When it comes to the labor shortage in the United States, Microsoft President Brad Smith sees the country entering a new era of work. Between fewer people entering the workforce and increasing pressure to raise wages, the U.S. economy could be permanently altered. Since 1950, the U.S. working-age population has grown by roughly 5 million per year, whereas that number has fallen to about 2 million between 2016 and 2020. The labor shortage has been exacerbated by COVID-19 concerns and childcare struggles, among other issues, leading to a cutthroat competition to win over top talent.
Smith believes that Microsoft’s business productivity tools, cloud services, and AI-driven technology can bolster the company during times of economic challenges. While his company recently slowed hiring, it also increased compensation—while also cutting a small percentage of jobs. U.S. Department of Labor data has reflected the raising of wages and hiring of more workers than expected, but labor force participation has dipped to just over 62%. Although some tech execs, such as Meta’s Mark Zuckerberg, have declared that a recession is here already, Smith is still reluctant to say that a recession is inevitable.