Author: The Guerrilla Economist. Adapted and updated from the original blog published in October 2020 via Miller Research
If you have ever watched the movie Surrogates – featuring Bruce Willis – you are captured by a world where people live from the comfort of their homes, whilst robotic representations of themselves – known as surrogates – conduct people’s day to day responsibilities, creating a society free of crime…well, almost.
2020 has been the year we have come closest to this futuristic ‘super-tech world’. The development of humanoids has not quite become a reality to help us navigate this unfortunate pandemic, however, technology has allowed us to function, to some extent at least, from the safety of our homes. It’s not quite the ‘Surrogates’ fiction, but it’s close enough, and the world is still learning to adapt, especially in the world of work.
Technology has traditionally been seen as a threat to the labour market, but in these unprecedented times can it instead be a positive force in combating the impact of covid-19?
Post-pandemic labour force
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The future of the workforce and mass unemployment scares many of us. As the global pandemic continues, job losses have considerably increased with the unemployment rate increasing to 4.5% at a record rate, and job security is becoming increasingly uncertain. Having recently entered a recession, the UK economy contracted by 20.4% in the second quarter, its deepest recession on record. There is a mood of despair as we venture into a post Covid-19 world, but can technology bring us hope, to create an adaptable and productive workforce that can overcome such obstacles. Technology has been regarded as a great equaliser, but it is also considered a threat to the labour force. So, which is it?
An age of extreme efficiency
A post Coronavirus future could lead to a number of outcomes that would contribute to the structural adjustment of the labour force, such as: automation, job reframing (an increase in technologically centric jobs), and job consolidation.
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The first thing to note is that the pandemic is forcing the hand of companies to adopt efficient ways of maintaining productivity. There is an accelerating need for a labour force that is pandemic proof. Developments in technology, such as industry 4.0, Artificial Intelligence (AI), and advanced connective technology has ushered in the age of extreme efficiency, automation, and smart machines used in industry and consumer processes. This innovation has helped create a ‘global office’.
Automation that is ruthlessly efficient is not only a cost-effective substitute for labour but would drive down wages and lead to a fall in people’s income. Furthermore, the ‘income’ earned by robots is ‘capital income’ – lower costs and higher return – which favours businesses significantly. The result is that many people’s jobs are at risk. According to the ONS, the three jobs at the highest risk of automation are waiters, shelf fillers and junior sales jobs.
Job displacement was already happening before Covid-19 of course, with automated coffee machines, supermarket checkouts, and automated distribution warehouses, but this increased pressure for efficiency we are witnessing in the pandemic is ‘forcing the hand’ of companies to change their ways and adopt technology to improve their ways.
Technology and a Universal Basic Income
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The increased risk of unemployment from the wave of automation could bring the concept of a universal basic income (UBI) to the forefront of policy, as ‘human capital’ becomes obsolete due to concentrated automated processes displacing jobs.
Elon Musk the CEO of Tesla predicts that in the future UBI will become necessary due to the acceleration in super-smart artificial intelligence and automation. This will incur a rise in a concentrated level of highly technical experts and managers of revolutionary technology that will operate the world in which we live, requiring minimal human intervention.
In the long term though, if automation does become a reality and the labour force shrinks, how will people feel valued and remain functional in society? Would more people out of work positively correlate with negative externalities such as crime? Employment is an important way for people to have a purpose after all.
Perhaps technology can offer a solution here, as well as being the cause?
A window of opportunity
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The internet has provided an equitable opportunity for remote learning, for people to develop new skills in an informal, cost-effective and flexible way. There is a ‘window of opportunity’ for those currently unemployed or on furlough to reskill. The monopoly universities once held, as a route to a career, is threatened by the movement in cost-effective online learning tools. The internet is a great equaliser for many whose jobs are at risk during the pandemic, to adapt and pick up the skills to regain employment in the long run. It is estimated, in the coming years 75 million jobs are to be displaced due to automation and technological integration. To confront this threat, the World Economic Forum is launching the ‘Reskilling Revolution Platform’, which aims to provide better education, jobs, and reskilling opportunities for a billion people by 2030.
The unfortunate circumstances of 2020 have created an environment to test what the future could potentially look like, and how the labour force needs to adapt and take us into the future. The Covid-19 era will potentially prompt a significant redesigning of the labour force to one that is technologically centric, with a short-term slump in unemployment before the gap in tech jobs closes.
The risk of a future where superbugs are the norm, and the anticipation of this, has been a gamechanger. We are witnessing the development of a flexible and remote workforce, but will this mean we will see a permanent structural change in the labour force? And see an accelerating increase in automation that will displace jobs and mean many of us will end up on UBI? Or could we all live in a virtual world and adopt ‘surrogates’ that will free us from the stresses of employment.