EuroWire March 2020

Transatlantic cable

Transatlantic Cable

Fed officials say improving labour force participation is a job for Congress, not the central bank, and although initiatives for job retraining, for example, could help match workers with the new employment opportunities, the Fed lacks the authority to launch such programmes. One beacon for the labour force is increased participation among prime-aged workers (between 25 and 54), which has seen a steady rise over the last five years and, Mr Kaplan suggests, is likely driven by immigration. Mr Kaplan stated that over 50 per cent of workforce growth over the past twenty years has come from immigrants and their children, compensating for slowing workforce growth amid the ageing population. While the Federal Reserve battles to avoid the slide into recession during 2020, the key to extending the longest economic expansion in US history could rest in the hands of Congress and fiscal policymakers. A research team at the University of Toronto has developed a super-stretchy, transparent and self-powering sensor, capable of recording the sensations experienced by human skin. The team believes its AISkin (artificial ionic skin) could lead to huge advancements in the wearable electronics, personal health care and robotics sectors. “It’s hydrogel, it’s inexpensive, and biocompatible; you can put it on the skin without any toxic effects,” said Professor Xinyu Liu, whose research focuses on ionic skin and soft robotics. “It’s also very adhesive, and it doesn’t fall off, …there are so many avenues for this material.” The researchers recently published their findings in the scientific journal Materials Horizons . AISkin is composed of two oppositely charged sheets of stretchable hydrogel substances. By overlaying negative and positive ions the researchers create what they call a “sensing junction” on the surface of the gel. When AISkin is subjected to strain, humidity or a change in temperature, it generates controlled ion movements across the sensing junction; these can be measured as electrical signals. Robotics Super-stretch technology could offer wearable soft robotics

Economic outlook

Federal Reserve’s call for more workers The Federal Reserve’s first economic forecast for 2020 asserts that labour force participation will be “the key” to US economic growth. However, San Francisco Fed president Mary Daly and Dallas Fed president Robert Kaplan agreed that policymakers need to be “humble” about whether they can improve the labour force participation rate (a measure of the total number of workers divided by the total non-institutionalised civilian working-age population). Despite a steady reduction in the unemployment rate, the US labour force participation rate has held at around 63 per cent for five years. At an economics conference in San Diego in early January, Ms Daly and Mr Kaplan said they were happy simply to see the labour force participation rate remaining steady: some policymakers have expected to see a decline as a result of an ageing population, increased automation and globalisation. “It’s been an enormous accomplishment to keep it flat over the last couple of years,” Ms Kaplan said, predicting a fall to 61 per cent within the “next couple of years”. Minutes from the Federal Open Market Committee’s December meeting show that not all Fed officials agree, with some feeling that the labour force participation rate “could rise further still”. The chair of the Federal Reserve, Jerome Powell, said on 11 December 2019 that communities suffering from the highest levels of unemployment emphasise the need for the central bank to pay attention to labour force participation. “I think that the fact that these communities have such high levels of unemployment, and low levels of labour force participation, tells you that there is slack out there.” Richmond Fed president Thomas Barkin, speaking in Maryland, said he expects GDP growth to slow to 2 per cent and believes the only way to promote faster growth is either from improved productivity or labour force participation.

Image: www.bigstockphoto.com Photographer Adrian Grosu

Beyond the Fed’s remit

Labour force participation may be the key to US economic growth, and the labour market may be experiencing a historically low 3.5 per cent unemployment rate, but the figure does not include workers who abandoned their search for a job because they lack necessary skills.

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March 2020