Economic Outlook Debate

[00:00:00] Speaker ?: . . . [00:00:27] Speaker 1: Good afternoon, everybody. Good afternoon, everybody. Welcome to our general economic outlook panel discussion after hearing from Chief Economist Lawrence Boone an overarching overview of the outlook that was just released half an hour ago, and there are lots of themes I want to explore in this panel today. It's a pleasure to be here again. I hosted the same panel exactly 12 months ago. The world is looking a little bit different then. Certainly, central banks have turned a lot more dovish. There's a lot more accommodation in the air. But there's another story that's been gripping global attention, and that is of the trade war, and that has come up time and time again. And as we just heard from Lawrence Boone as well, it has affected the OECD's economic outlook. Just before we start, I'd like to introduce all of our panelists today. Needing no introduction, sitting on my left is the Secretary General, Angel Gurria. So thank you very much. We will be starting off the panel shortly with yourself. We also have Nadia Kavinov, the Spanish economy minister. It's a pleasure to see you and to have a discussion with you as well. And sitting on the left, we have Mr. Ankal Vila. Oh, to your left, Mr. Ankal Vila. He is the COO of Telefonica. And a last-minute addition here, I have to say, due to unfortunate personal news, the CEO had to pull out. So I'm going to save all my really difficult questions for you, Mr. Vila. And then we also have Richard Trumka, the President of the American Federation of Labor Congress of Industrial Organizations and the Trade Union Advisory Committee to the OECD as well at the very left. And last but not least, right in the middle, we have Jacques Van der Broek, the CEO and Chairman of the Executive Board from Randstad as well. So I just want to kick off. I mean, the theme of this year's confidence is World in Emotion, which is quite a catchy title, I think, because it has multiple layers, multiple meanings. It's not just about emotion as in things are changing and evoking emotions, but it's about a world that is moving, it's creating disruptions, and it's also moving E, it's digitalizing. So these are some of the longer-term themes that we're going to be talking about on the panel today. But also, because it is World in Emotion, let's embrace social media. So you may see that we've got a couple of hashtags for you to get involved in the conversation. You can hashtag OECD Forum, or if you're French, you can hashtag Forum OCDE. And you can also engage with @OECD or @OCDE_France. And if you want to engage real-time in the discussion, send us questions, you have it be cast as well. So without rambling on a little bit further, I want to start off with the discussion with our esteemed panelists. Mr. Guria, I just want to start very briefly with you. You know, we just heard the overall picture right now from Lawrence, and your outlook has been slashed to 3.2% for this year. A little bit lower, actually significantly lower than where it was last year. Would you say that the predominant driver here is the tensions that's coming out of these trade discussions between the U.S. and China? [00:03:41] Angel Gurria: Yes, absolutely. I mentioned the slowdown of the Chinese economy, but perhaps as a consequence, and then the question of the financial sector risks. But if I had to just name one reason why are we in a slowdown situation, I would say very clearly because of the trade tensions. Now, Lawrence Boone already, since the end of last year in November, she was projecting this much slower growth. And then I said, Lawrence, listen, last May, that means five months ago, six months ago, you told me we were going to be growing at about 4%. Why is that? You know, we are the OECD. We are supposed to be a big ship. Big ships move slowly, you know. They don't suddenly change course like that. He said, oh, it's very simple. Everything that could go wrong has. No? No? Why? Well, because this logic. And let me just repeat. Why do you invest? To produce. You produce. You produce to sell. If you don't know if you can sell at all or at what tariff you're going to sell, you don't invest. And if you don't invest, the rate of growth drops. This is exactly what is happening, except with a vengeance, because it got worse than we thought. And it may, may, hopefully not. Knock on wood. It may get worse. And if it gets worse, it's not just going to be about the direct impact that you can model. It's going to be about the consequences on investment, yes, but also on confidence. The uncertainty that is created by these trade tensions is very difficult to measure. It's very difficult to establish in a model, in a formal projection. But it exists, and it's happening every day, and it's hurting us every day. And when you say, maybe in six months' time I will increase or not increase the tariffs for something as sensitive as cars, which will affect dozens of countries around the world, then you're basically introducing a six-month hiatus on investment decisions. Not only in one sector, i.e. cars, but in dozens of related sectors that depend on this very important trade. So, yes, I would absolutely say it is because of the trade tensions, and because we've chosen to resolve them by tariffs rather than by negotiation. [00:06:47] Speaker 1: All right, Nadia, I'd like to pose the question to you as well. And talking about Europe, again, one of the big downgrades this year from the OECD came to Europe. The eurozone growth forecast has been slashed, particularly, I noticed, for Germany. But what's interesting about your country, Spain, is you've been relatively immune to some of the slowdowns seen across the broader, more broadly speaking, within the eurozone. What do you point that down to? Why is Spain a relatively bright spot, and how long could it last for? [00:07:17] Speaker 3: Yes, first of all, I think that it should come as no surprise that Europe is suffering very directly from this uncertainty and the trade tensions that Angel was referring to because of the manufacture and export orientation of our economies, in particular Germany, but not only. And thus, the direct impact that this kind of situation is having on investment and consumption in the sense of, you know, foreign consumption, trade, etc. So, it has not come as a surprise. Let me be a bit less downbeat. Thursday and Friday, we had our ECOFIN and our Eurogroup meetings. And I must say, the atmosphere was a bit more optimistic, mildly optimistic, than in previous meetings. The European Central Bank, the European Commission, the German Finance Ministry, all of them expect activity to pick up in the second part of this year, and the prospect is a bit more positive for 2020. Also, the OECD prospect is a bit more positive. So, you know, I think that we have to, the glass may be half empty or half full, but let's hope that it may start to fill up again, you know, and not everything that can go wrong will continue to go wrong in the coming months. Now, in this context, you're right to point out that Spain has proven to be extremely resilient. We have been quite lucky to have a strong domestic demand, which has picked up when the external demand was slowing down. Also, our growth model in the last years has been more balanced than in the past. Current account, surplus, net lending position vis-a-vis the rest of the world. And so, we have been able to couple domestic and foreign demands nicely. And I think that a key element here to explain this, and Angel and Laurence have referred to it, is employment. Employment growth has been very robust in Spain, 3% year on year. It continues to be quite robust in the first quarter of this year. And this is a key feature because it links directly to household available income and consumption. You know, to be able to be dynamic, but also investment is continuing to be quite dynamic. So, there are a number of elements that explain this resilience. But let me finish with a very important reflection, and I think it's good that the OECD is looking beyond the short-term prospects and the macroeconomic environment. I think it's good that we also look at the more structural features that are determining growth in the coming years. The digital revolution, technological change, also climate change, demographic challenges. These are all very important elements, and inclusive growth. The fact that we need to make sure the growth is not only robust, but also shared, that nobody is left behind. Otherwise, our citizens are not going to continue to support the growth model that we've had, international trade, etc. We need to make sure that we also look at the distributional elements within society. At least this is what we've been trying to do for the last 12 months when we took office in Spain. And I think that this is a very strong program going forward that should be indispensable, I think, if we want to pursue the reinforcement and the reform and the strengthening of our model, but also a protection of this model that has served us so well for the last 50, 60 years. [00:10:37] Speaker 1: Absolutely, and we'll talk about some of those longer-term themes. I just want to take it back to the state of the economy today. And, Jacques, I'm going to pose this question to you because you run a business that entails global hiring trends. So I'm very curious to see, from your perspective, how businesses have adjusted to this new world of uncertainty, to quote Mr. Gurria, where consumers don't know how much goods are going to cost them, businesses don't know how much they're going to sell their goods for, or how much it's going to cost them to actually make their goods because of the tariff effect. How has that affected business decisions and also hiring decisions as well? [00:11:15] Speaker 4: Yeah, absolutely. Well, let me pick up on your sentiment to use this forum as a glass more than half full. Because everything you mentioned is man-made. So it can also be undone, so to say. It can be fixed. So the economy which is doing relatively the worst in our book is the German economy. One in eight jobs is related to automotive. And we see a huge lowdown there because of uncertainty. There's nothing structural about it. So that's good. And uncertainty is the key word for, also for people in the street. They think that digitization will pick up, will pick jobs, will destroy jobs. Well, that's actually for a little part true. The overall sum on we issued the report yesterday is going to be more jobs. But at the same time, massive re-skilling, by the way, regardless if you are in a fixed job or in a temporary job. To Spain, Spain is doing very well. But that is, and congratulations on the elections, by the way. But they've been doing well because they reformed the labor market. And they reformed the labor market in the wake of a more than 20% unemployment. So, have it all due respect, but you weren't there, right? Too late. And I think we need to, as countries together, undo and change and modernize. And we need to do it together. I think that's the value of the OECD and also this forum. It's public and private partnership. So, there is uncertainty. We don't see it worsening. We're early. So, already before last year's summer, we saw weakening in Germany. Even before, the OECD was still optimistic. Yeah, the glass was very full. And since Q4, Q1, it's not sliding further. Although, it being man-made, it can be undone. [00:13:06] Speaker 1: Interesting, that comment on man-made. And I just want to point out that Mr. Greer is actually filling a glass now, slightly more than half full. So, there we are. We're only 15 minutes into this discussion and he's already buying the theme. So, I'd like to move on to the gentleman from Telefonica, Mr. Olya. And I know this is a last-minute addition to the panel for you, so I'm going to go a little bit easy on the questions. But I'm curious to hear from Telefonica's perspective, again, how the business environment is playing into your business. And I was chatting to somebody yesterday who said that the next step of this trade war is a tech war. And obviously, that has implications on the telecom industry, which is obviously the Telefonica industry. How are you thinking about the world today? [00:13:58] Speaker 5: Well, first of all, I would like to excuse my executive chairman on being able to be here today. It's an important personal reason. Second, to the question, we are in a sector which is at the heart of the digital revolution. We are in the middle of a change of paradigm. We are in an accumulation of technology that has been unprecedented in history. And connectivity is at the heart of this revolution. The chief economist was saying that in the OECD only one out of 14 citizens have access to fiber. This is something that has to change. And it's actually changing in those geographies that are having policies that promote pro-investment policies. Policies that allow for return on the investment that you make. This figure in Spain, instead of one out of 14, it's four out of five premises or homes have fiber passed to the home. And this is the result of investing at the time, which was not easy, because it was around the Euro crisis. We started a very strong investment in fiber back in 2011. We went through 2012, we had to take some difficult decisions. But as the secretary general was saying as well, if you do not invest, you do not see or plan the seeds for future growth. So now we are going to be facing a big change, which is the move from 4G to 5G. 5G is a new technology that allows for more speed, the time to download an episode of your favorite series will go down from two to three minutes to two seconds. It's a technology that will allow for much more capillarity of devices. With 4G, you can have 10,000 devices per square kilometer. This in 5G will lead to one million. This means much more capacity to have internet of things, smart cities and so on. It also will reduce latency in the time to react for the network, which is what is needed for autonomous driving cars, connected cars and other applications. In order to be able to make this transition, which is going to entail lots of investment, we need to be very factual on situations like the one arising on the technical or on the tech front from the trade war. The main European players around the GSMA have been assessing what are the true implications of alleged potential security bridges of some technologies or some technological suppliers. And we have not been able to find any such bridge. It's very important because security is at the heart of what we do. Security is at the heart of what a telecom operator, an operator in connectivity has to provide to the customers, to the administrations that have given the concessions. So it's something that we cannot trade. If there is any fault, that would be binary. We would act immediately. And none of the operators around GSMA have found such type of bridge. So this has to be factual. And the implications of any restriction on the supply chain or on certain suppliers would have deep implications for the development and investments in 5G. On the cost that it would represent for customers across different geographies to have access to ultra high speed connectivity, it would also delay those deployments. And it would allow us to act and propose to multilateral institutions such as the European Union, common testing grounds, common certifying grounds to make sure that the technology is safe and is not linked to other types of trade disputes that could have the technological development as part of the collateral damage. [00:18:49] Speaker 1: So, to recap that, two very interesting points you raise. One is the cost of innovation. And here we talk about economic costs, but also in some cases a security cost. And the second point is that of global cooperation. So we'll talk about that shortly. I just want to continue and speak to Richard, sitting patiently right at the end there. And we were also on the same panel 12 months ago, Richard. And back then we were just right at the beginning of this trade war between the U.S. and China. The U.S. had just applied steel and aluminium tariffs. Since then we've had another round of tariffs between the two sides, between the U.S. and China. But not everyone thinks that tariffs are bad. If you look at manufacturing jobs in the U.S., they've actually increased over the last 12 months. The president's stated aim was to create more manufacturing jobs back home. Given your line of expertise, would you say that for some people putting up these tariffs has actually been a positive thing in terms of job creation? [00:19:50] Speaker 6: Yeah, I think you can make that argument. Sometimes there's a perfect use for tariffs. Tariffs can be used whenever somebody's violating an agreement and refuses to live by the norms, the fair norms of trade. And so imposing tariffs can have a real positive effect on correcting their conduct. The misuse of tariffs can lead to other mischief that you've outlined. And while there's been a lot made of the tariffs and the uncertainty and the outlook, I want to add another dimension to it, if you don't mind. First of all, I applaud the OECD for the outlook. Because I really do believe it's a fair read of the facts that we currently face out there. It says global economic growth is going to slow and doesn't look like it's going to be picking up. And you particularly on how you looked at the trade uncertainty and said that's the real reason. But let me pose another reason, if you wouldn't mind. The global economy, the demand is 56% driven by consumer spending. In the United States, the economy is 72% driven by consumer spending. And while the report, the outlook, spends a lot of time talking about weak demand from the business sector, low orders for industrial products and important capital components like semiconductors and fixed investment, there's very, very little attention paid to consumer demand. The outlook points to rising labor participation and rising employment, but pays little attention to labor share of the economy. And the reality is that labor share of the economy has fallen precisely because while productivity was rising, wages were not rising. In fact, in the United States, 62% of people haven't seen a raise in over a year. And so demand, if 56% of the driver can't participate because wages are stagnant or falling, or in the United States, 72% can't participate because wages are standing or falling, we have to do something about that. And at some point, for aggregate demand to return to healthy levels, it's going to be driven by working people getting their fair share. And I was proud to hear the minister talk about that and the attention that's paid to that. And, Angel, I want to compliment the OECD on the future of work and the attention you've paid to providing collective bargaining so that workers can get a fair share. The reality is, though, at some point, wages are going to have to rise faster than productivity if we're going to close the inequality gap and restore healthy demand. And so while trade is truly an important part of the equation, so is workers' wages and labor's share of the economy. Because without it, I think those two dimensions, 56% of the global economy and 72% of the U.S. economy can't participate at healthy levels. [00:23:25] Speaker 1: And I want to follow-up to that, Richard. How would you say workers are today versus exactly 12 months ago when we were sitting here having this conversation? [00:23:34] Speaker 6: Well, they haven't gotten a raise even though productivity is going up and inflation is going up, so they sit backwards. They're not moving forward. In fact, at the height of the business cycle in the United States, wages did not keep up with inflation-adjusted productivity. So wages fell behind at the top of the business cycle and inequality expanded during that period of time. That means that we have to pay more attention to labor's share of the economy and income. [00:24:08] Speaker 4: Yeah, so we're also in that labor market. I agree and I partly disagree, but it's always nice in a forum like this, I think. Because we do see a lot of labor shortage in the U.S. We do see wage increases at around 3%. The bigger issue we see is, call it, the multi-forms of labor, where we do see people being in sort of a gray zone, being left behind in sort of bogus self-employment, gig economy. And, you know, that plays on the average and the informal work. And that's a big issue. I think we need to, and that's also in the future of work, we need to embrace these multi-forms of labor. And we need to invest in people and also in their salaries and make them insured and be able to have a mortgage, even though they're not employed in what's still called, but I think that's old, irregular jobs. And I do think that together with trade unions and companies, we need to create a situation where everybody has a seat at the table. And we need to, in that sense, reinvent social dialogue, not just for the people who are in a regular job, but also people who are in other forms of jobs. Because that's increasing to above 20% of the total workforce and we need them and we need to scale them. [00:25:30] Speaker 6: We would embrace that wholeheartedly. In the United States, only 12 and a half percent of the workforce is actually represented by a union. Billions of dollars are spent every year by employers to prevent workers from having that voice and to be able to engage in collective bargaining and having that social dialogue. And unfortunately, when we find progressive companies coming from Europe, Scandinavia and other places around the world that do have that engagement and social dialogue with their workers, and when they reach the U.S., they get amnesia. They forget about all of that great dialogue and investing in workers. And instead of treating us like assets to be invested in, they treat us as costs to be cut. [00:26:19] Speaker 4: Well, let's join forces then. [00:26:22] Speaker ?: That's a deal. [00:26:23] Speaker 4: We're both from Europe and Scandinavia, so that's good. [00:26:26] Speaker 1: Excellent. Minister, I'd like to bring it back to you. And I'm quoting off the top of my head here, but I read on the second or third page of the economic outlook. I thought there was a very interesting line about Europe. And there was a proposal by the OECD and they said that if Europe engages in structural reforms to the tune of about 0.2% a year for the next couple of years and loosens fiscal spending just to the tune of half a percentage point of the next three years, that could be growth additive of 1% over the next three years, I think as well. If I'm misquoting, but the point is, it doesn't take that much. You just need to do a little bit on the structural reform side, perhaps spend a little bit more, and you are looking at GDP potential, lifting GDP potential by about 1%. Why is there so much hesitation in Europe to do that? [00:27:15] Speaker 3: It's a very good question. Thank you very much. I mean, the structural reform front, I think, is easier to deal with because there is a widespread agreement that we need to, for example, embrace the ecological transition. I think that we cannot have an ostrich approach here of trying to ignore it and then wake up one day and realize that we're too late. And if we, I mean, we in this room, I'm sorry to say we are of a certain age, but kids who are 14, 15, they're not going to allow us not to take measures now because it's their future and they're very well aware of that. So, I think that we need to drive this process, at least in Spain, we're absolutely determined to drive this process and to transform the challenge also into an opportunity. New jobs, large investment, you know, new opportunities, circular economy, etc. That's one area. But obviously, the digital transformation is also requiring us to do structural reforms in terms of education, upskilling, you were referring to it, long life learning, the new types of jobs. So, I think that there's widespread agreement that we need to do them. But there are different specificities in the different countries, let's see, but that I don't think is such a contentious front. Now, when it comes to fiscal policy, I think that setting the rules is very complicated and changing them is even more so, because there are so many different views on how to articulate fiscal policy at the national level. And also different views on how the euro should play as a supporting factor, as a stabilizing factor to support national budgets in providing this stable framework and fiscal policy having a somewhat counter-cyclical role. There are very different views on this, but I think that we're making progress and I think that more important than changing the rules is applying them in a smart manner, ensuring that we continue to reduce fiscal deficits because we need fiscal space, but we do not endanger growth. In so far as Spain is concerned, we have sent to the European institutions a stability program which very clearly along those lines, we want to be ambitious in reducing deficits and sovereign debt compared to GDP, we need to create that fiscal space, but we also need to keep growth robust, employment creation robust, and we need to protect our welfare state. And I think that, as I was saying before, and I think that's maybe the key message that I see more and more coming from also international institutions, is you also need to ensure that welfare and citizens' well-being is taken care of. Because otherwise, we're going to find ourselves unable to do these structural reforms which are needed if we want to make future a success, you know, and this whole transformation a success for the next generations. [00:30:29] Speaker 1: Mr. Gouria, I'd like to pose the question to you as well. Just from the angle of global cooperation, how important is it to make these decisions through a multilateral framework as opposed to each country going at it alone? [00:30:46] Angel Gurria: Mr. Gouria, how important is it to make these decisions, to make these decisions? Mr. Gouria, I think we're talking about international trade, but international trade. How do you deal with international trade? How do you deal with international trade if not internationally? We're talking about a global issue. How do you deal with a global issue if not globally? With global solutions, with multilateral solutions? This is a world that has been integrated now practically fully with digital. I mean, it's going to become a little wrapper, you know. It's all going to be contained in a handful. How can you not integrate the solutions? So basically, what we're doing is we're going suboptimal knowingly. Because global issues, trade, yes. But how about investment flows? How about climate? How about migration? They're just like pandemics. They don't know. They don't know. Viruses don't know the border. You know, they don't stop at the border. Huh? The same thing is with all of these issues, you know. By definition, migrants went across the borders. And already in the U.N. Compact on migrants, 50 countries opted out. 50. One quarter of the world's countries chose not to participate. So it's not just about tomorrow and the trade between China and the United States. It's just that we are opting out of multilateral at our peril, at our risk, knowing that it is second best. So we will get second best results. And the problem is why should we condemn the next generation? You talked about the intergenerational responsibility. You know, why should we condemn the next generation to second best world when we can provide them with the real thing? [00:33:09] Speaker 1: I actually want to pose a question to Richard on the back of this because I think most people in the room would agree that, you know, the longer term challenges of, you know, the green revolution, climate change, digitization are all challenges that we need to embrace and we need to prepare for. But the experience and especially the experience in this country in France is that the second you try to go too far down the road of reform, there will inevitably be some form of backlash, especially to the people who feel left out. My question to you, Richard, is how should policymakers think about the trade-off between some of these long-term goals and introducing necessary reforms, but also bearing in mind that there are people who are at the very bottom of the ladder who don't even have a chance to get on the ladder to begin with? [00:34:04] Speaker 6: Well, I'll work from the micro to the macro on that question. Of course, when people feel left behind, there's going to be a backlash. And that's a healthy sign of democracy. Letting people know when a large segment of your society is being left behind. Look, we faced digitalization and change in the past on a number of different occasions. We used to have scores of telephone operators. And then we got digital things and telephone operators went by by. The mining industry that I worked in, it was all manual and then they mechanized the industry and the workforce went down. So it's not really digitalization that's causing the low labor standards. It's instead, I think, the tolerance for low labor standards in the country. And, Angel, this is one place where the OECD has a little bit of responsibility to bear because over the years you've preached labor flexibility. And what we have right now in the world is a worldwide imbalance between the power of employers and employees. Employees' power is too weak. Particularly the low skilled people down at the bottom, they're even less, they have less power. So that meant you were switching the labor flexibility with saying to do the following. Like gig jobs and jobs uncertainty are really not the result of that technology, but the result of an imbalance in those labor regulations. Because rather than promote and push companies to compete on the basis of investment and rising productivity, flexibility pushes companies to compete on lowering labor costs. And as a result of that, a lot of people got left behind. I'm proud to say one thing. In the United States, other than the military, the U.S. labor movement skills more people every year than any institution in the country. We skill and re-skill people. Now, I want to applaud you for your work on digitalization. And you just did a report a few weeks ago of the new future of work. And I want to remind people what it said. It says that we ought to have a rights-based transition approach to the future of work. A rights-based transition to the future of work. That's magnificent. Policymakers should address misclassifications of workers and extend workers' rights to everybody. So those people that get left behind have a voice and can actually make their voices heard either through peaceful protest, at the ballot box, or any other way to elect people that are going to stand up for them. What we don't see right now is a system that does that. And here's the question that I pose. The AFL-CIO has been going through a future of work for a year and a half. Saying how the economy is going to evolve, how work is going to evolve, how labor unions have to evolve, and how the federation has to evolve. When technology is introduced into a workplace where there is collective bargaining, we have always been able to negotiate for a fair share of that increase in productivity. We negotiate to make sure it's not unsafe. We make sure that it is healthy for workers. We do all of that. But society in general doesn't have a mechanism to allocate the benefits and the increases in productivity. So the question becomes, what mechanism do we create or how do we make sure that those increases in productivity that result from increases in robotics, artificial intelligence, and technology are shared equitably by society? And I'll give you just one example if you wouldn't mind. Let's assume you have a small community and it has one factory in it. And one factory employs a thousand people. That thousand people, their income fuels the schools, fuels the local government. Robotics comes in and replaces 500 of them. So now the tax base is cut in half. Services from the government are cut in half. What do we do as society to make sure that the stakeholders, that community, those schools, that state, that nation, share equitably in the benefits of increased technology, and digitalization as you call it? Because if we don't do that, the protests will get louder and louder. And a system that is incapable or unwilling of providing a rising standard of living for the vast majority of its people will get changed. One way or the other, that system will get changed. And that is the pressure that's going on right now. It's actually an assault on not just the workplace, but on democracy itself. [00:39:56] Speaker 1: Just in terms of a practical solution to that, would you say the redistribution would entail taxation at a tech level, a higher taxation at a tech level, as well as reevaluating the social contract to reflect that new reality and the fact that a lot of these jobs will be automated in the future? [00:40:17] Speaker 6: I think it's a combination of things. You can't just pull one thing out and say that's the solution. Look, we've been told for years that the economy is like the weather. There's nothing you can do about it. But I joined my friend in saying this is man or people made. The economy is nothing but a set of rules. Those rules decide the winners and the losers. And for too long, the losers have been working people. And the winners have been a very small band at the top. Yes, those all have to be changed. Taxation. Trade policy. Trade policy should encourage the increase in the living standard on both sides of the border. Take the U.S. and Mexico. We were told that NAFTA would increase the standard of living for Mexican workers. It did not. And as a result, everybody got hurt. American workers got hurt. Canadian workers got hurt. And the Mexican workers got hurt. Those workers are not the enemy of the American worker or the Canadian worker. They are fellow workers trying to make a living. And so you need to combine all of those and change the rules so that I get back to the first point I made. So that the labor share of income in the world actually increases to a healthy level rather than continues to decrease. And the level of inequality between those at the top and the bottom increases. [00:41:40] Speaker 1: Jack, you wanted to intervene. [00:41:41] Speaker 4: Yeah, well, there is, of course, I call it a mechanism that redistributes the benefits. And it's called taxes. We discussed it yesterday, Mr. Gurria. And there's also consumers. You mentioned consumers. But the last thing is shareholders. So I think there's increasingly a movement among shareholders, BlackRock as a beginning, who said that what are the kind of companies that they want to invest in. So that's an important point to make. By the way, the most, and I disagree here a bit with the OECD, the people who fall victim of digitization is less people at the bottom end of the labor market. It is actually a lot of people in the middle segment of the labor market. That is the most destabilizing factor because these people call it the middle, the middle ground. They are the basis of our foundation, the basis of taxes and pensions and that sort of thing. And they are bank managers. They are civil servants. They are. And that's a big issue. Once people at the bottom end of the labor market have a good position, have bargaining power and are not in the informal sector or the bogus freelance, they are. But they fall out of the system. And that's also what I would like to say to governments. There are a lot of countries with huge informal sectors and governments should sanction what goes on there and work with unions, with the likes of us, to regulate these sectors. There is still going to be a huge demand for blue collar workers in a digitized society. You need to reskill them. The jobs are a little bit more skilled, but they can move up. They've always done that. A worker in an automotive plant is now what used to be called a mid-level worker 10, 15 years ago. So people can move, but we need to do it together and not leave it to the side. And then finally there's consumers. Consumers are getting free delivery, free returns, free meals delivered. And that gig economy is sort of, you know, stuff is not free, right? And the people who do that, they don't get paid and they're not insured. That's also something we need to battle all together. And then those companies are IPO-ing. [00:43:51] Speaker 1: The companies that employ people who are not technically... And they say you're a freelancer. [00:43:55] Speaker 4: Yeah. Like, okay, you can decide when to deliver the meal. Can be this evening, can be tomorrow. You're a freelancer. Uh-uh. Not really. [00:44:04] Speaker 1: But those companies specifically... Not really. [00:44:06] Speaker 4: You deliver it within 10 minutes and quick. [00:44:08] Speaker 1: And those companies themselves have actually admitted that if those workers were to become formal employees, it would eat into the bottom line of the business. So then it brings up this concept of stakeholders, which is something that you brought up. And I'd like to pose the question to Ankhal. Actually, we had a question from the audience here saying, "Isn't digital transformation with its new business models and disruptive nature the key for growth or new growth?" I want to bring it back to what you were saying about Telefonica right at the beginning, and that you are investing. You're investing in the future. You're investing in these new technologies and innovation. 5G. We all know it's going to be super fast. We're very excited, so we can download things very quickly. But you also have to answer to your stakeholders. And oftentimes, it's difficult to balance what the stakeholders want right here, right now, in terms of short-term profitability versus them buying into the bigger picture, longer-term dream of investment. In this case, it's investment in technology. But we could easily be talking about investing in climate change. So how do you balance the two? The short-termist approach of stakeholders versus the long-term goods? [00:45:16] Speaker 5: Well, before I respond to this question, I would like to, because I was trying, I was listening to some of my panel colleagues, on the point of taxation and multilateral collaboration, which is, again, also one of the stakeholders, which is the society that we need to operate responsibly in. What we're seeing with digitalization is that the boundaries between sectors and the boundaries between geographies are blurring completely. There are changes of business models. All of us are getting into other businesses, especially those that can be digitized. And here, one of the ways of being responsible in the cooperation to society is through fair taxation. We at Telefónica are very responsible citizens. Out of 100 euros that we generate in revenues, 21 euros are the taxes that we either pay or we collect on behalf of the administrations where we work to. And we believe that digital players, which are crossing boundaries in ways that we have not seen before, are putting a challenge to many of the established procedures we have in societies. It's big taxation, big regulation, big competition policy. But in specific, in taxation, we think that you need to be a first citizen. You need to pay taxes where you generate your revenues, where you generate your profits. But we also believe that this has to be done in such a way that is levered on multinational collaboration. Because otherwise, there can be arbitrages being created. There can be artificial moves of investment to different geographies depending on the taxation. There has to be an avoidance of double taxation. So, this is touching on the redistribution, on the taxation, on the fairness to stakeholders and also on multilateral collaboration. Again, to your question, we have a paradox in the telecom industry. We are seeing growth year on year compounded, 50% growth rates in mobile data growth. And obviously, our revenues are not growing at this pace. We have an issue of monetization. In part, because regulation has been more focused on generating deflation in this sector rather than going for investment and investment for growth. At the same time, investors are seeing that we are going to have big wave of capital expenditure. And we are finding barriers in order to invest effectively, not on the terms of collaboration between operators. Because we are collaborating in those with other players. But barriers to consolidation. You can see that in the US and the T-Mobile sprint deal has been practically clear yesterday. And the remedies that have been mainly imposed on that transaction are due to investment. To invest in new generation networks, generate jobs, create investment. When we have seen consolidation in Europe, which has been much more limited, the remedies have been more along the line of creating another competitor. When you consolidate, normally the remedy has been to create the situation that would lead again to competition grow. And many times within operators that do not have their own networks that operate virtually on other networks and then have an incentive to play on prices rather than on quality investment and employment. So, what we think is that policymakers should realize that in the digital economy, having a strong tech players is a competitive advantage. We think that there is a strong tech players, whether it is a competitive advantage, whether it is a competitive advantage, whether it is a competitive advantage, whether it is a competitive advantage. And it is going to create more productivity. But, of course, it comes with challenges. Investment, and we need to promote ways in which investment can be made with adequate return on capital employed. [00:50:06] Speaker ?: And, of course, there is also a competitive advantage. [00:50:07] Speaker 5: That is a competitive advantage. And it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. But, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. And, of course, it is a competitive advantage. Again, we are confronting a big cross of boundaries by players thanks to digitalization. And we are facing, again, paradoxes of having over-the-top players which are giving exactly the same services as we do, them not being regulated at all and as being deeply regulated. What we advocate is not that over-the-top players are regulated. What we advocate is for a level playing field. We advocate for same service, same rules, same restrictions, same obligations, same rights, same service, same rules. We saw back a few years ago, and this applies not only to the rules of operation, but, for instance, to the rules of consolidation. We think that the former relevant market assessment of concentrations is probably obsolete or the definition of those markets. What we saw a few years ago that Facebook acquired WhatsApp for 20-something billion, tens of millions of customers. At the same time, Telefónica was selling our Irish operation, which Ireland was moving in a country of 4 million people from 4 to 3 players. One deal was in the 20-something billion, our deal was 700 million euros. Our deal went to phase two, approval with lots of remedies. The WhatsApp deal was approved within 15 days, not even going to phase one. And there is something that has to be reassessed. Not only on how we are regulated for the normal operation and to foster investment and growth rather than deflation. Because otherwise, we get to an economy that contracts and contracts. And if we have deflation in our prices, it drives in order to be able to provide returns to the shareholders. Otherwise, we are going to be out of capital. We have to deflate also our cost base instead of going for an economy of investment and growth. [00:52:26] Speaker 1: Given everything that we have discussed in the panel, Ms. Guria, I have a question for you. We talk about a world that is increasingly digitized. We talk about the increasing prominence of tech firms and a concentrated amount of wealth going to those tech firms. The prominence of intangibles on these firm's balance sheets. Many of these firms, tech firms, have not posted a profit but are trading at valuations of billions of dollars here. But at the same time, as Richard was just highlighting, not everyone has participated in this wealth generation over the last decade or so. This all has a purpose. The question is, can we really trust the economic models, the traditional economic models that we have been using for the last couple of decades to reflect this new environment with the prevalence of tech firms and a real income distribution problem? [00:53:23] Angel Gurria: Well, we're trying to change it. And so far, we're making progress. Take just the taxation element that you mentioned. The world today, as we speak, it's happening, is now reporting on automatic basis. Automatic exchange of information on financial accounts. Every time a person from a third country opens an account anywhere in the world today, the bank will report to its financial authority and the financial authority will report to the country of origin of that person. So, if that person reported the account to its authorities, no problem. Well, if they didn't, they'll probably be invited to have a cup of tea. Hmm? And out of that desire to normalize the situation, about $110 billion have already been recovered. By the way, the OECD's core part one budget is about $200 million. So, that's about, what is it, about 500 times? That's the best value for money you could ever get. You know? Invest in the OECD. It's good business. Good business. You get good policy advice and you get a lot of money, too. But, beyond that, we're now doing with the BEPS, the base erosion and the profit shifting, which basically means multinational companies should pay their fair share. Nothing more than their fair share. But, as we found out in one particular case, with this fine of the 0.05% tax rate, which is pretty low, you know, pretty comfortable, that was applied to one of the big tech companies in the European Union. And then, they fined it by $15 billion and it went all to Ireland. And Ireland reluctantly took the $50 billion because they did not want to acknowledge the fact that it was being, you know. So, it's happening as we speak, for a number of reasons, and mostly as everything else in life. It's reality, it's economics, but also it's politics. We had the biggest ever financial crisis in our lifetime. And it's no longer politically possible for the man on the street to continue to pay 30% taxes while the wealthiest people put their money away in tax havens. So, that brought down that particular part of the business. On the other part of the business, which is the companies, again, the small and medium enterprise captive in its own borders is paying 25%, 28%, 30%, and the large multinationals are paying 0.05%. So, now, it's not always a case. We were discussing yesterday about the fact that some of the large multinationals in their own countries pay 20%, 21%, 22%, 23%. Now, the question is, it's against those abuses that the system has reacted. And second, it is because it was not politically possible anymore. So, now, the question is, how do we organize ourselves? Because we are leading a charge for 2020 with a solution to be posted by the next few months to present it to the finance ministers of the G20, etc., etc. But, in the meantime, the political imperative, i.e., in Spain, or in Italy, or in France, whatever, has made it necessary for governments to propose the, well, what do we call interim measures, okay? Now, the question is, all of them have said, whenever we have an OECD-based solution, we will all sunset our interim measures, and we will all go to the OECD solution. Well, that's fine with us. That's fine with us. In the meantime, we're working very hard. We are really changing reality in this sense. We've changed it forever. You know, I'm going to quote a classic here, Vladimir Putin, when he was the host of the G20 in St. Petersburg. He said, "This initiative is the greatest revolution in the international tax regime in the last 100 years," and he was right. [00:58:45] Speaker 5: If I may complement one angel complementing the other angel. Taxation can take different forms, and the OECD was, in the presentation, saying that there is not enough investment in digital connectivity. As we speak, there is a spectrum auction taking place in Germany. It's a spectrum auction that comes with very onerous coverage obligations, but at the same with what could be labeled as an artificial scarcity of spectrum. By now, and it's public, the total rates are around 6 billion euros, and you can only spend one euro once. You cannot spend the year in spectrum and then spend it in the network. And this has been the case in the past auctions in that country. No wonder why there was a concern about investment in digital and in fiber. No wonder Germany is between the five largest countries in Europe, the one that has the lowest penetration in fiber to the home. Yeah. So, and it's an indirect way of taxation. Right. I should say. [00:59:55] Speaker 1: So, we're running a little bit thin on time. I'd like to just start off, well, end really, with the final comments from all of you, starting off with the minister, putting it all together, everything we've discussed today, and we've had a very broad discussion. But just bringing it back to what we started with, and that is growth, the growth outlook. Growth is pretty tepid. There are many challenges ahead. What do you think the priority should be on right now in terms of governmental focus? [01:00:25] Speaker 3: Well, I'd say it's quite clear that the main challenges and the main reasons why growth is tepid, as you say, are man-made. And therefore, it is really a decision to be taken on a number of jurisdictions, and there's a very relevant one that obviously has a big role to play, on how to go back to a multilateral rules-based framework, which has, as I said in my introduction, served us so well since the end of Second World War. And I am absolutely convinced it would be the right way forward to reform the system, to improve the system, to reinforce the system, to adjust it to the realities of the 21st century, but to try to continue to build on that constructive kind of approach, which, in my view, is the only way to also ensure geopolitical stability, which is very much needed in this framework. And just to take the chance, a final word, we're very strongly supporting the work going on in the OECD with regards to base erosion and fair taxation. I think fairness of tax systems is going to be key also to have the ownership of our citizens. This is a top priority for the Spanish government, and so we're making progress, but maybe not fast enough. So I would take these final words to try to put a bit of pressure on all of us to try to really find a solution as soon as possible, because we're talking about billions that are actually being lost for paying for the public sector in a number of countries, because of the taxation system not being adequately adjusted to the new realities of the large technological digital platforms. So I think that that's an area where the OECD has lots of value added. We want to continue to work constructively, even though we are, you know, forced to do something at the national level in the meantime. And urgent progress, I think, is absolutely necessary if we want to be effective and not to come too late addressing an issue that all citizens understand as purely fair. Thank you. Jack? [01:02:40] Speaker 4: Yeah, let's continue on the theme of man-made, and back to your question on do we need to change the system we've always had, and we just brought us a lot of prosperity. But please don't forget, as a world, we've never been so well off. So that's also a fact which nobody talks about. But we need to play with the rules of the game and adjust what's necessary. I think Europe needs to be Europe, and with all due respect not be Spain and Netherlands and whatever. It needs to be Europe and invest in a long-term future of people in infrastructure and be a player in this world economy. But stuff needs to change. The labor market needs to change. Regarding the labor market, everybody on board, everybody well paid, we need to reinvent social security, reinvent labor forms, and reinvent education. And those are measurements we need to take. But the basis of how we build wealth is still very much alive. But we need to be man-made, improve, and innovate. [01:03:38] Speaker 1: The word man-made is coming up a lot here, both in the context of opportunity and also in solving problems. Angel, please. [01:03:47] Speaker 5: We think that the digital revolution is unstoppable. It's changing the way that we work, the way that we consume, that we entertain ourselves, the way that we want to be treated, the way that we want to interact, the immediacy. This has huge opportunities for companies and for countries. We are ready to do our part, which in the initial presentation by the chief economist there was a complaint that there is not enough digital investment. We are ready to do our part, but we need to have a framework in which, because we have many constituencies, we need to have a framework in which we can invest in a way that creates a return. We are ready to do that. We are doing it clearly in the geographies where we find this environment. There is investment, which is probably at this moment being made not in the most effective way, as the example I put of this spectrum auction. But that's the source of growth, and we need companies, citizens, and policymakers to be aware that we need to create four investment, four innovation policies to trigger growth again. [01:05:06] Speaker 1: Richard, and your final thoughts, please, when you think about it from the actual workers' perspective, what do we need to focus on? [01:05:13] Speaker 6: Well, in a world where business investment and aggregated demand and interest rates are low, there is a world of space for governments to invest, increase investment, and to hire workers that are needed to rebalance the equation and share of the wealth. And I think the OECD must use this moment to call on multilateralism to coordinate an inclusive growth approach to a greener, more sustainable economy. And, Angel, if that's coupled with the push to multilateral discussions on raising wages globally, it will lead to trade that benefits everyone instead of stifling wages and exacerbating inequality. But I just make one warning. The OECD can't applaud the use of fiscal space for wasteful tax cuts like those that we saw in the United States. The U.S. gave away a trillion and a half dollars that could have been used to invest in jobs or infrastructures. They gave that to the wealthiest corporations and individuals on the face of the earth. And that led, instead of wages increasing and investment being made, that led to a record $1.1 trillion in stock buybacks. U.S. companies have had record profits the last three years. And for the last three years, the combination of stock buybacks and dividends have equated to over 100% of profits. That means there was nothing left for investment, nothing left for wage increases, nothing left for facing the future that we're all talking about and providing training. I think we need to look at that squarely and say, use the space to prepare us for the future, not to reward people for far distant paths and things that they probably don't need to be rewarded from. And just let me say one last thing. I do, again, want to applaud the OECD for its work on digitalization, because I think it has been groundbreaking. And we look forward to partnering with you to make sure that the admonitions and a lot of the things that you've talked about become a reality. [01:07:43] Speaker 1: Secretary-General, some closing remarks from you, please, before we open up for Q&A. [01:07:48] Angel Gurria: Just, first, a question. In fact, on the NAFTA that Richard alluded to, today the minimum wage in the border, which competes more directly with the United States and Mexico, is $10 per day. And, of course, in the United States is probably the mean, the average is probably about $20 per hour, something like that. So, you're talking about very large nominal differences. But the question is, it used to be a multiple of that and the minimum wage in Mexico used to be a fraction of that. And the people who work in the export-led sectors of Mexico are the best paid. And they are the ones that have the largest level of formality and the ones that have better social protection. So, in a way, even without it being part of the negotiations themselves, it is already having that salutary effect. The question is the differences. At the beginning, we're very large. And, of course, the productivity differences are also rather abysmal. We have a productivity which is about a third to 40% of that of the United States. And that, also, we have to invest in trying to pick that up. And that will help both the productivity, both the competitiveness, but also will help, of course, the workers. So, there's a lot of work to do there. But let me just say, in the end, it's about go multilateral. The solutions to the trade tensions have to be multilateral. They take a little longer, but they tend to stick around longer also. And ownership will be better spread. So, go multilateral on the negotiations. Second, go structural in terms of the things we need to address the drop in productivity. I mean, we're talking about competition, regulation, innovation, education, health, labor market, product markets, R&D, the financial system, the universities. It's not just one, as Richard said, it's not one silver bullet with which you fix everything. You need to work on all of these things, and you need to work on all of these things at the same time. But structural changes are what is going to lead to higher productivity and to a permanence of change over time. And last but not least, cooperation, cooperation, cooperation, rather than confrontation. Thank you. [01:10:51] Speaker 1: Thank you. And thank you to our panelists for cooperating with me on this panel. I'd like to open up the floor to questions right at the front here. Let's go. [01:11:05] Speaker 7: Thank you very much. I come from China, so it's natural for me to pay special attention to the China part of OECD Outlook. So I just want to make three quick points. The first is that, it's a suggestion actually to OECD and Mr. Secretary General. How about we invite a Chinese economy expert next time? Since OECD Outlook pays so much attention to China's slowing down. So we need a fire, fire discussion on that topic. The second is a comment on projection. You know, theoretically or in reality, the probability of any projection that comes true in our life is zero. Ask any economics in MF, OECD, and World Bank. But nevertheless, the straight point from OECD projection is that we need to get fully prepared for the least desirable scenario. So here comes my third point. It's a comment. Actually, China's slowing down is inevitable, according to Professor Lawrence Summers from Harvard. It's regression to the mean, following the track of USA, of Europe, of Japan, and a market economy. China will slowing down. But the problem is that the world has become accustomed, used to growing China with high speed. But we are shifting to a new scenario. Someone call it new normal, someone call it new mediocre, someone call it new equivalent, anyhow. But we are moving to that new scenario. And I strongly believe that OECD could make just, otherwise, unbiased insight and help everyone on that scenario. That's my comment. Thank you very much. [01:13:21] Speaker 1: Thank you for the intervention, sir. Just to recap that the first question is about having a panelist from China. The second question is about just accepting the fact that absolute levels, nominal levels of China GDP growth are coming down, and that will have inevitable knock-on effects on the global economy. [01:13:39] Angel Gurria: Well, we invited Liu Kun, the finance minister, and we invited Wang Yi, the foreign minister. And we also invited Shang Chao, the trade minister. So, you know, we invited the trade ministers. Unfortunately, none of them could attend. So, otherwise, they would certainly be sitting there. But, so, it's a good idea to make sure that we have a Chinese expert. We just had our WP3 meeting, and we had a Chinese deputy governor. So, we always try to have that. And we do have a representation of China in the ministerial itself, starting tomorrow. So, now, on our projections, you are worried because we say we should prepare for least desirable scenario. We always say that to all the countries, all the time. Prepare for, you know, hope for the best, plan for the worst, and you'll do well. That's good. It's so wise, it almost sounds Chinese, you know. So, now, the world has become accustomed to high double-digit growth. No, we have not. We believe it's a lot sounder, more sustainable, more serious, and more reasonable to be growing at 6% when you're already the second or perhaps the first economy in the world. You are generating just 6% of the growth of China every year is worth, well, many whole economies around, you know, some of our members here, you know. Every year, you're adding in the margin, you know, several of countries' economies here. So, I think sustainability is the key. And the question of the control of the variables. For example, when credit seemed to be out of control, then there was a reaction to say, let's control the non-banking, shadow banking sector, because that's providing up to 50% of the credit. You can't control that. So, you should. Why? Because it's creating a bubble and all the sorts of problems, you know. So, they did it, and that's good. So, I mean, 6, 6.5%, which is the stated official target, for us seems reasonable. And frankly, it seems doable, provided we do not have a crescendo of the trade tensions. [01:16:25] Speaker 1: All right. Let's take two questions now in a row. In the interest of time, I'll put them together. And if we could keep them quite concise so that we have time to get as many questions in as possible. The lady over there. And then, do we have another one? And then, the lady right in front. [01:16:40] Speaker 8: Thank you very much. I'm Stephanie Scherer, University of Sydney Professor of Economics. I would like to comment on our focus in the economic debate, mainly on labor market policies and the need for retraining workers for the future labor markets due to automation. And also, the well-being of our workers who may fall through the safety nets because of this changing markets. And I was wondering, why are we only focusing on these labor markets? Because we may have a whole new discussion about maybe we need just better social protection systems of picking up those workers who fall through the cracks now in their middle ages through automation. And maybe we have to have a discussion on having shorter work weeks. We used to work six days a week. Now we work five days a week. Some countries are flirting with four days a week. Diversity countries are producing 42,000 per GDP per capita or 42,000 per capita. This is $115 a day. We have never been so wealthy and so rich. So this is 44 times more than what the GDP per capita is in the 10 poorest countries in the world. So with this type of, I think Jacques van der Broek alluded to this, we have never been so rich economically of a high level or standard of living. So in these discussions only focused on how can we ensure that there will be more jobs for workers to work another five days in maybe a job they don't even want to do? Or why don't we have four day work week? Why don't we have new redistribution mechanisms to buffer those individuals who may work only four days a week because there's no more jobs? And then focus on areas of investment for increasing the skills of our population that have the highest returns. Because reskilling workers in their 40s is extremely expensive and extremely hard to do. This is extremely labor intensive. And I don't know whether companies have even the incentives to do that. So why don't we take all these insights from recent research on family economics and child development economics and transfer more through the transfer mechanisms on investments in early childhood. Why is the OECD not reporting our investments in countries before the age of five? And there you will have the highest returns. But you can't have this discussion with a new discussion on our priorities in public spending. And we may have to have a closer discourse at the next economic outlook on taxation, who should be taxed, and who should receive those benefits. [01:19:26] Speaker 4: Thank you. Yes, thank you. There's a, in your, well, is it a question, but anyway, your contribution, there's a long-term thing and there's a short-term thing. The short-term thing is we're desperately short of people. In many countries in Europe, companies cannot grow because they cannot find people. So it's not in the OECD report, but redivision into shorter work weeks will only aggravate the issues we're currently facing in most European countries. There's then a mismatch. We still have a demand for people within countries on retraining, within Europe on bringing still people from Spain into Germany or whatever. So that's what needs to happen. In France, in this country, we created a 35-hour work week. Unemployment was 10% before we did it and it was 10% after we did it. So, you know, nothing really happened. I totally agree with you on equipping people very soon with the skills of tomorrow. There's one thing I forgot to mention that I think would be crucial if government finances would choose between investments and costs. So, care for the elderly, although very important, is cost. Education is an investment. Infrastructure, digital, is an investment. So, I think, towards the OECD and countries, that could be... Because then you've got business cases, right? Business cases on education, very young, gives you employment and those sort of things. So, maybe that you're alluding to. Short-term redivision of labor aggravates the short-term issues. [01:21:07] Speaker 1: Shall we take the next question? Is there another intervention? Richard, would you like to comment? [01:21:11] Speaker 6: No, I think you have to... We hear in the United States that there's always a shortage of labor, too. And if you offer an engineer a job for $20,000, you'll probably have a shortage. If you pay them a fair wage, we find out that there's a mismatch between the wage offered and the skill. We're also trying to re-skill people. In our apprenticeship program, we're looking forward and trying to figure out the skills that will be needed. And we're retraining our journey people. We bring them back every two years to retrain them. But when you look at the long run, I think the premise that you originally make is that at some point, with the increase of technology, robotics, and digitalization, there will not be enough jobs for the people, meaningful jobs. And at that point, what do you do? I think you have to look at a number of things. Work week is one of them. Retirement age is another one. Some workers in the United States can't stop working. They don't have a retirement plan or enough savings to carry them through, so they have to continue working. I think any society has to look at all of those things because there's an ultimate question that I asked earlier. What happens when a society is incapable or unwilling of providing a rising standard of living to a majority of its citizens? And that's what can happen when jobs, when we run out of jobs, if that happens. Now, we believe that technology, quite frankly, is neither good nor evil. It's how you deploy it is there. And we think that jobs can be created in the digitalization area so that we can change skills, but new jobs will be created and keep things going so that people have interesting, rewarding work to do that gets paid for them in the same way. And, you know, it's a question that too many people just stop thinking about. But we need to think about the long term. You're absolutely right. [01:23:20] Speaker 1: I think we have time for perhaps one last question, maybe two. Let's see. [01:23:27] Speaker 9: Thank you very much. My name is Patricia Samayor and I'm also an economics professor. I feel we are dancing all the time around the same apple. Economic growth. There was a wonderful book last year, The Growth, The Solution. You remember that perhaps. And yes, it is understandable that we are worried about the trade problems that we have between the United States and China, but I feel very much that we have get accustomed to that system. We, at the end of the day, although we discussed this better living index and so on, we come back to the same discussion, to the same system. The issue of digitalization is revolutioning the labor market. And we are fearing losing jobs. But we don't put the attention on those activities that are labor intensive. Perhaps there's a solution over there. Labor intensive activities, like healthcare workers, teachers, who take care from our children, our parents. They cannot be replaced. And perhaps if we reward the work in a better way, they can also foster aggregate demand. Why not thinking in that direction? Instead of putting all our attention in this productivity, how many people do we need to produce more and more and more so that we consume more and more and more from things that we don't need? [01:25:21] Speaker ?: Thank you. Thank you. [01:25:23] Speaker 4: By the way, again, we just, on the occasion of this forum, issued a report of the future of work, RANSTART future of work, it's on our website. And actually, there's a positive sum on work, but it's a redivision. So the jobs you're alluded to, we call wealth workers. It is because people have more wealth, because of the productivity, because there's lots of positives around that. They can employ people for childcare, more women at work, service at home. At the same time, that needs to be paid for, so that's another issue. But we do have a positive sum. But we need reskilling. There's lots of, of course, call it last mile workers. That's still jobs we see now. And then there's frontier workers, which is really technological breakthroughs in digital. You're dramatically shorter people, right? [01:26:11] Speaker ?: Yeah. [01:26:12] Speaker 4: So it's around the reskilling agenda. So people shouldn't be, we need to battle the insecurity that people have. There is a future, which is probably not in the job you have today. And that's when you become a yellow vest, if you're not sure about that. [01:26:25] Speaker 1: I'm going to squeeze in one last question, and this has to be it. So whoever wants to take that question, please take the opportunity right now. [01:26:34] Speaker ?: All right. [01:26:37] Speaker 1: No more questions then. Well, thank you very much for attending this panel discussion. It's been a pleasure to be here. Thank you to our panelists as well. [01:26:44] Speaker ?: Thank you. [01:26:45] Speaker 1: Thank you all. [01:26:46] Angel Gurria: Thank you, Madame, the moderator. [01:26:49] Speaker ?: It's been nice to see you again. [01:26:50] Angel Gurria: Thank you very much. [01:26:51] Speaker ?: How are you? Thank you very much. Thank you very much. [01:26:55] Angel Gurria: Thank you very much. [01:27:25] Speaker 4: Thank you very much.