Is the World About to Run Out of Human Labor?
Two British economists argue that the plummeting birth rate combined with increased life expectancy worldwide will cause a labor shortage in the upcoming decades.
Overpopulation, wage stagnation, rising home costs, the 1 percent: Take your pick from these economic gripes when discussing the problem of the shrinking middle class. And there’s good reason to complain — because all 50 states have seen the number of middle-income earners diminish over the past 15 years.
But that trend could be turning around not only in the United States, but also globally. In a paper prepared for Morgan Stanley, two British economists argue that the plummeting birth rate combined with increased life expectancy worldwide will cause a labor shortage in the upcoming decades that will then lead to a reversal of corporate hegemony.
"Companies have been making pots of money, but life isn't going to be so cozy for them anymore."
According to London School of Economics professor Charles Goodhart, the co-author of the paper, "We are on the cusp of a complete reversal. Labor will be in increasingly short supply. Companies have been making pots of money, but life isn't going to be so cozy for them anymore.”
This study sounds all well and good except for one minor detail not taken into consideration — robots. From store clerks to pharmacists, robots are increasingly taking over both low- and high-skill labor. It’s even been predicted that robots will soon put 47 percent of all labor at risk in the United States.
"We are on the cusp of a complete reversal."
Given the rising costs of education and training, these predictions are enough to induce a panic attack. However, some experts argue that all these automated technologies will actually create new jobs and new markets. Medicine, for example, might actually become more human again because doctors won’t be tasked with the cognitive demand of managing patient data.
There’s no clear takeaway about the future of human economic capital, but if the population of people is shrinking while the number of robots is rising, the reality may be that very soon they will outnumber us all. And if that happens, we will definitely need jobs to train robots to be compassionate toward us.
At the moment, the real threat to our jobs isn't offshoring; it's robotic automation, says Dr. James Manyika, member of the White House Global Development Council.