GLOSSARY: A changing workforce, economy, and climate

Next:Economy
Newsletter

The future seems to be spinning out of control. Adam Tooze calls it "the polycrisis." Recognizing what's coming is just half the battle. The other half is planning for it, and actually responding. Even if the right ideas are there, if the implementation doesn't follow, we'll be just as unprepared as if we didn't see it coming. This issue looks at a few areas where the dangers ahead are clear, but solutions lag. This is just the tip of the iceberg. Look around.

America's aging population is reshaping the workforce. We need to catch up.

For 50 years, the baby boomers (born between 1946 and 1964) have ballooned the American workforce and are now aging out. As they leave, they'll create substantial challenges to the economy, ranging from the viability of programs like Social Security and Medicare to a shortage of long-term care workers to overall slower population and economic growth. Although this was an entirely foreseeable problem, little has been done to address these issues (and some recent policy changes, such as limiting immigration, may have exacerbated the problem). As economist Kathryn Anne Edwards says in this gift Washington Post article , "It's a hydra of a numbers problem. And we're not trying to handle any of those heads."

+ "As Cases Soar, 'Dementia Villages' Look Like the Future of Home Care." (New York Times gift article)

Gig work is hot. Public benefits systems need to catch up.

The gig economy (and the number of gig workers) continues to grow, thanks to technology designed to make these systems work. And many gig workers are low income and could qualify for public programs. But the technology to determine public benefits eligibility is decades behind. As Jane Swift writes:

Consider the process of verifying income, which is a necessary step for most public support programs. It's easy enough for W-2 workers: Submit a pay stub and call it a day. But if you're driving for Lyft in the morning and shopping for Instacart in the afternoon, you might have to print out every single receipt and fax—yes, fax—them all to your state workforce agency. Every month. That's not a thoughtful way of preventing waste, fraud, and abuse. It's an outdated system that's keeping people from accessing the financial support they and their families need.

The tools are available. Alabama and Louisiana are using technology to verify income for unemployment benefits with an "income passport" that lets workers share their earnings in real time. In Alabama, the average time to process a claim dropped from nearly an hour to minutes, while in Louisiana, the wait time for workers to receive unemployment benefits dropped from three weeks to less than a day. To make these programs better serve their users (and to help the programs run more efficiently), the government needs to catch up to the technologies now available and design systems around their recipients, not the existing bureaucracy.

+ ICYMI: Recoding America by Jennifer Pahlka

+ "The 'Income Passport': Income Verification for Gig Workers in Louisiana and Alabama"

Climate change is already impacting some sectors. Those sectors need to catch up.

Sectors such as agriculture, water resources, and health are already facing indirect costs associated with climate change, triggered by factors like changing rainfall patterns and rising temperatures. Government, shipping, transportation, real estate, and insurance sectors are facing direct costs from extreme weather events such as hurricanes, floods, droughts, and wildfires, which cause property and infrastructure damage. Every business will need to take into account climate risks, whether they're physical, transitional, or liability risks. And both direct and indirect costs have a cascading effect on food security, economic productivity, and healthcare costs.

Mitigation investments such as renewable energy subsidies and energy efficiency standards have high upfront costs but help reduce long-term risk while also encouraging technological innovation and creating jobs. Adaptation investments in infrastructure, agriculture, energy, and healthcare systems—like flood defenses, early warning systems, distributed energy resources or grid modernization, and climate-resilient agriculture practices—can help reduce vulnerability while increasing productivity.

But while climate-related technology innovation is happening at an encouraging level, investment, implementation, and public policies are lagging. And that could be a problem. Deloitte analysis shows that insufficient action on climate change could cost the US economy $14.5 trillion over the next 50 years—equivalent to nearly 4% of GDP. And during the same period, nearly 900,000 jobs could disappear each year due to climate damage.

"The costs of climate change, both direct and indirect, can severely strain economies," says Iqra Munir in this Modern Diplomacy piece, "but well-designed mitigation and adaptation measures can offer significant economic and social benefits."