U.S. companies are going through a new period in which fewer people are entering the workforce and the pressure to pay higher wages may continue, Microsoft Corp Chairman Brad Smith told Reuters on the occasion of an interview. an interview.
At the headquarters of software maker Redmond, Washington, Smith pointed to a source of what he called the greatest financial turbulence of the time. At his workplace, he walked to a touch screen and brought up a collection of charts, showing how population development has fallen in the United States, Europe, China and Japan.
The growth of about 5 million people increasing America’s working-age population every five years since 1950 has changed: Between 2016 and 2020 that growth slowed to 2 million, and slows even further, Smith said at the end of last week, citing United Nations data. The main markets abroad have seen the pressure on the workforce drop dramatically.
This helps explain in part why you can have low growth and a high labor shortage at the same time. “There just aren’t as many people entering the workforce,” said Smith, who helps oversee the nearly $2 trillion market-cap company that sells cloud-based services. computing to large enterprises.
Government stimulus measures during the pandemic, COVID-19 concerns, child care and other factors have also contributed to the current labor shortage.
Executives, including Mark Zuckerberg, chief executive of Facebook’s parent company Meta Platforms Inc, have recently expressed concern about the economy. Zuckerberg warned that the United States could face one of the worst downturns we have seen in recent history, although Smith felt it would be premature to declare a recession inevitable.
Tech companies large and small have slowed hiring plans or announced workforce reductions in recent months to weather a possible economic downturn, which central banks are trying to stave off by raising interest rates. Meta Platforms, Facebook’s parent company, lowered its goal of adding software engineers this year from 10,000 to around 6,000 to 7,000. Amazon’s retail division also lowered its hiring goal for 2022. Tesla announced on July 14 that it was laying off 229 data annotation employees who are part of the company’s large Autopilot team and is closing the San Mateo, Calif., office where they worked, according to a filing. California regulations. The self-driving technology company headquartered in Pittsburgh.
This development has made investors less interested in growth-oriented stocks such as Microsoft, whose shares are down around 22% since the start of the year, while the broader S&P 500 index is down 19%. % over the same period.
Also, competing for a limited number of workers, Microsoft has recently raised wages while slowing hiring, company officials said. The software maker also cut a small percentage of related jobs at the start of its new fiscal year.
“Today, we notified a small number of employees that their roles have been eliminated,” a Microsoft spokesperson said. This was the result of a strategic realignment and, like all businesses, we evaluate our business on a regular basis. We continue to invest in certain areas and increase our workforce in the coming year.
Smith said Microsoft’s business of selling productivity tools, cloud services and artificial intelligence technologies that businesses might need in a downturn prepares it for economic challenges. The company recently came under antitrust scrutiny in Europe, and Smith said Microsoft has until October to finalize the implementation of the changes it promised.
Data from the US Department of Labor in June showed that employers overall continued to raise wages and hire more workers than expected. Labor force participation, however, fell for the second time in three months, to 62.2%, showing no continued improvement since the start of 2022.
The decline in the birth rate, a subject addressed several times by Elon Musk
Population growth has become a hot topic in the tech industry. Tesla Inc CEO Elon Musk has drawn particular attention to the low birth rate in the United States. For Musk, if the demographic crisis does not ease, there will not be enough people for Mars: If there are not enough people for the Earth, there will certainly not be enough for March
We should be much more worried about the population crash, he continued.
This isn’t the first time Musk has shared his concerns about the declining birth rate. In December 2021, he said that unless people have more children, civilization will collapse. I think one of the greatest risks to civilization is the low birth rate and the rapidly declining birth rate.
Earlier this month he said he was doing my best to help the underpopulation crisis. The collapse of the birth rate is by far the greatest danger facing civilization.
Smith said he agreed with Musk maybe in the issue [de la natalit]. I do not recommend the same solution.
According to the World Bank, the birth rate in the world has been in constant decline since 1960. Economic uncertainties caused by the COVID-19 pandemic have accelerated the downward trend in birth rates, wrote Darrell Bricker, CEO of Ipsos , a market research company on the World Economic Forum website:
Most children today are wanted or planned children, especially in the developed world. Deciding to have a baby depends on optimism about the future – and optimism is hard to have during a global pandemic. In fact, the Brookings Institute estimates that 300,000 babies are not born in the United States due to economic insecurity related to the pandemic.
Could this be a short-term phenomenon ready to be corrected? Maybe. Some analysts predict a mini baby boom once vaccines become widely available and restrictions are lifted. But even a mini baby boom is unlikely to fully offset the decline. Experience shows that when a couple puts off having a child, for whatever reason, they usually don’t do it until later. The born baby remains born.
A drop in fertility is just one way the pandemic is suppressing population growth in many developed countries. The other: closed borders. In 2020, Australia recorded its first population decline since World War I, due to tighter border controls related to COVID. Canada granted permanent resident status to 180,000 applicants in 2020, well short of the target of 381,000 – and most new permanent residents were already in the country on student or work visas.
A third grim factor is also at work: the death toll from the disease itself. Researchers predict that life expectancy in the United States has shrunk by a full year due to deaths from COVID. Racial minorities have been particularly affected, with the life expectancy of African Americans reduced by two years and that of Latinos by three years. Officially, the pandemic is responsible for more than 3 million deaths, but this figure could be much higher, as some countries may under-report deaths. This is likely, for example, in India, where the pandemic kills 4,000 people a day; many authorities believe the actual number to be much higher.
Birth rates are also falling in the world’s two most populous countries, China and India.
China’s Statistics Department said on Monday that the country’s birth rate fell to a record low of 7.52 births per 1,000 people in 2021. several decades in 2016 and now allows couples to have up to three children. And India’s fertility rate fell below a key replacement level last year, according to the Times of India.
Source: Interview with Brad Smith
What do you think of Brad Smith’s comments?
An observable phenomenon in your country?
Do you think the technology industry is the most affected?
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