“The demand for those jobs will be significant in the years ahead, and that’s how we’ll get to 80 percent [of tasks performed using so-called uniquely human tasks].
New Paradoxes
Davis’ conclusion is that the changing nature of work fueled by technological disruption will create four new economic paradoxes.
1) More automation, yet labor shortages
The amount of robots in the workforce will double in the next three to five years, Davis posited, yet the combination of the aging population and the strong demand for uniquely human work will mean there will be labor shortages in the U.S.
2) Labor shortages, yet low inflation
Offsets to wage inflation due to technology is lowering the cost of producing just about everything, Davis said, and the more we use technology the harder it is to generate 2 percent inflation.
3) Low inflation, yet high real interest rates.
Even though Davis said he had the least confidence in this prediction, he foresees we’ll see the same level of global economic growth and the same inflation rate in the next three years, and we’ll see higher real interest rates not because the Fed will raise rates in December and probably will be on hold for at least a year, but because productivity will slowly rise and that’s often associated with higher interest rates.
4) High real rates, yet lower short-term market returns.