The covid crisis will lead to increased automation

An increasing amount of literature predicts a Jobless Future, because of automation and AI – with the Bank of England recently estimating that 40% of current jobs – including some considered to be ‘professional’ could be lost in the next few decades, a result of the Fourth Industrial Revolution, or a Second Machine Age.

Yet in capitalist free-market economies, the introduction of labour-saving technology does not occur at a steady, gradual pace, or is it even.  Instead, it’s more likely automation happens in bursts, or in response to economic disruption. But this doesn’t always happen. After the 2008 financial crash, rather than investing in new technology, the UK economy continued to expand, albeit slowly, because of an increased supply of cheap labour (a ‘reserve army’ ranging from increased numbers of students trying to find part-time work, but also increased supplies of workers from other EU countries).

There will also significant time lags between the investment in new technology and visible positive outcomes – or even a ‘J’ curve, with productivity initially falling, as firms restructure and reorganise. However, it is likely that the economic downturn caused by the Covid shutdown, intensified by a hard Brexit will lead to wider changes in work and employment and the continued substitution of labour. The pandemic has speeded up existing trends in online retailing, with high street shops closing but supermarket chains, now able to shed store staff. 

Many of the ‘furloughed’ jobs that won’t return after the crisis, are in sectors most at risk – for example, 250 000 jobs in hospitality are predicted to be lost to automation (Financial Times 15/12/20). But firms trying to stay above water, in sectors like retail, more than proportionately affected by Covid, will also be under pressure to introduce labour saving technology in the immediate future.  Machines do not fall ill, they do not need to self- isolate to protect others, neither do they need to take time off work.

Studies about the effects of automation on employment have highlighted the dangers of growing income inequalities. While companies streamlining office space, directing their staff to continue to work from home after the pandemic will eventually be able to subcontract  to cheaper areas, it will be lower paid front line workers, less likely to be unionised, who will lose out first.

2 thoughts on “The covid crisis will lead to increased automation

  1. I’m not sure about this. Read Benanav’s contradictory prediction. For instance, many jobs in hospitality are difficult to automate.

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