement of the baby boomers, the aging of the workforce, the falling birth rates, and we know that in ten to fifteen years we won't have a growing US born workforce, and that really all the growth in the workforce is going to come from immigration.
And that's the reality of where we are, and that's where we need to address policy in order to enable and facilitate more immigration if we want to continue to grow that labor force.
The immigrant labor force has meant a steady stream of workers for the Cardinal Glass factory, but for anyone who thinks this is a local story, think again. It's also helped create real economic benefits for businesses and for the country as a whole. Economists point to immigration as one of the key factors that kept GDP and job growth strong in the wake of an aggressive fed hiking cycle.
Even as inflation has cooled off around the world, other major economies haven't been so fortunate, with China, Japan, and South Korea among the countries grappling with net migration levels that are too low to counteract population declines.
The reason why we've seen significant increases in labor supply and labor force participation it's legal immigration has come back after COVID and after the Trump administration, as well as more women coming into the workforce. That process of legal immigration that is now normalized, and the Biden administration prioritized, for example, working down visa backlogs and trying to get to a more normal system. I think under a Trump
administration you could expect that to revert. And I think in addition to that being bad for innovation and bad for broader economic growth, it could also be quite inflationary in the short term, because what you're doing is constricting labor supply at a moment where we need more We need more workers. In the United States, our legal immigration system has been an engine for growth for decades.
For a long time, North.
Dakota businesses like Cardinal Glass have no doubts about how important immigrant workers are to the success of its operations and to the North Dakota economy overall.
As the economy grows, we need people to move to Farga more ahead to help us run our businesses. And whether they come from Kansas City or New York City or Los Angeles or Somalia or Bosnia, we just need people to move here to help keep our economy growing. You don't even have to speak English to come work
at Cardinaligi. We've cracked the code on that. We have master trainers that are multilingual, that can train our new teammates in their native language, and so we have entry level jobs where we can get people contributing right away, and as they grow in their comfort in those entry level jobs, then they can graduate onto jobs with a little more difficulty, a little more skills required, and probably within the course of a year, they can be contributing in a lot of different ways.
For the management at Cardinal Glass and for its workers, immigration isn't about politics. It's about business and maybe something else. It's about reaching out to neighbors like Anna Yore to build relationships that work for both parties, which has proven to be the right as well as the smart thing to do. Next on Wall Street Week, the shifting balance of costs versus benefits for nuclear power.
This is Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
This is a story about changing our minds when the facts change, and when we need to. For years, we've heard about the costs and dangers of nuclear power, stemming in large part from two commercial disasters some forty years ago, compounded by the ways governments responded and the news media covered them.
It was the first step and a nuclear nightmare.
The accident occurred here at the Three Mile Island Nuclear Power Plant, a dozen miles south of Harrisburg. It took a full eighteen days before the Soviet leader Mikhail Gorbachev made any public pronouncement on the nuclear disaster. Returnable today on Soviet television, mister Gorbachev said the accident has deeply affected the Soviet people.
Engineers are fighting to contain the damage to this nuclear facility in Japan, warning that one of the reactors could melt down.
But today, the need for more and cleaner energy is changing the cost benefit equation, and opinion in the US has started to shift. The majority of Americans now say they support more nuclear power. One of those supporters is Heather Haff Fear.
Of nuclear is dangerous, but nuclear itself isn't.
Haff is co founders of Mothers for Nuclear, a group she started on Earth Day in twenty sixteen to address some of the misconceptions about nuclear energy.
I think when we talk about risk, it's also important to ask, you know, like, what is the actual impact when something happens? And so everyone kind of knows the big three things that have hapen in a nuclear a three mile Island, Chernobyl, and Fukushima. And when we go back and we look at those events and say, what was the impact to human health, our environment, the planet, it's pretty minimal, and even some of the impacts that we did feel were caused by our own overreaction to
those incidents. We have rallies and marches to show our support for nuclear energy.
We talk about.
Why nuclear is important for our community. We give tours of nuclear energy and power plants, and try and share share with people our hope for the future and how nuclear supports clean energy for people. I started out not really knowing much about nuclear energy, and I was feeling pretty nervous about it. After I graduated from college with
an engineering degree. I couldn't find a job locally. I did a random asortment of things, all while trying to avoid working at our local nuclear plant, but eventually said, you know, maybe I can get curious and ask some questions and learn a little more about it. So I took a job in operations at the plant, and my conclusion after about six years of doing this was that nuclear is amazing. I think safety is a little bit of a tricky word, and maybe we need to talk
about it differently, more in terms of risk. And it turns out that a lot of things about nuclear sound scary, but that doesn't mean that they're dangerous. So I think that was something that took me a long time to learn.
On the other side of the equation, there is no doubt that we need a lot more energy, and may well need nuclear to deliver a good part of it, with over seventy five percent of the demand coming from two categories transportation and industrial needs.
Today we use perhaps three times more electricity than we did in the nineteen eighties, and you were doing much more with it. Our productivity had exceeded the growth in the use of electricity, so there's a very efficient use case there.
Dan Briatt is the former US Secretary of Energy and now runs Edison Electric Institute, which represents all US investor owned electric companies.
It's important for the nation to realize that we're going to need more energy, so we start with that basic fact. As the economy grows, as populations grow, we're going to need more energy. It's what drives our economy. As I like to say, often energy generally makes up roughly five percent of the nation's gross domestic product or GDP. There's also a reindustrialization that's occurring here in America. Manufacturing is
coming back to the United States. Heavy industry is looking to use electricity to help them decarbonize or help them meet emissions goals or environmental goals. It's really really important that we address that demand in a way that's going to allow the economy to grow, allow us to continue
our competitive edge. Today, if you use artificial intelligence to do a Google search, you're using approximately ten times more electricity than you would if you had used a different type of search or search that's from an engine perhaps five or six years ago. All of these demands are coming to the grid. Nuclear is so dense that it can actually help meet that in a very, very environmentally responsible way.
One of the firms working to meet the country's rising demand for power is Whole Tech International. That's an energy technology firm that's developing cheaper and more compact nuclear reactors known as SMRs.
Small modular reactors have been around since the fifties and sixties. They were created by the Navy. Eventually they were created
for civilian purposes. In the case of Hours, which is a three hundred megawatt reactor, we expect two reactors to be built on the Palisade sites on just a footprint of about thirty acres, which by power plant standards is a very small plant, and we expect to break ground in twenty seven and we expect the first plants to be online at the end of twenty thirty and twenty thirty one.
Ultex new reactor would be both smaller and safer than traditional plants, The firm's vice president and head at SMR Manufacturing says, the new technology represents a new chapter in nuclear energy infrastructure.
In my opinion, it's going to be a game changer for green energy, clean, safe, and reliable. It's going to come and very become very important, especially with the development of AI electrical vehicles and a lot of the other initiatives to be able to keep the lights on. Large standard nuclear plants can take up to ten years to
build and install, so the investment's huge. This concept is being able to get one in operation in a relatively half that time, and then be able to continue to add to that, so eventually you'll be able to put three, four or five, maybe six SMRs in the same footprint as one or two nuclear actors of the old size. The components that we're using can be manufactured in the United States, transportation costs will be a lot less and the manufacturing will take a lot less time.
Around the world, countries are taking very different approaches to nuclear energy. Germany has turned away from it altogether, while France derives the highest proportion of its power from nuclear Asian countries are working to catch up. As a group, they more than double their nuclear power output over the last decade, and China plans to build one hundred and fifty reactors by twenty thirty five. Countries that have yet
to enter the nuclear age are also taking notice. Across the Atlantic, Ghana is sifting through bids from fifteen different countries to build its very first nuclear plant. We spoke with the country's Deputy Minister of Nuclear Energy, Robert Sagbaji. He says, the problem for Ghana is in perception it's capital.
We have the United States, we have China, we have France, we have South Korea, and we have Russia. So we have five countries that we narrow down from fifteen companies when we first introduce our requests for information and by the end of the year, maybe sooner than that, we
will come up with the vendor. Right now, we are under an IMF program, so we can't borrow any money on our books, so we need a financing mechanisms such as crowd funding in terms of industry where we identify specific industries that will come in to build a nuclear power plant. We need clean energy. You can easily get money for so light weight, but it can get money for nuclear which is going to replace it's cool. But how we move cool from the sustainment is another issue.
So we are collaborating with our vendor countries, but then financing is key.
Investments in nuclear energy are on the rise. Morgan Stanley estimates that it will attract one point five trillion dollars in capital investment by twenty fifty, and thanks to the demand for power for AI, even the notorious three Mile Island nuclear facility in Pennsylvania is due to be brought back online, backed by Microsoft and Constellation Energy.
The industry has been very concerned about being short electrons to meet the needs or to serve the demand that we're seeing coming on by hyperscalers in particular, so companies like Microsoft as they develop new AI models and place more demand on the grid. I think as we think about the generation of electric electricity here in the United States, we've we've spent a lot of time focused on the development of renewable technologies, but those are not what are
described as dispatchable. They're not available twenty four to seven. Perhaps sometimes they are, but sometimes the wind doesn't blow or the sun doesn't shine, and there's not enough battery capacity to keep the lights on or the data centers running twenty four to seven. And that's what I think
you know is being sent by this deal. The fact that a private company went to another private company to strike a deal may indicate that we are short electrons and we need to develop more generation capacity here in the United States.
The technology has come a long way and the need is acute and growing, but concerns remain, particularly about how to dispose of the depleted uranium that is nuclear waste.
This is a kind of fun little three D printed model of what a fuel storage facility might look like. It'll just would come in on some train tracks here and go all the way into the facility, and then you know, cranes could move over and pick up the canisters and repack them into different kind of canisters and then basically just put them on a concrete pad for storage.
So we actually manufacture about thirty some odd canister systems designed for the storage of spent nuclear fuel, and we can storm in perpetuity. Our canister systems are designed roughly for a shelf life of one hundred years, easily extendable, you know, So we just plan to continue that until the United States decides what its long term proposition is.
They're in certain countries, France in particular, they use what's called a reprocessing mechanism to take that spent fuel and use it for other sources. You know, we can look at it as waste or as garbage or we can look at it as an opportunity to solve other challenges that we face.
Are there risks in pursuing a more aggressive nuclear power strategy, certainly as there are risks in whatever path we take to supply the enormous power needs we're facing around the world. The question is not whether there are risks, but what are the alternatives and are they more risky or less.
The biggest risk of nuclear is not using it. I really am all in for this technology. I don't think there are any significant issues that should be in our way, and as.
We're changing our minds, Kelly Trice has seen it happen in members of the next generation seeking answers about both the climate's future and their own.
It's kind of amazing, actually, and I knew that it had changed. A few weeks ago. I got a call from some high school kids and they wanted to interview me for a school project because they were considering nuclear engineering as a field of the future that they wanted to be in. That told me a lot about how the population had changed.
It looks like nuclear is coming. The question is not weather, but how that does it for us? Here on Wall Street Week, I'm David Weston Join us again next week for more stories of capitalism st