From Pacific Standard:
Japan reached peak talent in 1995. (Photo: BradBeattie/Wikimedia Commons)
Talent has replaced the depletion of natural resources as the world’s biggest crisis.
Talent is the new oil. Dear talent has replaced depletion of natural resources as the world’s biggest crisis. The geopolitics of energy pales in comparison to the geopolitics of talent. We will never live to see peak oil thanks to peak talent:Meanwhile, at BusinessWeek:
Demographers such as Michael Teitelbaum at Harvard Law School and Jay Winter, a history professor at Yale University, note that already more than half the world’s population lives in aging countries where the fertility rate is less than 2.1 children per woman—the rate required to replace both parents, once infant mortality is taken into account.Japan hit peak talent in 1995. Next up is South Korea (2016) with Thailand not far behind (2017). Hong Kong is in a demographic death spiral. So much for the Asian Century.
This is both an opportunity and a threat. On one hand, it could help preserve natural resources in nations that have been taxed by rapid population growth. But some economists blame a slowdown in population growth for contributing to such disparate events as the Great Depression and Japan’s sluggish growth rates in recent decades.
Some developing nations that built their economies on an expanding supply of young people entering the workforce are rethinking their growth plans. China saw its working-age population decline by 3.45 million in 2012 and 2.45 million last year—a cumulative decline of 0.63% since 2011 and a sign that expansion has ended. It is now relaxing its one-child policy and making it easier for people to move to its cities to try to boost productivity.
The main hegemonic rival for the United States right now (besides some topless Russian guy resetting the rules to the Great Game) is China. China doesn’t have only a peak talent problem. China has a brain drain catastrophe:
Wang Huiyao, the director of The Center for China & Globalization, said the phenomenon threatens China’s long-term economic transformation. He’s urging the Chinese government to set up an immigration bureau and encourage more skilled foreigners to immigrate into China.Emphasis added. If not for immigration, the United States would be facing peak talent. Given that leaving home is the default setting for college graduates, how can dying China compete? In the war for talent, China is firing blanks. Advantage America....MORE
“The U.S. is selecting talent from 7.9 billion people, but we are from only 1.3 billion,” he said.
Zweig, a specialist in China’s human resources said that China’s leaders are acutely conscious of the brain deficit, particularly at the upper end of the academic pyramid. “China is waging a talent war — it’s the most active state in the world in terms of reversing migration,” he said.
This Economist Foresees 15 Years of Labor Shortages
Economists who worry about high unemployment are a dime a dozen, or 0.83¢ each, as they will point out. It’s less common to find an economist predicting an era of chronic labor shortages, with employers struggling to fill openings. One who does see things that way is Gad Levanon, the Israeli-born director of macroeconomic research at the Conference Board, a business research group founded in 1916.
I sat down with Levanon this week to ask him to explain why he’s swimming against the tide on the topic of labor. Here’s what he said:He seems remarkably sanguine about the effect of automation on employment. I'm wondering if he might be a robot.
Baby-Boom Retirements: Lots of things about the future are unknown, but one thing we can say with certainty is that in 25 years, baby boomers will be 25 years older than they are today.
The aging of the workforce has pushed down the share of Americans who are in the labor force, either working or looking for work. The labor force participation rate will continue to fall in coming years as the vast majority of those who haven’t already retired do so in the next couple of decades. Companies will struggle to replace those retirees, Levanon predicts.
Two-Tier Market: It’s quite possible for labor market shortages to co-exist with high unemployment for those people who lack the skills that employers are seeking, Levanon says. In fact, that’s what’s happening. For people who have been out of work for less than half a year, the job market is pretty much back to normal, while there’s still an enormous bulge in the number of people who have been out of work for more
than half a year, as this chart shows.
And these numbers don’t even reflect those who have dropped out of the labor force altogether. The upshot is that the labor market could start to get tight—and wages could start to rise—even at low levels of employment, Levanon says.
History: Automation has been a fact of life in the working world for generations, and never before has it generated mass unemployment, Levanon says. True, it dislodges people from old jobs and forces them to find new niches, but it’s never caused permanently high joblessness, he says, asking: “So why should it be different now?”...MORE