Key Highlights from this interesting read:
Generational demographics, less cross border mobility and rapid technological advances represent structural forces in the developed markets which the government would be focusing on.
Process automation and worker retraining will continue to gain importance in an era where the skills required are consistently changing in this fast moving world.
Despite the Fed increasing rates at a record level over the last 10 months, the employment to population ratio has actually increased.
Working age population for Europe and Japan have started to shrink, China's total working population has shrank by 3mn last year.
Key Highlight: We are moving from an era where economics drove geopolitics (benign globalization) to an era where geopolitics are constraining economic consideration (great power competition).
A fall in immigration combined with a requirement of skilled workers to adjust to the security of local production has lead to developed economies into uncharted territories.
The cost of production in China to the US fell from 40:1 in 1990 to 4:1 in 2023.
Investment in childcare and elderly care could bring more women participation in the labor force. Shinzo Abe's "Womenomics" added 2.6mn female workers.
Cost of childcare in the US is 4 times OECD average.
Government policies around worker retraining and flexibility will be a key differentiator in bridging the gap towards the economic output desired.
A lot of capex will be dedicated when investment is needed in automation to get the same level of output from lesser workforce.
33% of Japan's adult population is over 65.
Aging demographics tend to put downward pressure on real interest rates. As elders tend to lend more and younger people tend to borrow more.
Parents in the US typically spend 20% of their income on child care as compared to 5% in Europe and 1% in Japan. Reducing this expense can lead to a lot of women being added to the workforce. (11-12 million in the US alone).
Shortage of skilled workers has become a critical chokepoint for global economic growth.
Only 44% of those born after the late 1980s are expected to out earn their parents.
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