COVID-19, Democracy and the Future of Work
The global economy was already being transformed before the COVID-19 pandemic hit, most significantly due to the impact of the Fourth Industrial Revolution on the nature of work—a trend knowledgeable observers were predicting would be felt more seriously in the coming decade. Now, governments will have to balance bracing for the impact of that meteorite with reduced revenues and a possible debt crisis post-pandemic.
One of the questions that arose in Washington in the immediate aftermath of the 2008 financial crisis was to what degree the crash would produce structural unemployment.
Because the disaster was man-made and corruption-driven, it was not fuelled by organic weaknesses in the U.S. economy and so did not produce either cyclical (reflecting the normal cycles of recession and growth) or frictional (post-university job searches, people changing cities) unemployment beyond the levels that would have existed without the force multiplier of a global market collapse.
At the time, the first decade and a half of the fourth industrial revolution had had a significant impact on how people worked, less so on where and for what price. The gig economy was brand new (the term was coined in the wake of the crash by former Vanity Fair editor Tina Brown in a January 2009 Daily Beast column). Many people now working at freelance rates, including in journalism, were then still working for actual salaries with benefits and reasonable income security.
Structural unemployment is defined as that “resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.” The industrial reorganization resulting from the unprecedented technological change of the internet—including automation, robotization, digitization and the systematic redundancy of many meat space jobs and workplaces—was already well underway when the COVID-19 outbreak became a pandemic, followed by the only example of self-induced, widespread economic stagnation in history.
The pre-pandemic structural employment status quo was already tilting from uncertain to precarious, at least in terms of sustainability, a fact underscored by a range of experts including Bill Gates, who said in 2014 that “Technology over time will reduce demand for jobs, particularly at the lower end of skill sets… Twenty years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.” His more recent rhetoric has been less alarmist, possibly because of the firestorm that prediction ignited. In 2017, McKinsey managing director Dominic Barton—then heading the Trudeau government’s advisory council on economic growth, now Canada’s ambassador to China—predicted that 40 percent of Canadian jobs could be lost to automation over the coming decade.
That pre-existing precariousness reflected a two-decade trend whereby technology-enhanced productivity and profits have been broadly valued above human livelihood and quality of life, partly due to the state capture of government legislative priorities by Big Tech and other industrial behemoths that has produced, among other deliverables, the decimation of unions. The pre-pandemic employment numbers did not reflect the relatively recent evolution in the practical implications of the words, “job”, “employment” and “career”.
The pre-pandemic employment numbers did not reflect the relatively recent evolution in the practical implications of the words, ‘job’, ‘employment’ and ‘career’.