The Atlanta Journal-Constitution
Millions of jobs lost during pandemic may not return as businesses modify plans,
As businesses modify plans, many workers face need to retrain.
Millions of jobs that have been shortchanged or wiped out entirely by the coronavirus pandemic are unlikely to come back, economists warn, setting up a massive need for career changes and retraining in the United States.
The coronavirus pandemic has triggered permanent shifts in how and where people work. Businesses are planning for a future where more people are working from home, traveling less for business, or replacing workers with robots. All of these modifications mean many workers will not be able to do the same job they did before the pandemic, even after much of the U.S. population gets vaccinated against the deadly virus.
Microsoft founder-turned-philanthropist Bill Gates raised eyebrows in November when he predicted that half of business travel and 30% of “days in the office” would go away forever.
That forecast no longer seems far-fetched. In a report last week, the Mckinsey Global Institute says that 20% of business travel won’t come back and about 20% of workers could end up working from home indefinitely. These shifts mean fewer jobs at hotels, restaurants and downtown shops, in addition to ongoing automation of office support roles and some factory jobs.
“We’re recovering, but to a different economy,” Federal Reserve Chair Jerome Powell said in November.
The nation’s unemployed are starting to react to these big shifts. Two-thirds of the jobless say they have seriously considered changing their occupation or field of work, according to the Pew Research Center.
That is a significant increase from the Great Recession era, when 52% said they were considering such a change.
“We think that there is a very real scenario in which a lot of the large employment, low-wage jobs in retail and in food service just go away in the coming years,” said Susan Lund, head of the Mckinsey Global Institute. “It means that we’re going to need a lot more short-term training and credentialing programs.”
One problem for many unemployed people is they lack the money to retrain. The COVID-19 crisis has put many out of work for nearly a year, and the financial support from unemployment and food stamps is often not sufficient to pay their bills. The stimulus legislation being debated in Congress does not include any money for retraining.
“Trying to figure out what to do six months from now is hard when you are trying to make ends meet and you don’t have enough food,” said Brad Hershbein, who helps design and study retraining programs as a senior economist at the W.E. Upjohn Institute for Employment Research.
Take Serena Couch, who lost her job at Walt Disney World in Florida in April. She initially held out hope that she would be called back, but as the months went by, it became clear that was unlikely. Now Couch, 27, has started spending her days looking for jobs and trying to learn to code by watching Youtube videos and reading blogs.
“I’m trying to learn coding on my own, because that’s what everyone says to do when you’re in this position,” said Couch, who receives about $500 a month in jobless benefits, not enough to pay bills. “I can’t afford to pay for a program, so I’m just doing free programs online.”
Indeed, the number of workers in need of retraining could be in the millions, according to Mckinsey and David Autor, an economist at the Massachusetts Institute of Technology who co-wrote a report warning that automation is accelerating in the pandemic.
He predicts far fewer jobs in retail, restaurants, car dealerships and meat-packing facilities.
“Once robots are in place, we won’t go back. Once you’ve made that type of capital investment, you don’t tend to go backward,” Autor said. He wrote in his report: “These developments were sure to happen over the longer run. But the crisis has pulled them forward in time.”
Automation of jobs often speeds up during recessions, as companies look to cut costs and use periods of layoffs to experiment with new technologies. Some economists predict that there could be more automation now, because the pandemic forced companies to look for ways to minimize the number of employees in a workspace and the vast scale of the layoffs in the economy gives executives a unique opportunity to bring in robots.
Chewy, an online pet food and supply company, opened its first fully automated fulfillment center in Archbald, Pa., in October. Wall Street analysts who monitor the company closely say the facility, where orders are processed and packaged for delivery, needs only about 10% of the workers employed at Chewy’s other warehouses.
“When you can take labor out and replace it with automation, you are taking out a significant cost,” said Stephanie Wissink, a managing director at Jefferies who researches Chewy. “You won’t eliminate all labor.
Chewy will still have engineers and warehouse directors, but there won’t be nearly as many individual laborers walking those floors.”
Job postings in recent months help illustrate which positions are emerging and which are rapidly going away, said Andrew Chamberlain, chief economist at Glassdoor. Chamberlain has seen a rapid decline in posts seeking administrative assistants, human resources personnel, food service workers, beauty consultants, pet groomers, valets, professors, brand ambassadors and even physical therapists and audiologists. Only some of these jobs will come back. He’s hesitant to give an exact number, but he agrees that millions may need to find a new career.
“During a crisis, everything is on the table. You can easily push for big changes in a company,” Chamberlain said. “When you rebuild, you have a chance to rethink your workforce.”