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The Future of Work and the COVID-19 Crisis

The COVID-19 pandemic is having a profound impact on the present state of work. The crisis is throwing millions of people across the globe out of employment, sending people with good jobs home to work remotely, and exposing millions of front-line workers providing the necessities of life to a deadly virus. Although seemingly “we are all equal in the face of the virus”, the pandemic has starkly revealed key features of the contemporary world of work – its profoundly unequal distribution of rewards and risks. While it may be tempting to treat the pandemic as an exceptional event that released a devasting shock to labour markets around the globe, it offers a vantage point from which to consider the prognostications provided by the World Bank, the OECD, the ILO and various pundits about the future of work.

The pandemic has accelerated changes in work already in play – technological adoption and deepening class inequalities. It could prove to be a major tipping point for the digital transformation of the workplace which, it is predicted, will decimate jobs, exacerbate inequality, increase surveillance, and detach people from a place and community of work. At the same time the pandemic has also triggered a range of experiments about how to address the current disruption of work. By compressing processes already under way, the pandemic has expedited the future of work into the present. Is there anything we can learn from the impact of COVID-19 on work today that can help us prevent it from becoming the blueprint for work in the future?

A threatening future and fearful present

Has COVID-19 accelerated changes to work that were already becoming visible? In The Rise of the Robots: Technology and the Threat of a Jobless Future, Martin Ford predicted that the impact of new technology – processing speed in 5G networks, the capacity to analyze and extract information from big data sets and machine learning that draws on artificial intelligence – will have a devastating effect on jobs. Cyber-physical systems connectivity, which heralds the fourth industrial revolution, will enable computers to do skilled jobs, take over driving automobiles and trucks as well as low wage jobs in fast food and retail. Robots will substitute human labour, wages will continue to stagnate, labour’s share of the national income will continue to decline, labour markets will become even more polarized and recoveries will not result in more employment. Ford predicts two complimentary trajectories for the future of work.

The jobless future?

The prediction of a ‘future without jobs’, one which recurs with each industrial revolution, estimates a considerable loss of employment and work in occupations that can be automated. These estimates vary considerably because it is easier to predict which jobs will be lost than it is to forecast the rise of occupations yet to be named. This focus on the impact of technology on the future of work is understandable, it is tangible – we can see it every day at the grocery store when we check out, when we deal with avatars at call centres, and with the drones that are increasingly collecting our goods at huge fulfillment warehouses. It is an easy culprit to blame for the anxieties that people have over the future of work. At the same time as some jobs are destroyed, new products, industries, organizational routines, and business models are created. The diffusion of these innovations through the economy are likely to be uneven and regionally specific.

While the huge job losses and unemployment we currently confront are not caused by technology nor are they necessarily the jobs and occupations that might be lost to technology in the future, the COVID-19 jobs crisis provides a periscope into a future in which a considerable segment of people are out of work. What the pandemic has revealed are patterns of inadequate resources and unequal access to social provision (including poor healthcare, food insecurity, inadequate housing, let alone access to on-line schooling), which prefigure a very worrying picture if this share of population is to be permanently jobless in the future. If individuals and communities are left alone to address the social necessities that work can no longer provide, a Polanyi-ish view suggests we could not sustain such levels of shortage and inequality without the total loss of social cohesion.

The changing nature of work that remains

All the predictions about the future of work agree that the jobs that will remain will also be affected. In contrast to longstanding economic theories of the upwards skill-bias of technical change, automation and digitalisation can also reduce the richness of work content, leading to deskilling and a reduction in worker satisfaction. Technology is likely to exacerbate the current job polarization, leading to a greater disparity between satisfying and rewarding work for some, and a growing cadre of workers who experience a tyranny of technology over their work tasks, routines and remuneration. The business practice of ‘management by algorithm’ can, as research shows, lead to intrusive digital surveillance, which undermines worker control and autonomy, and discrimination against historically disadvantaged groups in recruitment, selection and job allocation decisions.

Moreover, the shift to service provision via digital platforms epitomizes the expanding share of the workforce falling outside the scope of employment protection without enjoying the access to capital and resources necessary for true entrepreneurial self-employment. Despite the rhetoric of the sharing economy, many of the digitalized gig jobs do not provide workers with freedom or security. The pandemic has exposed just how vulnerable these workers are to economic disruptions; they lack vacation days, sick leave and progressive guarantees for flexi-time that is oriented to workers’ needs. Typically, social security provisions are also aimed at employees, excluding other forms of work provision. Even more remote from the diminishing circles of social protection are workers in the informal sector, migrant workers and non-citizens, and particularly those without lawful immigration status on which the economy depends and excludes at the same time. Workers for contractors at the bottom of transnational supply chains have been particularly hard hit as brands and retailers have simply cut orders.

The pandemic has amplified ‘the winner takes all’ scenario that has come to dominate an increasing number of sectors. Growing industry concentration and associated monopsony power exercised by ‘superstar’ firms contribute to a declining labour income share. While economic growth will be universally halted during the pandemic and its aftermath, it is expected that labour’s share of income, already in decline, especially in the Global North, will plummet. Despite sky-rocketing share prices since the virus-induced lockdown, Amazon has fired workers who have protested against unfair working conditions and lied about their entitlement to statutory sick pay while on coronavirus related leave.

The COVID-19 crisis vividly demonstrates that not everyone has borne that same kind of burden and how traditional economic and legal institutions aggravate the distributive impacts of the new technologies and employment structures. Some health care staff are working around the clock, but enjoy technological advances that allow a safer work environment; other, too long called ‘low-skilled’, have continued to provide care in nursing homes without adequate personal protective devices or staffing. For people in secure well-paying jobs, the pandemic has sped up the future so that people now resort to working remotely with Zoom, cutting down commuting time and reducing their impact on the environment. At the same time, increasing demand for deliveries does not reward workers who remain vulnerable to quick on-demand and just-in-time pressures that are not compensated.

Lessons from the present and a better future of work

Gloomy predictions about the future of work fit the current dismal impact of the COVID-19 crisis on contemporary work. But this dystopian technological determinism is not universally shared. The flagship reports by the OECD, World Bank and the ILO identify interconnections between high-tech and low-tech sectors of the economy, the positive and negative aggregate multiplier effects of new technologies on prices and productivity, and the way in which technologies substitute for labour at the level of work tasks rather than entire occupational groups. They conclude that a sharp decline in overall employment seems unlikely. While certain jobs and tasks are disappearing, others are emerging, and employment has been growing.

The World Bank stresses the positive impact of technology in paving the way for new and altered jobs, increasing productivity, and improving the delivery of public services, and emphasizes the primacy of human capital. On this view, routinized tasks will be replaced by ones that require innovation. Moreover, concepts of time management will change and for many the notion of a work place will be substituted by remote work and networks. The key challenges posed will be managing just transitions of workers in declining industries and regions towards new job opportunities, ensuring job quality and finding a way to provide income security for the legions of workers in precarious and nonstandard jobs.

The disputes between the pessimists and the optimists over the future of work is not simply empirical; indeed, they reveal a different understanding of what shapes the future. Technology, just like globalization, is not a natural force like a virus; instead, technology results from human decisions and social processes that are shaped by institutions that govern both how technologies are developed and their future trajectories. The impact of technology on the future of work is a political question, which raises questions about insecure livelihoods, insufficient employment and inequality both within and between nations. What makes people in high-income countries anxious is not technology per se, rather it is that the post-war social contract has unravelled for so many. Even worse, perhaps, is that the greater numbers of people in the least developed countries, most of which are former colonies, never even enjoyed the social contract to begin with. Asking whether technology is a bane or a boon confuses the most visible manifestation of how certain kinds of changes are implemented, with the underlying driver of the change.

The misfit between traditional and diminishing forms of regulation and an ever-changing labour market, if it persists, provides fertile ground for the growing disparities between the privileged few and those who remain in the margins, but it also reveals signs of political will and capacity to steer change. The pandemic has shone a spotlight both on the deeply embedded inequalities in the world of work and the urgent need for fashioning a new social deal over work. A return to ‘normal’, as many people wish, would actually be a return to path that leads to greater inequality in the future. Instead, the pandemic should serve as a warning about the kinds of changes needed to make work in the future more sustainable, resilient and just. Despite the different drivers of change to work now and in the more distant future, there are important points in which what we need now and will need in the future meet.

The jobless future?

Current efforts to aid the unemployed resonate with those recommendations for the future that emphasize the role of the state in providing protection from social risks. As present, we have seen mostly national responses to the unemployment caused by the pandemic, which highlight the ongoing importance of nation states despite earlier concerns of the limited capacity and role of states under neo-liberal globalization.

In its vision of work in the future, the World Bank sees it as the state’s responsibility to manage the dislocations caused by changing skills and new business models accompanying the new technology. The new social contract will involve investing in human capital, strengthening social protection and mobilizing revenue through taxing platforms and formalizing the informal sector. Employers bear no part of this new social contract; in fact, true to form the World Bank argues that labour regulation should not attempt to protect jobs through unfair dismissal protection and severance pay schemes. It contends that scrutiny of industrial-era employment protections should be accompanied by an assessment of rigid, possibly outdated, laws on work arrangements.

By contrast, many doubt that a human capital approach can resolve distributional problems and that individuals can, in fact, plan ahead for disruptions like pandemics, climate-related catastrophes or financial shocks that ripple through global markets. What is needed instead is for the state to provide universal insurance for social risks. At its most ambitious, are calls for a universal basic income, which includes policies that embody three design features: they are not targeted, they are not conditional, and the assistance takes the form of cash. Although the OECD does not endorse a universal basic income, it advocates shifting social protection from the employment relationship by, for example, granting individual entitlements based only on, for example, residency criteria, to reduce coverage gaps. The ILO also calls for ‘universal’ protection, albeit without clear specification of what that means.

In the response to the pandemic, no country has introduced a basic income scheme as such;  however, partial variations prevail: many increased the income replacement level considerably above poverty thresholds without sorting the unemployed into those who are deserving and those who are not. In some countries, targeted schemes have sought to simplify conditions and bureaucratic processes in order to expand the take up rates, and in others one-time cash payments were administered to a large share of the population.

Instead of simply replacing income for the jobless, some countries relied on, and further extended the use of arrangements that seek to encourage workers to act collectively and share work among the team. Others encourage employers to keep workers part time on the job in order to ease the volatility of transition. Many programs condition support on employers’ guarantee to avoid layoffs, drawing on employment protection rules, rather than avoiding them. There is also a growing experience of combining income support programs with education and training that are geared at increasing employability. Such programs are not in lieu of income support but supplement them, and therefore remove the constraints that equate employability with market individualism and autonomy.

The changing nature of work that remains

Current income replacement schemes designed for the crisis reveal new directions of inclusion. Some countries extended protection to contingent, fixed-term and temporary and part-time workers, and there is a growing number of examples of income-replacement schemes that are no longer dependent upon establishing an employment relationship. It is important to build on these initiatives and extend protection from social risks to all, and not simply to those who are employed in the ‘standard’ employment contract. These initiatives break the employment status barrier, which for too long has left the falsely and solo-self-employed as well as those employed in fragmented work arrangements outside the social safety net.

Social insurance, however universal, will not address another gap that the pandemic revealed: too many workers – standard, nonstandard, informal and self-employed – lack such basic employment-related rights such as annual vacation days or sick-leave, which have become crucial in adjusting to the health-related effects of the pandemic. Some countries have devised compatible, even if lesser, support for those who are not classified as employees who are either ill or in preventative isolation. The pandemic exposed that a growing cadre of workers who have no rights associated with their provision of work cannot weather such disruptions by drawing on private savings and, thus, they will have to rely on the state. It is important to develop mechanisms that both provide these workers with work-related rights that cultivate resilience and fairly allocate the costs of these entitlements.

In the immediate crisis, such expansions of coverage prioritize equitable and inclusive income replacement. But the pandemic has also revealed the pervasive patterns of inequality and domination today, which are likely to plague workers in the future. Women in particular struggle to balance remote work and care responsibilities for children. There is simply no way around it; resilient work in the future requires both adequate child and elderly care as well as the right for workers to adapt their work to the exigencies of life. Privacy issues are becoming ever more visible when remote work is accompanied by tracking technologies that are used to surveil workers instead of managing the contagious effects of the virus. To avoid the threat to workers’ autonomy and dignity, greater limits are to be placed on what are currently deemed inevitable managerial methods of monitoring.

Work as it is currently organized and regulated is bad for far too many workers. Many states have stepped in to alleviate the pandemic-induced crisis in work, and these initiatives have bolstered democracy and legitimacy. It is important to build on these endeavors, to identify best practices and to emphasize the role of the state in providing inclusive social protection and work-related rights. However, it is important not to let employers shift their responsibilities onto the state or onto workers. While some employers have responded to the increased and too-often deadly demands on front line workers by attempting to secure their jobs at all cost, far too many employers in agribusiness and long-term care homes have risked workers lives by failing to provide safe working environments. Unions and workers centres have been at the forefront at bringing these injustices to light.

The opportunity for some firms to shift economic burdens to others can exacerbate polarization at times of crisis, just when more solidarity and distributional equality are needed. Workers need greater voice at work, and they need more power to shape its future. Social dialogue involving trade unions and business associations has been widely touted in Future of Work reports as an effective measure to adjust to workplace, occupation and sectoral dislocation. In some countries, such as Sweden, unions and employers associations collaborated in devising de-novo responses to the current crisis, guaranteeing a greater acceptance of risk distribution that is based on fairness. Tripartite negotiations that develop sectoral and occupational adaptations and co-management of adjustments at the enterprise levels are essential prerequisites if changes are to be accepted as legitimate not only during periods of crisis, but also for resilient labour markets. Independent and democratically accountable workers’ associations, which are inclusive in membership and representative in their leadership, are essential for a better future of work. The pandemic could mark a turning point away from neoliberalism if we seize the opportunity to insist on solidarity over competition and demand a more equitable regulation of work.

 

Judy Fudge is LIUNA Enrico Henry Mancinelli Professor in Global Labour Issues at McMaster University

Guy Mundlak is Professor in the Buchman Faculty of Law, Tel Aviv University

Image credit: United Nations COVID-19 Response on Unsplash