Economic Uncertainty and Labor Markets: Four Possible Scenarios

The U.S. economy is reeling from the instability in the banking sector, increased interest rates, and higher debt. Experts, enterprises, and individuals wonder what’s next for their jobs and pocketbooks. ??

We recently dove into the new McKinsey Global Wealth report, which discusses the challenges and opportunities the U.S. economy will face in the coming years.

The firm presented four possible scenarios for the U.S. economy in the next decade. According to the study, the most promising possibility is where the global superpower experiences a real productivity boom that drives the market higher.

In this event, the supply-chain supercycle , where the country sees massive growth in infrastructure spending and investments, will be critical for an economic boom in the U.S. in the form of strong gross domestic product (GDP) and revenue growth.

The other scenarios include continuing paper gains and low growth, high inflation, dwindling investments, and a period of economic stagnation.

Why do these possible scenarios matter to both enterprises and the members of the workforce?

Simply said, the worse off the U.S. economy, the more likely enterprises are to struggle to fill jobs with qualified labor – both due to cost restrictions and to ongoing labor market challenges such as skills shortages. In each scenario, a firm grasp of one’s workforce and the ‘levers’ available to management to maximize value, productivity, and worker satisfaction while minimizing risk and unwise investments are paramount.

Similarly, a robust U.S. economy creates a positive outlook for everyone. Organizations in the country will be empowered to scale their operations to meet higher growth targets. Moreover, they’ll innovate to supercharge their business performance.

In both scenarios, having a plan for workforce optimization and a strong future of work strategy is imperative. A blended workforce comprised of full-time, offshore, and independent labor enables enterprises to enjoy the best access to top skills and the ability that comes with a workforce that can be scaled up or down to meet business needs.

Today’s issue is an abbreviated version of a recent post by MBO CEO Miles Everson . View his full thoughts here to read a more in-depth version of this story.

If you’d like to set up a call to discuss the topic in more depth, reach out. We’d be happy to have a customized enterprise briefing on what this can mean for your firm’s labor market strategy.

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