Beginning in 1990, several forces converged to shape the global economy. Globalization, demographics, technology, deflation, debt, and interest rates have all played a role. Now, according to a recent book, at least two of those forces are reversing. In The Great Demographic Reversal, authors Charles Goodhart and Manoj Pradhan describe these forces and their influence on the last thirty years of economic activity. With this convergence, the world experienced an extended deflationary period, which per the authors, was driven in part by a labor supply shock. The book said the following:Continue reading
A recent Article on the future of work focused on an important piece of the story: a future employee compensation model. Author Dwight Chestnut proposes a new model that he calls the Empowered Employee Compensation Model (EECM). This new workplace compensation model was the result of a new economic research initiative. The model replaces hourly wages, salaries and benefits with ten new income resources and benefits and is projected to drive a three-fold increase in the aggregate standard of living.
The World Economic Forum focused on wages in a recent Article that described a new Report from Hays, the world’s largest specialist recruiter. They highlight another year of change ranging from the tensions rising over trade relations between the US and China; to the uncertainty around Britain leaving the European Union; to the increasing levels of scrutiny against ’Big Tech’ and the ensuing debate surrounding privacy and content.
The IMF forecast a slowdown in global real GDP growth due in large part to the fear of the unknown. The Global Skills Index developed by Hays tracks the trends facing the global labor market. Here are some of the key findings:
In a recent insights report, authors Karen Harris, Austin Kimson and Andrew Schwedel look at macroeconomic forces and their impact on labor in 2030. The Collision of Demographics, Automation and Inequality will shape the 2020s – a collision that is already in motion. By 2030, the authors see a global economy wrestling with a major transformation, dominated by an unusual level of volatility. Here’s a summary of these three forces:
AN AGING WORKFORCE
As the global workforce ages rapidly, our authors forecast a slowing of U.S. labor force growth to 0.4% per year in the 2020s, thereby bringing an end to the abundance of labor that has fueled economic growth since the 1970s. Even as longer, healthier lives allow us to work into our sixties and beyond, it is not likely to offset the negative effects of aging populations. This labor force stagnation will slow economic growth, with negative side effects including surging healthcare costs, old-age pensions and high debt levels. On the positive side, supply and demand dynamics could benefit lagging wages for mid-to-lower skilled workers in advanced economies through the simple economics of greater demand and lesser supply – but that leads to their second major force: automation.