I’m delighted my former macroeconomics professor, Janet Yellen, appears to be Biden’s choice for Treasury Secretary. It was long ago (London School of Economics, 1979-80), but her crystal-clear and dispassionate explanations of macro principles still stick in my mind today.
More relevant, of course, was her performance as chair of the Federal Reserve, which won near universal praise, both in the U.S. and abroad. As a professor, she taught that lower unemployment would lead to rising inflation—the fabled Phillips curve. But as head of the Fed, she was willing to abandon theory when the evidence for it collapsed. She cares deeply about the fate of left-behind workers and laid the groundwork for the monetary policies of her successor, Jerome Powell, that helped those workers in the years leading up to the pandemic. At Treasury, she will have a broader range of tools to both keep the economy growing and help those left behind. Teamed with Powell, they should give business and markets confidence that steady hands are on the tiller.
Separately, there’s a report out this morning from the McKinsey Global Institute shedding new light on the future of remote work. It finds that 20% of the work force in developed countries can work remotely 3-5 days a week as effectively as if they were working in an office. That suggest three to four times as many people may work from home in the future as did pre-COVID.
The effect varies by industry and country. Finance and insurance have the highest work-from-home potential (76% without any productivity loss), which is why the U.K. also ranks high (33% without productivity loss.) The U.S. comes in at 29%, while China is only 16% and India 12%.
The flip side of that story is that more than half the workforce in every country—including 61% in the U.S.—don’t have an option of working from home, because their jobs involve handling equipment, moving objects, selling, teaching, caring for others, etc. One side effect is that remote work “may increase gender disparity,” the report says, because “the female workforce in many economies is more highly concentrated in occupational clusters like healthcare, food services, and customer service.” You can read the full report here.
More news below. And check out my interview with Beyond Meat CEO Ethan Brown, who is determined to wean the world from meat. He’s making some surprising progress—including in China. You can listen on Apple or Spotify.
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