In the past three decades, technology and globalization have reshaped economies around the world. In the process, a global labour market began to take shape. The most striking benefit has been the creation of 900 million non-farm jobs in developing countries, helping lift hundreds of millions of people out of poverty. During this time, advanced economies were able to raise productivity by investing in technology and tapping new sources of low-cost labor, while creating new high-wage jobs for high skill workers. Strains in this global labor market are becoming increasingly apparent -... [+] Show more
In the past three decades, technology and globalization have reshaped economies around the world. In the process, a global labour market began to take shape. The most striking benefit has been the creation of 900 million non-farm jobs in developing countries, helping lift hundreds of millions of people out of poverty. During this time, advanced economies were able to raise productivity by investing in technology and tapping new sources of low-cost labor, while creating new high-wage jobs for high skill workers. Strains in this global labor market are becoming increasingly apparent - especially in the aftermath of the 'Great Recession'. Joblessness remains high, and there are expanding pools of the long-term unemployed and other workers with very poor employment prospects; youth unemployment is approaching crisis proportions. And, even as less-skilled workers struggle with unemployment and stagnating wages, employers face growing shortages of the types of high-skill workers who are needed to raise productivity and drive [gross domestic product] GDP growth. Jobs and income inequality have become grave political and economic concerns. In this report by the McKinsey Global Institute, we identify forces of demand and supply that are shaping a global labour force that will grow to 3.5 billion by 2030. We document these shifts and analyze the implications for workers, national economies, and businesses. We conclude that the forces that have caused imbalances in advanced economies in recent years will grow stronger and that similar mismatches between the skills that workers can offer and what employers need will appear in developing economies, too.
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