By Alan Murray and David Meyer
February 9, 2018

Good morning.

Bain & Company has an interesting report out this week looking at the three mega-trends that will disrupt labor markets over the coming decades: rapidly aging populations, accelerating automation, and rising inequality.

“You can’t think about any one of those issues separately,” Karen Harris, author of the report, told me. “They push and pull on each other.” Analyzed together, “they lead to some startling results.” Among them:

  • Automation may eliminate 20-25% of jobs in the U.S.—or 40 million—by 2030.
  • That will boost productivity and growth, but the benefits will flow to the top 20% of workers, plus the owners of capital.
  • The growth effects of rising productivity will be offset by a shrinking workforce in developed countries that could cut $5 trillion from GDP by 2030.
  • The reskilling and retraining of workers required by automation “could take several decades,” making a shortage of skilled workers a critical problem for business in the meantime.

Bottom line: it’ll be a period of considerable business, economic and political turmoil. You can read the full report here.

Meanwhile, global stock markets continued their meltdown yesterday and last night, with U.S. markets now firmly in correction territory. The passage of a bipartisan budget deal—while an encouraging sign of functioning government—is nevertheless adding to the market’s woes because it will increase the budget deficit and put upward pressure on interest rates.

More below.

Alan Murray


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