The World at Work: Jobs, Pay, and Skills for 3.5 Billion People
A recent report entitled The World at Work: Jobs, Pay, and Skills for 3.5 Billion People, released by McKinsey Global Institute (MGI) identifies forces of supply and demand that are shaping a global labour force that will ultimately grow to 3.5 billion by 2030. In the report, MGI has documented these shifts and analyzed the implications for workers, national economies and businesses.
Key findings and insights outlined in the report include:
- Global Labour Market
Over the past three decades, the industrialization of developing economies, as well as rising trade and immigration have all helped to bring about a more integrated global labour market. But recently, strains have become apparent, particularly during the slow recovery from the Recession. Demand for highly skilled workers is up, with an increasingly large amount of low skilled workers facing a shrinking pool of job opportunities. Long term unemployment is also becoming more common, and across advanced economies youth unemployment has risen to 18%.
- Labour Supply and Demand
In the future, the dynamics driving the global labour market will evolve. The most significant change will be slower growth of labour forces around the world. Declines are most likely to be seen in aging economies—which now include China. As the labour force in China slows by about half, India and the "Young Developing" economies of South Asia and Africa will become the biggest sources of labour force growth. The effects of aging and slower labour force growth include a heightened need to raise productivity.
- Where the Gaps Are
If current trends persist, advanced economies in particular, could face severe and widespread skill shortages and the prospect of heightened low skilled workers. MGI projects that by 2020, the global labour supply will potentially have up to 40 million too few workers with tertiary education and 90-95 million medium to low skilled workers. Repercussions include: high levels of unemployment, falling participation rates, widening income polarization, millions of workers trapped in low income jobs, and heightened social tensions.
- A Global Agenda for Skills and Jobs
The global economy faces two significant labour market challenges including heading off a potential shortage of highly skilled workers needed to maintain growth and productivity and also finding ways to create employment opportunities for a rising number of low skilled workers. National governments and businesses will need to formulate long term plans to address both supply and demand issues.
By the numbers
- 1.1 Billion: Non-farm jobs created, 84% of which will be in developing economies
- 245 Million: Increase of college graduates in the labour force
- 40%: Share that foreign-born workers contributed to labour force growth in advanced economies
- 1 in 5: New non-farm jobs in developing economies associated with exports
- 75 Million: Unemployed young workers (15-24 yrs) in 2010
- 3.5 Billion: Projected 2030 global labour force, up from 2.9 billion today
- 38-40 Million: Potential shortage of college educated workers in 2020
- 60%: Share of Indian, African and other South Asian nations in global labour force growth
- 360 Million: Additional mature population who are not part of the global labour force by 2030
Download the complete report from McKinsey Global Institute (MGI) here.