The Macro Moment: What Changed With The Labor Force
(Edited)
I was listening to a podcast that discussed how monetary policy in the early 1970s might have led to slow wage growth. This is something that I think is missing the main point.
In this video I discuss boring down to the base level of situations. For me, it was simply due to the fact more than 50 million people entered the world for in a decade and a half.
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Ps: is the word wages missing from the title?
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Actually it was meant to say What not Why.
Corrected it. Thanks.
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Aha, makes sense :)
You are welcome.
Keep on doing the great work, it's much appreciated!
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Agree we don't need old financial rules and we need to be free on what to do with our money 💵
I think people don't realize the effect that the arrival of the boomer generation (and their aging out), had/will have on the workforce. When I lived in Germany, I saw this first hand with the average age of an autoworker there being 43 and rising. While they did have a source of labor via refugees, they're not getting the educated workforce that they desire. My instructor told me that the German government was even offering a bounty for German citizens to have more babies, and that wasn't even working. Here is where I see automation becoming part of the solution moving forward.
Japan
China
S. Korea
Russia
Canada
Germany
Italy
Spain
UK
All facing the same situation. Personally, the only way out of it, other than immigration is to automate. Yet many of those countries do not have the technological basis to do that. It is going to be very interesting.
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Population growth isn't going to happen so I guess technological development is the only way forward. So in a way, automation makes sense.
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Summary:
In this episode, Taskmaster 4450 discusses the reasons why wages have not kept pace over the last 50 years. He attributes this to the large influx of baby boomers entering the workforce from the late 1960s to the mid-1980s, leading to an imbalance in supply and demand favoring employers. Taskmaster 4450 also mentions the potential impact of automation on economies worldwide due to changing demographics and the need for technological advancement. He emphasizes the importance of analyzing demographic trends, geography, and industry diversity in macroeconomic analysis.
Detailed Article:
Taskmaster 4450 delves into the topic of stagnant wages over the past five decades, analyzing the reasons behind this phenomenon. He starts by addressing a common question regarding the imbalance between employees and employers in terms of power dynamics. While acknowledging the potential influence of monetary policy from the early 1970s, he emphasizes that the significant factor at play is the massive entry of baby boomers into the workforce.
The influx of over 50 million baby boomers from the late 1960s to the mid-1980s globally, especially in developed countries like the United States and Western Europe, created an oversupply of labor, giving employers the upper hand. Taskmaster 4450 illustrates the basic economic principle of supply and demand, indicating that the abundance of workers inevitably tilted the power dynamics towards the employers.
Moving forward, he discusses the implications of the baby boomers reaching retirement age, highlighting that the first wave began exiting the workforce around 2010 as they turned 65. With the oldest baby boomers now approaching 76 years old in 2022, Taskmaster 4450 notes the changing dynamics of the labor market and retirement trends. He mentions that many individuals are working longer due to financial constraints and increased life expectancy, affecting retirement patterns and overall workforce composition.
Taskmaster 4450 then transitions to a global perspective, addressing the potential challenges faced by countries with shrinking working-age populations, such as China, Germany, Japan, and Italy. He emphasizes the growing reliance on automation in these nations to maintain productivity levels amidst demographic shifts. In contrast, he mentions the relative stability of the United States' labor force due to the significant millennial population, mitigating potential labor shortages compared to other regions.
Furthermore, Taskmaster 4450 underscores the role of automation in enhancing profitability for employers, irrespective of necessity, particularly in industries where technological advancements can streamline operations. He stresses the need for macroeconomic analysts to consider fundamental pillars like demographics, geography, and industry diversity when evaluating long-term trends and potential challenges in the labor market.
In conclusion, Taskmaster 4450 warns about the demographic challenges that many countries may face in the future due to shifting workforce dynamics and the need for proactive measures, such as immigration or technological innovation, to sustain economic growth. He encourages a holistic approach to macroeconomic analysis, encompassing various factors that influence labor markets and overall economic stability.