Tepid Job Growth Spreading to Developing Economies

“That catching up was somewhat lackadaisical: the gap closed at just 1.5% a year. From the late 1990s, however, the tables were turned. The researchers found 73% of developing countries managing to outpace America, and doing so on average by 3.3% a year. Some of this was due to slower growth in America; most was not.”

Now, however, while the shift to emerging markets will continue, its most “tumultuous phase seems to have more or less reached its end,” the magazine argues. “Growth rates in all the BRICs have dropped. The nature of their growth is in the process of changing, too, and its new mode will have fewer direct effects on the rest of the world. The likelihood of growth in other emerging economies having an effect in the near future comparable to that of the BRICs in the recent past is low; they do not have the potential for catch-up the BRICs had in the 1990s and 2000s.”

And, it adds, the BRICs’ growth has changed “the rest of the world economy in ways that will dampen the disruptive effects of any similar surge in the future. The emerging giants will grow larger, and their ranks will swell; but their tread will no longer shake the Earth as once it did.”

While developing economies still create “hundreds of millions of new workers in coming years,” the numbers will be tempered by aging demographics in many countries, specifically China.

“India, with more favorable demographics, is struggling to create enough employment; it added no net new jobs in 2004-2005 and 2009-2010,” it concludes, citing a recent survey. “Big demographic booms are brewing elsewhere: Nigeria, for example, may be more populous than America in less than 40 years. But such growth will have its peak impact only decades from now.”