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Rare Earths, Coal Shutdown, Norwegian Air: CEO Daily for April 12, 2018

Good morning.

The Conference Board later this morning will issue a report on the outlook for labor markets in 2018. With the U.S. jobless rate at a 17-year-low of 4.1%, tight labor markets have become a top-tier concern for many businesses. Strong economic growth–fueled by the tax cut–combined with an aging population and shrinking labor force participation will continue to exacerbate the problem.

CEO Daily got an early look at the report, and can share a few key insights:

  • Businesses will likely invest more in automation around the globe in the coming year, to relieve labor shortages.
  • Employers are compromising by hiring workers with lower educational qualifications than in the recent past.
  • The trend toward teleworking is accelerating, and now stands at an all time high.
  • The demand for independent contractors, temporary workers, on-site workers, and outsourcing companies is also increasing.
  • Employers globally are likely to increase their available labor pools by hiring more women and older workers in the coming year.

The conundrum in all of this is that global wage growth has remained so slow, in spite of tightening labor markets. The report says both low inflation and low productivity growth have had a depressing effect on wages. And in the U.S., the composition of the workforce also has held down average wages, as a large baby-boom contingent of high-wage, experienced workers retires while younger, less experienced workers replace them.

But the report concludes that pressure to increase wages is growing: “Companies holding back on raising compensation will increasingly experience higher labor turnover, lower success in recruiting, and less worker satisfaction.”

You can read the report later today at conference-board.org. Incidentally, the Conference Board, which has been providing business with research and insights for just over a century, chose a new CEO last week–Steve Odland, former CEO of Office Depot and AutoZone. Most recently, Odland has been running the Committee for Economic Development, which merged into the Conference Board in 2015. He’ll take over in September.

News below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Rare Earths

Certain “rare earths”—a group of minerals that are essential for building gadgetry from smartphones to smart cars—are no longer looking quite so rare, after researchers found more than 16 million tons of the stuff off the coast of a tiny Japanese island. That’s enough, for some of the elements, to supply the world on a “semi-infinite basis.” The news boosted shares in Japanese offshore extraction companies and machinery makers. Japan Times

Coal Shutdown

The Navajo Generating Station in northern Arizona—the biggest coal-fired electricity producer in the western U.S., and the most heavily polluting—is likely to shut down in the face of competition from greener alternatives. That means less cash for the Navajo and Hopi tribes, which get revenue from the Peabody Energy-owned mine that supplies the plant. The White House, a big backer of coal despite the inexorable shift towards more environmentally-friendly energy sources, is yet to comment. NBC

Norwegian Air

Shares in Norwegian Air Shuttle were up by more than a quarter after International Airlines Group (IAG), the owner of carriers such as British Airways and Aer Lingus, confirmed it was eyeing a takeover. Norwegian Air is an increasingly prominent low-cost carrier, offering cheap flights across the Atlantic, and IAG apparently wants to get more into that end of the market. BBC

Chinese Outlook

Was President Xi’s speech earlier this week really so conciliatory towards the U.S., as many read it to be? Not so fast, says Beijing. Commerce ministry spokesman Gao Feng said the speech, in which Xi promised to further open China’s economy and lower import duties on certain items, did not mean China would play nice if President Donald Trump decides to escalate his trade offensive. CNBC

Around the Water Cooler

Cryptocurrency Scam

A whopping $658 million was apparently netted by scammers in Vietnam, who ran fraudulent initial coin offerings (ICOs) that were really pyramid schemes. The Vietnamese government, which was never very keen on cryptocurrencies anyway, has ordered a probe. Outraged “investors” mobbed the offices of the alleged scammers’ company, Modern Tech, only to discover the firm had vacated its offices a month earlier. Fortune

SoftBank Soccer

SoftBank is among several international investors in a mysterious new consortium that aims to “reshape” soccer by establishing new global tournaments for FIFA, the (legendarily corrupt) body that runs the world’s most popular sport. According to the Financial Times, the consortium is talking about setting up a new international league competition for national teams, and expanding the already-extant Club World Cup tournament. FT

Ryan Effect

The imminent departure of Paul Ryan as House speaker means the GOP is losing its most influential advocate for benefits reform. Ryan may be satisfied that he got his tax reforms, but, as the Journal reports, he leaves Social Security, Medicare and Medicaid unreformed. Nobody else is likely to push for changes as strongly as he would have, leaving reforms unlikely in the near term. Wall Street Journal

Zuckerberg’s Body Language

A lot has been said about Mark Zuckerberg’s verbal testimony this week, but what did his body say in Congress? Ex-FBI agent Joe Navarro spells it out for us: “Interestingly enough, the most psychological discomfort I saw on Zuckerberg’s face, as evidenced by simultaneous lip compression, eye squinting, and narrowing of the glabella (the area above and between the eyebrows), was when he was trying to decipher vague or unintelligible questions from the senators.” Fortune

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.