As the United States Economy exits the recovery stage from the disruptions caused by COVID-19. Many private industries are returning to gross output levels similar to the pre-pandemic years. One can imagine as demand for goods and services should begin to pick up as individuals return to work or are consuming amassed savings during this time. The near-term outlook is promising as we recover, but what about growth? During the epidemic of COVID-19, companies have ramped up technological innovations to suit the restrictions that were recommended to be put in place by health officials. Unfortunately, the adverse effects of this virus impacted the bottom 50% of income earners the most. Individuals who worked within transportation, retail, hospitality, and others whose job requirements focused on interacting with individuals in customers were subject to these economic shocks. However, in a previous piece I wrote before, “Telehealth Boom”, I discussed the impact of Telehealth services on the administering of healthcare virtually. The telehealth industry saw a boost in liquidity of $14 Billion, which doubled the amount of venture funding entering the industry the year prior. Many of the care providers were able to pivot and offer services to their customers, and employees could keep their jobs with their ability. In this article, I’d be looking to analyze some effects of the recent shock on the labor market caused by the pandemic and analyze what has historically occurred during technological advancements and how the future labor force responds.
Firms are generally motivated by maximizing profits as much as possible; thus, they may be inclined to take on initiatives if there can be reduced costs while productivity remains constant or improves. This can have adverse effects on the workers who may no longer need it in the process. It can be easy to be upset with such advancement in technology, displacing workers out of a job. However, all is not lost for that worker, despite the possibility of having to re-learn a new career path or move to a new firm. Technological advances have made few careers obsolete, and in addition, these advancements can create new forms of work. In an MIT study, The Work of The Future, they cited the invention of “new jobs” in the distribution of employment occupations over 1940 and 2018. Farming and Mining occupations had one of the minor shares of new employment, reflecting a shift away from those industries. Growth in new types of jobs was prevalent within Professional, Clerical & Administrative careers. Over 60% of the jobs done in 2018 had not been “invented” in 1940(MIT, 2020). Despite losses within some industries, theory suggests that the cost savings incurred by consumers can lead to spending elsewhere, which should increase demand for labor.
As the pandemic enters its late stages, I think it will be interesting to analyze the decline of jobs and the creation of jobs and how some jobs have adjusted. A few examples I have found were the shift for personal trainers to virtual platforms, allowing them to build more extensive client capabilities while they may not have had to pay for fees of using a gym area. Event coordinators pivoted to virtual settings through video-sharing platforms to organize birthday parties or special occasions. Interior designers potentially saw an increase in demand for services as businesses needed to redesign their offices to suit social distancing needs. New types of work included contact tracers, screeners for healthcare facilities. There were also increases in jobs(at times seasonal); Amazon is one company that comes to mind, as they hired over 400,000 positions to their staff to deal with the increases in demand for eCommerce shopping. This shows that there can be increases in jobs, though not high paying, it is an opportunity for someone to earn a living.
As mentioned, some will benefit and others who will not be as fortunate, a harsh reality. It may be time for an equipping of skills that may provide economic value. This can be possible as new technologies often take many years of development before they enter the marketplace. Depending on the stage of technology within the particular industry, this can allow individuals to develop skills so long as they are accessible. The role of the government in enacting policies will be critical through investment in its population, providing an opportunity for those who want to. Individuals can take advantage of free courses offered by companies or online learning hubs to take initiatives to ensure they are prepared. As we look ahead to our future, it is important that we dont turn a blind eye to the displacement of jobs.