COVID-19 has accelerated automation — and many jobs won’t come back

The U.S. is still in the midst of a pandemic-prompted recession, with August’s national unemployment rate at 8.4% — 4.7 point higher than the previous year. And many of those newly unemployed won’t see their jobs return.

Findings presented during a recent Federal Reserve Bank of Philadelphia webinar suggest that COVID-19 has accelerated automation across industries, and minority groups and service workers have been widely affected.

The September event examined previous recessions and the current recession to understand ways to deal with the negative outcomes presented by an accelerated rate of jobs being replaced by technology. Massachusetts Institute of Technology professor and researcher David H. Autor; Federal Reserve Bank of Philadelphia senior economic advisor Lei Ding and Future Works Strategy founder Anne Gemmell contributed to these takeaways:

Change in demand for services

According to Autor’s research, in 2018, the Bureau of Labor said that the U.S. would add 8.4 million jobs between 2018 and 2028. However, 4.6 million of them are concentrated across 20 occupations that are more likely to be automated.

“Those 20 occupations mostly do not require a college degree, are low paying and not economically secure,” he said. “The pandemic seems likely to slow or reverse that because if you don’t go to the office, you won’t be stopping for coffee along the way or to get gas.”

Autor added that the reduction of service labor in urban environments will largely affect minority workers, a group of professionals that is highly concentrated in cities. Minority workers as a group saw labor growth right before COVID-19.

More job losses in automatable occupations

MIT’s Autor said that many examples of automation — like warehouse-disinfecting robots — could become permanent and remain even after the pandemic.

“Firms will not roll back these innovations,” he said. “The net effect is we had many technologies that were waiting to be commercialized [and now] people are only waiting to realize their capacities.”

Hotel desk clerks, shuttle drivers, retail salespersons and servers are all examples of automatable jobs. According to Ding’s research, minority workers in those jobs are at a higher rate of permanent losses: Minority workers lost seven more jobs in technically automatable positions relative to non-Hispanic whites losing only 1.9 jobs, per 100.

Using the Great Recession as a reference point, the economic advisor said that the losses of automatable jobs could become permanent “if it evolves into a prolonged economic crisis.”

Four “pillars” future-proofing society

Gemmell cited innovation, education, land use and talent as four “pillars” that can help cities better plan for the future. Workforce planning and talent development systems nest inside economic development plans, she said: “You cannot have the former without the latter.”

Using the Automation Readiness Index, Gemmell worked to find how prepared the region is ready for automation. Innovation can allow cities to use automation to their advantage and position technologies so that careers end up in local areas. She believes that process needs to be racially equitable and provide access for people of all backgrounds.

Education in K-12 curricula is important for preparing today’s students for tomorrow’s workforce, the strategist said. Land use is increasingly important as companies like Amazon and ecommerce overall have changed how people shop. And cultivating and retaining local talent is imperative to making sure our region is commercially viable.

Watch the entire webinar below: