A new report, Labor 2030: The Collision of Demographics, Automation and Inequality, from Bain & Company’s Macro Trends Group finds abundance of labor that has fueled economic growth since the 1970s – spurred to growth by women entering the workforce, the opening of China and India, and the baby boomer generation – is winding down. Most of the world’s workforce is aging rapidly, slowing labor force growth. In the U.S., for example, Bain anticipates labor force growth will slow to 0.4 percent per year in the 2020s. The deceleration in labor force growth in OECD countries could result in a $5.4 trillion GDP shortfall by 2030.As the total size of the labor force stagnates or declines in many markets, the momentum for economic growth should slow. If it does, governments will face major challenges, including surging healthcare costs, old-age pensions and high debt levels.
Faced with a rising scarcity of labor, companies and investors are likely to draw increasingly on automation technologies, which, in turn, would boost labor productivity by an average of 30 percent, compared with 2015, with rising impact over time.
Faced with a rising scarcity of labor, companies and investors are likely to draw increasingly on automation technologies, which, in turn, would boost labor productivity by an average of 30 percent, compared with 2015, with rising impact over time.
But to grow, economies need demand to match rising output. Bain’s analysis shows automation is likely to push output potential far ahead of demand potential. In the base case scenario, the rapid spread of automation may eliminate as many as 20 percent to 25 percent of current jobs—equivalent to 40 million displaced workers—and depress wage growth for many more workers.
The benefits of automation will likely flow to only about 20 percent of workers—primarily highly compensated, highly skilled workers—as well as to the owners of capital. The growing scarcity of highly skilled workers may push their incomes even higher relative to lesser skilled workers. As a result, automation has the potential to significantly increase income inequality and, by extension, wealth inequality.
Bain’s base-case scenario, in which automation displaces 20 percent to 25 percent of U.S. workers, will hit the lowest end the hardest. Bain analysis shows that workers currently making between $30,000 and $60,000 per year are likely to experience the greatest disruption from automation: up to 30 percent could be displaced. Automation is expected to have a lesser impact on those with incomes between $60,000 and $120,000 a year and the least negative impact on those earning more than $120,000.
No comments:
Post a Comment