The heroes of the pandemic could be unemployed once the crisis is over

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Heroes today, pink slips tomorrow? That could be the future for many front line workers now stocking grocery shelves and making deliveries, who could soon see their jobs blasted away as companies strive to operate as efficiently and cost effectively as possible. Recessions and boosts to automation occur together, and this recession is happening on top of a pandemic, on top of an industrial revolution toward tech. None of that bodes well for the workers who are needed today, but who have skills that could be replaced by automation sooner rather than later.

That Canada and most of the world is in a recession is in little doubt. In a forecast released this week, the International Monetary Fund compared the current downturn with the Great Depression, forecasting a contraction in 2020 of 3 per cent globally and 6 per cent in Canada. (Those estimates might actually look wildly optimistic if their assumption of the pandemic being brought under control by the fall does not hold true.) As this plays out, industries from hospitality to auto manufacturing will look for ways to save money, which paradoxically may mean spending it on technology.

We have many examples of how this works. During the last major slide in oil prices in 2017, Alberta producers scrambled to find ways to operate more efficiently. In the process, they found a way to use two people in a control van to operate a diesel pump for shale drilling. In the past, that job took 30 people. Earlier recessions caused many industries to use things such as voicemail to eliminate traditional support staff. Once there is a push to take down wage bills, technology seems cheap in comparison.

A recession is what economists term a “cyclical” change (one that will ebb as the business cycle shifts) while the move to technology is a “structural change” (one that is here to stay). We were already in the midst of that structural change before the recession hit; the “Fourth Industrial Revolution” (as it has been called by the World Economic Federation) was in full swing. A merging of the physical, digital and biological worlds, that revolution is creating new ways to get work done, which could have been fine. Historically – from the industrial revolution to the assembly lines of the 20th century – productivity improvements eventually result in workers getting a bigger share of the economic pie. But the magnitude of the change happening this time makes many skeptical that history will repeat itself.

Of course, recession or not, there are always ways that automation has an edge over workers. Robots, for example, do not get sick, ask for raises, require career development chats or even want to come to the holiday party. More importantly, they can do tasks that are dangerous for humans. If a robot can defuse a bomb rather than forcing a police officer to do it, that makes officers’ jobs safer. If automation can complete the tasks of coal miners, workers do not need to take on that dangerous and disease-inducing work. If a front-line grocery store worker can be replaced by automation that stocks shelves or rings up purchases, then fewer employees need to risk picking up a virus that could kill them.

It would be naive to think that companies are not now accelerating work on technology with the intent of replacing workers. Amazon was always open about their desire to replace drivers with drones. The fact that they are hiring thousands in the short term will not change that. Indeed, the company two years ago experimented with “Amazon Go” convenience stores with no cashiers, a set up that now sounds safer for both workers and customers compared with traditional stores. This week, some large food manufacturers warned that COVID-19 outbreaks among employees had caused plants to close and threatened supply chains. If the option was available, keeping things moving with robots would look like a brilliant move from many angles.

Right now, we are focused on the immediate effects of the pandemic, but maybe we should be thinking much more long term. If things are normal, or normal-ish, in six months then perhaps many of the one million Canadians who lost jobs in March will eventually get rehired. That is the way that cyclical changes work out. For the workers caught in the structural changes, having a job now may not be a harbinger of having one for much longer. To make sure that is not the case, companies should be thinking long term and making it their priority to train their front-line workers for other jobs, and governments should be a part of the solution as well.

The thanks for our current heroes needs to last a lot longer than the length of the pandemic.

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