> A study conducted by consulting firm Korn Ferry found that by 2030, there will be a global human talent shortage of more than 85 million people, roughly equivalent to the population of Germany. That talent shortage could slash $8.5 trillion from nations’ expected revenues, affecting highly educated sectors such as financial services and IT as well as manufacturing jobs, which are considered “lower skilled” and require less education.
I'm ready to believe that there could be harms associated with this, but it's notable that Fortune doesn't bother actually identifying the real, concrete, human harm caused by an 85-million-person talent shortage.
There's a historical model that proposes that the Renaissance directly came out of the Black Death—the decrease in population gave the working class more bargaining power, which led to higher standards of living for the survivors, which created an environment where there was more leisure time to spend creating and consuming arts and philosophy.
It doesn't particularly matter to me if this model is strictly accurate to the history, it's a plausible outcome from reduced workforces.
We only need to work more if companies need to continue to bring in large amounts of profit. I'll need to see some really persuasive evidence that companies having a smaller bottom line because they have to compete for workers in a shrinking workforce hurts the workers in any meaningful way.
I suspect this is one of the toxic outcomes of broad stock ownership.
We could allow the real-world economy to approach a stable equilibrium and even modest contraction and it would probably have many positive outcomes. We do burn a lot of labour and resources on buillshit and bubbles.
But so much of the population is staked in the stock market now that any narrative aside from "perpetual 7% growth" is political suicide.
I'm a broken record, but I think the common calculations used to value financial assets look ugly when the extraction rate declines and blow up as it approaches zero.
That's why policy makers don't want to build more housing. And why passive investors are freaking out about the coming labor market where workers have better leverage.
> Would it be a conspiracy theory to suggest that this is the real driving force behind the push for 401k plans?
I don't know if it was intentional, but the 401k has turned out to be a masterstroke of propaganda for pro-business set. It's gotten voters to think like they're capitalists and screw themselves in the process.
> There's a historical model that proposes that the Renaissance directly came out of the Black Death—the decrease in population gave the working class more bargaining power
The Black Death didn't left a survivors cohort composed mostly of retirement-age people.
Right, the age differential is a huge problem and one we should spend time on.
But this article isn't about how we take care of the elderly during this time of adjustment (we all know that the age gap isn't permanent, it will stabilize as people die), it's about how we keep GDP growth high.
I'm not comfortable setting new, higher norms for what's expected of workers (or of how much immigration we should be driving) with the justification that we're going into a 20 to 30-year adjustment window. We should figure out how we ride this out with the full understanding that it's temporary and then separately figure out what a new developed world with fewer native-born people looks like.
> That worked then because the main source of wealth was land. Less people means more land per person.
That assumes that people actually owned the land that they were working and weren't renting it from a landlord. If you're renting it from a landlord (with whatever definition of "rent" used in a given time and place) then sure, there's more land available to rent so the rent prices are cheaper, but it's not obvious to me that that's substantially different than the current prospective scenario where the owners of capital have less human capital to go around and so need to pay more for it. It's just a different way of structuring the same scarcity problem—fewer people to work leads to less profit for the holders of capital (whether that capital is in land or abstract financial instruments).
> That's not been the case since the industrial revolution. Now the main source of wealth is capital, including human capital.
And any event that causes human capital to be more scarce causes it to cost more. Since for most of us our wealth resides almost entirely in the human capital associated with our own selves, if human capital costs go up then our individual wealth goes up.
The only exception is if you're in the small class of people who own substantial non-human capital.
> That assumes that people actually owned the land that they were working and weren't renting it from a landlord.
No, it doesn't. Prices are influenced by elasticity of supply and elasticity of demand. Even without owning it, if suddenly there are not enough laborers to go around, the remaining laborers will be in higher demand and be able to command higher wages from the landlords, who would rather pay a higher wage than leave the land fallow and get nothing from it at all. As a software engineer you should be familiar with this phenomenon, even when you work without owning shares of your employer.
You are commenting on both medieval history and economics without benefit of so much as a freshman level introduction to either. The rest of your post is full of similar misunderstandings and disputing it point by point would be tiresome
The main point you're missing though is this: Yes, allocating the profits between capital and labor (as between land and labor in ancient times) is a perennial war. But unlike then, now the pie actually gets bigger. There was no way to make more land before, other than to conquer, discover, colonize someone else's. Fundamentally zero sum. But today, creating more capital actually creates more "fields that can be worked" thus increasing demand for labor.
In times of secular stagnation, it does seem, to the chagrin of myself and anyone else who isn't already independently wealthy, that labor always slowly loses gains in a relative sense. But any time things start changing or expanding again, the "Lord would rather have peasants at a high price than a fallow field" effect always starts helping again. And in either time, the vast amounts of capital created (by which I include physical plant, invented processes and technologies, and even acquired education and skills inside of the head and belonging to laborers) help everyone get richer. This is why the poorest in America often have access to air conditioning, antibiotics, and cell phones, unheard of luxuries at one time, even when they are unfortunate enough to live in a time when the big rentseekers slowly chip away at their percentage of the profits.
> There's a historical model that proposes that the Renaissance directly came out of the Black Death—the decrease in population gave the working class more bargaining power, which led to higher standards of living for the survivors, which created an environment where there was more leisure time to spend creating and consuming arts and philosophy.
That's very interesting, do you have any sources I could read more on that?
If all of these sound like lies to spin economists' narratives and scare everybody into playing into their hands, it's because that's exactly what they are.
It is getting difficult to navigate all this inconsistency. Robot farmer but 6 day work weeks. Climate change but RTO. AI but labor shortage. Like a Ouija board jumping back and forth; what is it trying to spell?
Because immigration (i.e. increasing the labor pool, increasing competition in the labor market, increasing demand for housing) actively harms the average member of the electorate? I fail to see how working _more_ hours is a consequence of fewer workers chasing the same number of jobs (unless you believe the average non-western immigrant comes here, starts a business, and employs at least one native born person.)
Don’t know where you live but where I live there is simply no one born here willing to do the hard jobs: harvesting, kitchen cook, cleaning, construction, etc. Only immigrants. There is beging this a lack of workforces at all levels, it’s scary, even hair dressers can’t find people. And additionally population is aging fast, no one left to pay the pensions, 2 worker pay the pension of one retired person – which is not possible and hence pensions is the biggest deficit of the government. Immigration is a net positive here, but it scares people, because right extremists make it look scary with lies, like the one the triggered the riots in England recently.
No one born there (and where I'm from as well) is willing to do the hard jobs at the current market rate. Every conversation about a "labor shortage" seems to disingenuously pretend that wages are a fixed part of the equation.
Wages never rise because everyone falls for the propaganda that immigration is a "net positive" (and it is only a net positive for the capital-owning class who sell out their countrymen in favor of lower employment costs.) Do non-western immigrants in Germany contribute more in taxes than they receive in benefits (on average?)
Because, there is another option: accept a lower standard of living. And depending on what your standard is, it can be a perfectly acceptable (even desired) option.
This is it. We westerners, and very especially Americans live an incredibly inflated lifestyle. Walmarts stuffed tonthe roof with useless shit, people mistaking luxuries with necessities and whinging like hell when they can't have their air conditioned 3500sqft house stocked with 3 refrigerators and 9 tvs.
We waste an absolutely disgusting amount of absolutely everything that we produce. No one values anything, and everything is replaceable.
It's sad but I feel like a really and very hard depression would likely be the absolute best thing for this planet and our species in the long term. We are so fat and so lazy and so entitled. It's hard to imagine getting to a more efficient future without a hard cultural reset.
I think in the long term there is no real solution to making the planet and humans coexist in a sustainable manner. Yes, as Covid showed, stark decrease in human activity is very good for the planet. But it is not a long term solution, a depression wouldn’t be either.
I hope I’m wrong but if not, we are on the path for shooting ourselves into oblivion in not so long. Planet will need a couple million years to recover, but I have good hope it will.
Presumably those young people forced to work their asses off 6 days/week will be even less inclined to become parents, further compounding the problem. Trying to solve lack of workers due to sub-replacement fertility by squeezing more workhours of people that already can't afford children is like ship captains trying to solve the iceberg problem by speeding through areas known to contain them.
> Presumably those young people forced to work their asses off 6 days/week will be even less inclined to become parents, further compounding the problem.
That's not a problem, that's the purpose of the current economical and political order in industrialized nations, whether they are capitalist, communist or mixed.
After all the horrors of the 20th century, including both world wars, it is not as easy anymore to trick the youth of the world to die on the battlefields, so the rulers have to device other means to get rid of the younger generations.
Relevant: John D. Rockefeller Ⅲ presents “An Interim Report to the President and the Congress from the Commission on Population Growth and the American Future” https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 (1971)
Immigration probably makes housing more affordable, as building still a labour intensive activity, and immigration reduces labour costs. We have car assembling robots, but not house building robots, or plumber robots.
But we can't count on migration on the long term anyway, as countries with current net positive population growth rates are on the way to go sub-replacement in 1-2 generations as well.
Housing unaffordability should be pinned on NIMBY, bias against high density housing, and the decades long push to optimize housing as a rent-seeking friendly investment vehicle instead of simple dwellings. Today if you intend to buy an apartment in a high cost city, odds are that you must not only outbid people wanting to live there as well, but also rich people overseas that invest in real state as a way to stash money offshore and/or evade taxes.
> Immigration probably makes housing more affordable
It would if you'd import actual builders (which is strictly regulated industry). Instead we (NZ) get IT specialists (like me, lol) and if you are lucky - occasional nurse.
Right, because working an extra day will make up for no one understanding what they are doing, and an increasing number of people not participating in the workforce.
In reality, this is what will happen: 6 days a week and immigration, because the ultimate goal is to benefit the corporations. More workforce supply means lower wages, essentially modern slavery.
Yes. We absolutely must to return to the office and work 6 day weeks in 12 hours shifts and take one week vacation in a year, evidently not in one go because can't leave the assembly line.
It's funny they mention Germany for size given that until recently there had been a push for popularizing the idea of a 4 day work week (of 8 hour shifts) and it seems only earlier this year there's been an increase in news stories pushing in the opposite direction. Simultaneously the Liberal party repurposed the brand it originally used for its own watered-down UBI proposal as a new label for the existing (means-tested, limited and conditional) social welfare. It feels like we're throwing a lot of progress out of the window with very little pushback.
Just like how it was with RTO, expect soon some big corporate CEO to start talking about the “need” for that extra day, coupled with some incentives like “work it from home first!!”. This will be followed by a few cringy LinkedIn posts and/or tech bros explaining how that extra workday ACTUALLY changed their lives for the better. Eventually, it will become the norm, and you will be seen as a black sheep if you say otherwise. You won’t “fit” in the company culture and could be terminated or, at best, face zero career advancement or promotion. Just like RTO all over again.
It’s ironic seeing news about that extra workday when layoffs are high. Just yesterday, I read about Intel laying off 10,000 employees.
Why do you think the western world is in a stable decline?
You mean in terms of population? The Chinese population is also declining. So i'm curious why you think the ratio is skewed, my impression is China is going to shrink more, faster, based on their current demographic trajectories.
It's actually India, Brazil and many African countries that are growing hard.
This neglects to state ... unrestricted immigration can buy us an out, for now, for in theory an maybe ~10 years.
So this immigration solution gets us to maybe 2035 or so.
And even that is dependent on none of the South American and African countries actually improving. Living conditions in Mexico are rapidly approaching the level where immigration from Mexico will stop outright. Columbia is behind that, but not ridiculously so. Venezuela is an exception, but short of the current government starting a war ... and Brazil won't be providing the immigration numbers we need.
Okay ... and then? I won't even reach retirement age until 2045, and I do hope to enjoy retirement for 20-30 years. By the time I kick the bucket, if I calculate right, we'd need ~1.5 times the size of the human population to immigrate to the west.
I find this figure problematic. For one thing, that's more humans than the UN predicts will be alive at that time.
Immigration from Mexico (by Mexicans) already has stopped. Those people crossing the border into the USA are not from Mexico. They come from all over the world. Ecuador has no visa entry requirement so people from all over the world go there and then make the long arduous journey up through Central America to the USA.
There is a whole economy that depends on people working 5 days a week, such as hospitality. Furthermore, as someone who is now 60, I can tell you how disastrous for the health it is when you have to work also during week ends. As you can never really rest, tireness stacks up to the point of burn out. You need these days badly to give your mind a bit of fresh air. I went many times through absolute nightmares when a manager had decided on unattainable datelines, which forced us to skip week ends all together. I would spend weeks before being able to work properly again. Those fat geese sitting on a fat matress of stock options, threatning us to make them richer is beyond indecence.
How about a pause on immigration while we figure out how it is that despite all the advances in productivity and essentially supercomputer chips inside laptops, there is a need for 6 day workweeks?
The notion of labor shortage relies on the assumption that productivity is the same, but there is a opposite offsetting effect that's comparable (stronger? weaker? who knows, but IMHO of a similar magnitude) - structural unemployent caused by increased automation, as the electronics and AI systems become both more capable and cheaper. There are already many jobs which could be done better by machines, but it's simply cheaper to pay peanuts to a person instead - and as soon as the machine becomes cheaper and/or wages grow that the person is 1% more expensive than the machine, that profession will shrink in numbers.
It's counterproductive to try to grow a workforce segment that's likely not be needed soon. If there indeed is a labor shortage for some years, the society will handle the increased wage cost (which also imply increased push for automation) much better than it can handle a large segment of angry unemployed people, so while the future is unclear, it's better (at least for the society - the billionaires definitely benefit from cheap desperate potential workforce) to err on the side of doing less to solve this "problem" rather than doing too much.
This clickbait headline suggests 6-day workweek as an alternative when job market is defined by limited supply. It feels like the goal is to scare some people to persuade them supporting pro-immigration policies. What a nonsense.
Yes, immigration can solve the demographic problems of some Western countries. However it is not sustainable and it will most likely deprive poor countries from the most talented people. This is colonialism in disguise. And the ticking bomb is global: we will see population peak everywhere already in this century, so what’s going to happen when Nigeria won’t produce more workers for America or Europe?
We need to focus on fixing demographic problems instead. Solving gender inequality, building parenting-friendly education system, building better safety net and reforming the work - not just for remote cases, but for the majority that still has to attend their workplace.
Why don't the rich elites invest in LSD's (Labor Saving Devices), ie Automation?
That investment in technology (LSD's) would also help to create gainful employment.
Immigration is just a way to keep wages down and drive Asset prices high.
IDK we have record immigration in Canada and a housing shortage. I am not sure the solution is more immigration. We do have a productivity problem though. At some point the working population will find equilibrium when the baby boomer generation dies out.
> But he maintains the only way to solve rich countries’ labor problem is to let in immigrants to work, particularly from countries where population growth is increasing, such as Nigeria or Tanzania, rather than decreasing.
Aren't birthrates declining pretty much everywhere (including Nigeria and Tanzania, per the graphs Google pulls up)? It seems foolish to just assume sub-Saharan Africa is going to buck that trend forever, and be a baby-factory needed to make the math on Western corporate growth targets work.
I propose we solve this problem by firing Lant Pritchett from whatever fake job he currently holds and have him work a 128 hour workweek doing something actually productive. If that's insufficient, we can do the same to all the other economists.
I'm ready to believe that there could be harms associated with this, but it's notable that Fortune doesn't bother actually identifying the real, concrete, human harm caused by an 85-million-person talent shortage.
There's a historical model that proposes that the Renaissance directly came out of the Black Death—the decrease in population gave the working class more bargaining power, which led to higher standards of living for the survivors, which created an environment where there was more leisure time to spend creating and consuming arts and philosophy.
It doesn't particularly matter to me if this model is strictly accurate to the history, it's a plausible outcome from reduced workforces.
We only need to work more if companies need to continue to bring in large amounts of profit. I'll need to see some really persuasive evidence that companies having a smaller bottom line because they have to compete for workers in a shrinking workforce hurts the workers in any meaningful way.