At the software maker’s headquarters in Redmond, Washington, Smith singled out one of the sources for what he called today’s economic turbulenceIn his office, he walked over to a wall-to-wall touchscreen device and opened up a series of charts showing how population growth had plummeted in United States, Europe, China as well as Japan.
The trend of the U.S. working-age population increasing by about 5 million every five years since 1950 has reversed from between 2016 and 2020, when growth slowed to 2 million, and is now slowing even more, Smith said late last week with link to the United Kingdom. Nation data. Major overseas markets are seeing a sharp decline in the workforce.
“This helps partly explain why you can have low growth and a labor shortage at the same time. There just aren’t many people in the workforce,” said Smith, who helps control a company that sells almost $2 trillion. cloud computing services for large businesses.
Government stimulus during the pandemic, concerns about COVID-19, child care and other factors have also contributed to the current labor shortage.
Executives, including Mark Zuckerberg, chief executive of Meta Platforms Inc., Facebook’s parent company, have recently been worried about the economy. Zuckerberg warned that the United States could face “one of the worst recessions we’ve seen in recent history,” though Smith said it would be premature to declare a recession imminent.
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Competing for a limited number of workers, Microsoft recently raised wages while slowing down hiring, company officials said. The software maker also cut a small percentage of jobs tied to the start of the new fiscal year.
Smith said Microsoft’s business of selling productivity tools, cloud services and artificial intelligence technologies that businesses may need in an economic downturn is putting it in economic trouble. The company recently faced antitrust scrutiny in Europe, and Smith said Microsoft has until October to “complete implementation” of the changes it promised.
Labor Department data for June showed that employers generally continued to raise wages and hire more workers than expected. However, labor force participation fell for the second time in three months to 62.2%, which does not show
improvement from the beginning of 2022.
Population growth has become a hot topic in the tech industry. CEO of Tesla Inc. Elon Musk, who reportedly has nine children, including newborn twins, has paid particular attention to the low birth rate in the US. “Doing my best to help end the population crisis,” he tweeted.
Smith said he agreed with Musk, “maybe in the problem. I do not recommend the same solution.”