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Wednesday, May 22, 2024

Workers are welcomed to a new golden age

The mid-2010s were a terrible time to be a worker, but the situation is changing in favor of employees. In the rich world, workers are entering a golden age. The scarcity of labor, particularly manual work that is hard to replace with technology, is becoming better rewarded. Artificial intelligence is also giving workers a productivity boost, leading to higher wages. As a result, some optimism is building around the state of labor markets today.

China’s working-age population is falling, and other poor countries are struggling to build industrial capacity, leading to a dearth of workers in the rich world. Workers have become so precious that businesses are starting to hoard them. Policymakers are also favoring today’s workers, with many signaling support through policies such as maintaining or increasing minimum wages in real terms.

A high-pressure economy is becoming the goal of Western leaders to ensure healthy employment and rising wages, especially for the lower-paid. The ongoing efforts of policymakers are already bearing fruit. Tight American labor markets are leading to fast wage growth, with workers switching jobs for better pay, and poorer employees benefiting most of all.

AI is expected to bring a lot more people into higher-paid expert work. Although some jobs may be affected by AI, new tasks will be created around it and in other parts of the economy, driving job creation. The skills required for these new tasks will complement AI, and workers with fewer qualifications will likely be the ones benefiting. The forces transforming labor markets – demographic change, policy, and AI – will interact differently in different conditions.

The ongoing transformation in labor markets is filled with optimism and opportunities for workers. Countries are now looking to enjoy the fruits of a more productive and richer economy, leading to improved employment and wages. Policymakers, businesses, and organizations need to collaborate to realize the full potential of the transformation while embracing changes and disruptions.

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