Of the estimated 200 million people who are unemployed globally, 40 million live in advanced economies where labour markets are not likely to return to pre-recession employment levels in the years to come, according to a report by the McKinsey Global Institute.
Not only is hiring in advanced economies restrained, many of the jobs lost may never return.
In the US, for example, technology and globalisation have been changing the nature of work for about two decades. In every recession between World War II and 1990, US employment returned to its pre-recession level roughly two quarters after GDP did. In the past three recoveries, the lag has been lengthening. And it will probably take 45 more months to restore the jobs lost in 2008 and 2009, the report says.
The McKinsey report explores five trends that influence employment levels and shape how work is done and jobs are created in advanced economies:
Technology has altered how production and routine transaction work is done. Jobs created now often require complex problem solving, independent judgement and experience. With mobile technology, many jobs can be done virtually from many locations.
Jobs in advanced economies are increasingly for high-skill workers, and the mismatch between the needs of employers and the skills of the workforce is getting worse. In 2011, 26% of employers in Europe reported having difficulty filling jobs for lack of talent and 30% of about 2,000 US employers reported that they had positions open for more than six months they couldn’t fill.
Workers with desired skills may be in short supply where companies are hiring, while places with high unemployment have little job creation.
Advanced economies have growing pools of underused talent: older workers, women and youth.
The trends in job creation and employment have increased incomes in high-income households faster than in low-income households. A disparity in income growth raises concerns about living standards and social stability.
—Sabine Vollmer (firstname.lastname@example.org) is a CGMA Magazine senior editor.
In past recessions, growth came back strong. This recession, growth has been slow. Small productivity gains can offset the need to hire people during slow growth. The major crisis forced many inefficient businesses and plants to shutdown. Those inefficient high labor businesses are not coming back.