REDMOND, Washington: US companies are facing a “new era” in which fewer people are entering the workforce and the pressure to pay higher wages could be permanent, Microsoft Corp President Brad Smith said in an interview to Reuters. told.
At the software maker’s Redmond, Washington, headquarters, Smith highlighted a source he called today’s “greater economic turmoil.” In his office, he walked over to a wall-sized touchscreen device and drew a series of charts showing how population growth has fallen in the United States, Europe, China and Japan.
Smith cited United late last week as saying the expansion of the US working-age population of about 5 million people every five years since 1950 began in the period between 2016 and 2020, when growth slowed. 2 million, and is slowing down further. nation data. Major markets overseas have seen an outright decline in the labor force.
“This helps explain part of why there may be low growth and labor shortages at the same time. There are not as many people entering the workforce,” said Smith, who heads cloud-computing businesses. Helps oversee the nearly $2 trillion company that sells the services.
Government incentives, COVID-19 concerns, childcare and other factors have also contributed to the current labor shortage during the pandemic.
Executives, including Mark Zuckerberg, chief executive of Facebook parent Meta Platforms Inc., have recently worried about the economy. Zuckerberg warned that the United States could face “one of the worst recessions in recent history”, although Smith said it was too early to declare a recession inevitable.
Competing for a limited workforce, Microsoft recently raised salaries at the same time it slowed hiring, company officials said. The software maker also laid off a small percentage of the jobs it estimated at the start of its new fiscal year.
Smith said Microsoft’s business is selling productivity tools, cloud services and technology with artificial intelligence that enterprises may need in a recession, preparing it to weather the economic challenges. The company has recently faced antitrust investigations in Europe, and Smith said Microsoft had a promise to “finalize the implementation” by October.
US Labor Department data for June showed employers largely continued to raise wages and hire more workers than expected. Labor force participation, however, declined for the second time in three months to 62.2 per cent, not showing a steady improvement since the start of 2022.
Population growth has become a hot topic in the technology industry. Tesla Inc CEO Elon Musk, who reportedly has nine children, including newborn twins, has drawn attention, particularly to the low US birth rate. “Trying my best to help with the low population crisis,” he wrote on Twitter.
Smith said he agreed with Musk “probably in the problem. I’m not recommending the same solution.”