Emerging markets like China and India will get old before they get rich

Also, employers who provide childcare, fertility and family benefits at the workplace will prosper. Diversity and inclusion in the workplace will be driven by Gen Z – the most diverse generation ever – 22% of this generation has at least one parent who is an immigrant. The gender pay gap, widening before Covid, if closed, could unlock economic benefits and boost global GDP by trillions of dollars. gig economy A disruptive innovation is but not a panacea for the labor market.

These are some of the findings from the Demographics Primer prepared by Bank of America’s global research team.

growing old

Emerging markets are getting old before they get rich. EMs are where aging is occurring most rapidly. By 2050, EM will be home to approximately 80% of the world’s population aged 65 and over, of which more than 23% is due to China alone. Yet, only 30% of workers in emerging markets are covered in some form. retirement income plan. EMs face a pension savings shortfall of $106tr as their population ages, 3x their total GDP.

Each employee has a pension gap savings difference of $40,000. Pension funding is even more challenging for these countries, as they lack developed welfare systems, generous state pensions and strong individual resources. Structural trends of a smaller labor force, lower interest rates and a deteriorating fiscal balance all jeopardize pension viability. The retirement savings gap highlights the need for personal finance backed by insurance protection.

future of work

The future of work includes workplace childcare, fertility and family benefits. Employers that support access to affordable and quality childcare will prosper as it ensures children have access to early childhood education and address the specific challenges parents face.

Fertility benefits, such as IVF and paid surrogacy, are becoming increasingly common in employee benefit packages. In the US, between 2019 and 2020, there was a 500% increase in employers adding family-building benefits, with some employers offering up to $200,000 to cover the cost of family-building. Independent providers of fertility benefits management for employers will benefit from the booming fertility market.

Diversity

Many Diversity, Equality and Inclusion (DEI) factors already affect the global economy, ranging from those related to race, gender, disability and more. Cultural and institutional constraints and gaps exist within these social groups. Unlocking them can provide substantial economic benefits and reduce some of the challenges related to aging, which can reduce the workforce.

It will take 267 years to reach gender equality in education and employment by 2021, but flexible working practices, supportive employment laws can help.

The cost of not addressing these gaps is already high. gender and racial prejudices

Labor market inequalities further limit the economy. The poor DEI has cost $70tn since 1990: closing the gender and race gap would have generated $2.6tn more in economic output in 2019 and the cumulative benefit from 1990 would have been c.$70tn.

While the freelance work or gig economy is here to stay, it is not a panacea for labor market problems.

The gig economy is disrupting the traditional world of work. But workforce participation is expected to change, as some adopt a hybrid style or even go out of work altogether. There will also be a structural change in the way participation is done, from a 9-to-5 routine to a freelance model (‘gigs’), and COVID has helped accelerate this trend. About 162 million or 20–30% of the working-age population in the US and EU are believed to be engaged in “independent” work.