US companies are facing a “new era” in which fewer people enter the workforce and pressure on companies for higher wages could become permanent, Microsoft President Brad Smith said in an interview with Reuters.
Smith singled out a source in what he called the “biggest economic turmoil” today. In his office in Redmond, Washington, he went to a wall-sized touchscreen device and opened up a series of graphs, showing how population growth has dropped in the US, Europe, China and Japan.
The trend since 1950 of about 5 million people expanding the US working age population every five years has changed.
The change began in the period between 2016 and 2020, when growth slowed to 2 million, and is now slowing even further, Smith said late last week, citing UN data.
“This helps explain part of why you can have low growth and labor shortages at the same time. There just aren’t that many people in the workforce,” said Smith, who oversees the nearly $2 trillion company.
Executives like Mark Zuckerberg, chief executive of Meta, the parent company of Facebook, have recently expressed concerns about the economy. Zuckerberg warned the US could face “one of the worst crises we’ve seen in recent history”, although Smith said it would be premature to declare a recession inevitable.
In the face of competition for manpower, Microsoft recently increased employee salaries while slowing hiring, company employees said.
The company also reduced a small percentage of moving stations pegged to the start of its fiscal year.
Microsoft’s businesses, such as selling productivity tools, cloud services and AI-powered technology that businesses may need in a crisis, prepare the company to meet economic challenges, Smith said.
Population growth has become a hot topic in the tech industry, with Tesla Chief Executive Elon Musk saying birth rates are too low to sustain the US.
Musk recently fathered twins, making him the father of nine children in total, the Insider reported this month.
Smith said he agreed with Musk “maybe on the issue. I am not recommending the same solution.”
Source: CNN Brasil
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