REDMOND, Wash., July 18 Reuters U.S. companies are facing a new era in which fewer people are entering the workforce and pressure to pay higher salaries may become permanent, Microsoft Corp39;s President Brad Smith told Reuters in an interview.

At the software maker39;s Redmond, Washington, headquarters, Smith highlighted one source of what he called today39;s greater economic turbulence. In his office, he walked over to a wallsized touchscreen device and pulled up a series of charts, showing how population growth has tumbled in the United States, Europe, China and Japan.

The trend of around 5 million people expanding the U.S. working age population every five years since 1950 has shifted, starting in the period between 2016 and 2020 when growth slowed to 2 million, and is now slowing further, said Smith late last week, citing United Nations data. Major markets overseas have seen outright labor force declines.

That helps explain part of why you can have low growth and a labor shortage at the height at the same time. There just aren39;t as many people entering the workforce, said Smith, who oversees the nearly 2 trillion company selling cloudcomputing services to major businesses.

Government stimulus during the pandemic, COVID19 concerns, childcare and other factors have contributed to the current labor shortage as well.

Executives including Mark Zuckerberg, chief executive of Facebook parent Meta Platforms Inc, have recently fretted about the economy. Zuckerberg…