Pandemic-fueled automation is gobbling up jobs that will never return

The COVID-19 pandemic has had massive economic impacts in the United States, and one of the problems many companies have been facing as a result is how to keep business moving along without putting employees at risk of being infected. As you might expect, one of the ways many businesses are staying operational is by automating tasks that would otherwise be done by humans. Robots, after all, aren’t at risk of dying from COVID-19.

By Thor Benson August 26, 2020 6:00AM PST

Since the pandemic began, we’ve seen efforts to automate jobs increase significantly in the food service industrymanufacturingmeatpackinggrocery stores and beyond. Due in part to this pandemic, some economists estimate 2 million manufacturing jobs will be gone forever by 2025. We were already heading toward an era where more jobs could be automated than ever before, but COVID-19 has greatly increased the speed at which we may see that happen.

Automation beyond automatons

David Autor, a professor of economics at the Massachusetts Institute of Technology, tells Digital Trends he’s not surprised that we’re seeing an increase in automation efforts.

“COVID creates a kind of automation-forcing event where you have a scarcity of workers in many activities where you don’t have a decline in demand, so you’re going to kind of induce innovation,” Autor says.

“The longer this goes on, the more habits learned will persist.”

One thing Autor has been focusing on lately is how people getting used to videoconferencing is, in itself, a form of automation. He says people who are doing business over video chat instead of meeting in person means fewer people are traveling, eating out at restaurants, booking hotel rooms, leasing offices, and more. He says we could very well see a situation where many things we used to do in person are done over video chat as people get more used to operating in that manner.

“I think you’re going to see a permanent, substantial decline in business travel. The number of people who are going to cross continents for 90-minute meetings is going to fall really substantially,” Autor says. “That’s going to have very large ripple effects because business travelers are basically the tail that wags the dog of the entire hospitality industry.”

Many restaurants, hotels, airlines and other businesses rely on business travelers for a large part of their revenue, so if there are fewer business travelers because of videoconferencing, that could cause a lot of companies to go out of business or keep fewer people employed. Autor says this will partially occur because people’s habits have changed in the business world during COVID, and partially because businesses realize it’s simply more cost-effective to do things over a video chat.

“Part of it is habits. We’re going to change our habits. Part of it is we’re going to realize there were better ways to do things that were available to us that we weren’t using,” Autor says. “The longer this goes on, the more habits learned will persist.”

Revolutionizing the routine

Outside of the effects of videoconferencing gaining in popularity, we’ll also see the more traditional forms of automation continue to increase. Carl Frey, an economic historian at Oxford University and an internationally known automation expert, tells Digital Trends that there are multiple ways we’ll see automation increase.

“Companies strive to cut costs during downturns. Routine jobs, which can easily be automated, vanished during the Great Recession and didn’t come back thereafter, contributing to a jobless recovery,” Frey says. “Companies will want to pandemic-proof their operations. While e-commerce has been given a boost by social distancing, pressure has rightly been mounting on retailers of ‘nonessential’ goods to close online operations as warehouses have become overcrowded.”

Frey says that there have been significant advances in developing robotic hands that can pick and sort products of varying sizes and shapes, and once that technology has been perfected, companies like Amazon will need far fewer people in its warehouses.

“The reason why warehouses still employ so many workers is that order picking remains a highly manual process,” Frey says. “But robotic hands are becoming more dexterous by the day, and A.I. algorithms are now capable of better distinguishing between objects, making automation possible.”

Amazon is the second-largest employer in the United States, and most of those employees work in its warehouses, so this could present a massive shift.

“This is a hugely economically important problem — the ability of a robot to pick up an irregular object and handle it appropriately,” Autor says. “Not damage it, not drop it, not crush it while putting it into packaging. When that happens, it will have a huge effect on Amazon’s employment level.”

“Automation has always killed jobs. That is nothing new. … The question is whether people will find better jobs.”

Many economists like to say we shouldn’t worry about automation because we’ve always adapted to it in the past, and it hasn’t created the wide-scale problems some predict could happen in the not-too-distant future. But this era of automation is different than what we’ve experienced in the past due to the fact that we’re approaching a time when robots and artificial intelligence will be able to not just automate some of the tasks you might do at a job, but quite possibly all of the tasks you do at a job.

“Automation has always killed jobs. That is nothing new. The artisan jobs that were destroyed during the Industrial Revolution never came back, nor did the farm jobs that were mechanized in the early 20th century,” Frey says. “The question is whether people will find better jobs.”

A perfect storm

Whether you’re able to find a better job as automation escalates will increasingly depend on whether or not you have enough education to get the jobs that haven’t yet been automated. Autor notes that automation has been eliminating jobs that you can get without having much education for decades.

“The U.S. labor market has been deteriorating for people with high school or lower education for a good long time,” Autor says. “We’ve been in a period of declining manufacturing employment, declining white-collar office jobs, and the labor market is much more bifurcated into high-skilled professional jobs and low-paid service activities. … It’s already the case that it’s had highly uneven and non-neutral impacts on the quality of work. I don’t, unfortunately, see anything on the technological horizon that’s going to reverse that.”

Though it sometimes seems to have been lost in history, the quality of life for many working-class Americans was significantly reduced for several decades following the Industrial Revolution. It wasn’t until the federal government significantly expanded the social safety net that many Americans saw their lives improve. If this era of automation sees the job losses and increases in income inequality many economists expect it could, the government may be forced to step in and help the working class once again.

“The worry is, of course, that many low-income jobs in leisure and hospitality, and other industries, won’t return. This would mean unskilled workers competing for fewer jobs,” Frey says. “And not just against each other, but against robots as well. Our research suggests that most jobs that are likely to be automated are of lower pay.”

Frey notes that when former President Barack Obama’s Council of Economic Advisers used his team’s estimates, they found that an astonishing 83 percent of workers in jobs that paid less than $20 an hour were at “high risk of being replaced.” In comparison, workers in jobs that paid more than $40 per hour were only at 4 percent.

It’s already bad enough that we’re in a major recession, but automation increasing on top of it creates a perfect storm for working-class Americans. Autor says the likelihood the economy is going to quickly recover from all of this is very low.

“We’re going to be in a very deep hole, with millions and millions of people out of work, many businesses closed, and many people’s finances in not good shape,” Autor says. “Even if there was nothing else, it would be hard to have a quick V rebound. Even if nothing had changed. But then, on top of that, we have all of these induced changes in terms of business travel, telecommuting to work, induced automation, and the culling of a lot of smaller firms that will also have an effect.”

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