CARDIFF GARCIA, HOST:
Hey everyone, it's Cardiff. This is THE INDICATOR FROM PLANET MONEY. Ever since the COVID pandemic started, a lot of attention has been given to the effects of technology in helping people do their work, like more people using Zoom or Slack to communicate so that they don't have to go into the office. That's just one obvious example. But these office workers who can keep doing their work remotely, they tend to be doing pretty high-skilled jobs, jobs that require college degrees and that pay pretty well. But the use of these same technologies might end up having longer-lasting and underappreciated effects on other workers, workers who do lower-paid jobs which often do not require a college degree, and that has not gotten as much attention.
So today on the show, I am speaking with Liz Reynolds. She leads the task force on the Work of the Future at MIT, which studies the ways that new technologies change the labor market. And along with the labor economist David Autor, Liz just finished a new report on the four consequences of the COVID pandemic for jobs, and specifically the consequences for lower-paid work. Liz will share those four consequences with us right after a quick break.
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GARCIA: OK, four consequences for the labor market of the COVID pandemic according to Liz Reynolds of MIT. First, there will be more telepresence. Telepresence is simply when a worker can do a certain job without having to be in the same place where the actual work is being done to make it safer. So for example, Liz says, think of the unmanned submarines that are now being used to scan the bottom of the ocean floor so that humans don't have to be there or machines that do things in space or robots that can diffuse landmines.
LIZ REYNOLDS: That's true telepresence, you know, where you're not putting humans in there, but you are bringing robotics to do the work that humans can't do because they're under very constrained circumstances.
GARCIA: And in the time of COVID, telepresence just means doing things remotely to make social distancing easier. And the trend that is probably the most obvious right now is simply that a lot of high-skilled office workers have shifted to doing their jobs from home during the pandemic. And at least some companies are probably going to let them keep doing that, maybe permanently. It, after all, saves companies money on office space. And if that is the case, it could end up having a big consequence for other workers - the workers that provide services every day to all the people who do go to work in offices.
REYNOLDS: And, in fact, what happens is we now are not going into the office. We're not engaged in business travel. We're not going to the doctor's office. And that has this ripple effect. So it means that there are fewer people cleaning buildings or providing security, fewer people working in hotels or restaurants, taxis and ride hailing - all of that.
GARCIA: Suddenly, the demand for these jobs has collapsed, and wages for these jobs had already been growing only really slowly for the last few decades. But at least the jobs existed. Now they don't. So if the increase in telepresence remains after the COVID crisis, that's kind of a double whammy for these workers.
The next trend in the labor market affected by the COVID pandemic - urban de-densification. Basically that just means that dense cities like New York will not be as crowded because a lot of people left them during the pandemic, especially wealthier people, people of means who have a second home or another option for where to live. And those people who left might be slow to come back. So along with more people working remotely, de-densification will also lead to less demand for personal services, for those same jobs being done by workers without college degrees. And these workers in cities were already struggling before the pandemic, says Liz.
REYNOLDS: Cities used to be the place where you'd come in with that low-skilled job and then you'd move up this kind of escalator, this ladder up to the middle-skilled work. And that's just not happening anymore. Those jobs are not there anymore. So all of a sudden, the city is looking even more problematic for the low-skilled worker.
GARCIA: So this is a crucial point. The benefits of working in a dense city had already been falling for workers without college degrees. These workers used to get paid a premium for working in a city rather than working in less dense towns and rural areas. That premium went away, and now a lot of the jobs that were left for them have been lost because of the pandemic. So if some of that de-densification of cities continues even after COVID, that could make things even harder for them.
And that brings us to trend No. 3. And this one Liz is pretty sure is happening. Small businesses have been brutally damaged by the pandemic, which means that big companies are likely to take over a bigger and bigger share of the market.
REYNOLDS: We already have the data. I mean, I think if you look over the last few months where it's obvious that at least 100,000 small businesses have closed, a very disturbing high percentage of minority-owned businesses have already closed. So this is one where, you know, small businesses just don't have the liquidity or the access to capital to often keep going without income or revenue for several months.
GARCIA: Liz notes that big companies tend to pay a smaller share of the money they make to their workers than small businesses pay. So if big businesses take over more of the market, then workers could end up getting less than if more small businesses had survived. And that's not the only effect.
REYNOLDS: Small businesses are important for placemaking, right? A lot of the smaller communities or, you know, suburban communities or neighborhoods are all about small business. And so you not only are losing jobs and, you know, the wages associated with it, but you're also losing the fabric of a community.
GARCIA: And finally, the fourth consequence of COVID-19 for the labor market - automation forcing. This is the idea that companies have now been forced to start using technologies to do certain jobs without people. That's because COVID-19 has made some work environments too dangerous.
REYNOLDS: There are some examples from MIT of, you know, launching a new fleet of warehouse disinfecting robots to reduce COVID risk at local food banks or in other offices. We have seen the deployment of aerial drones to deliver medical supplies or, you know, monitor social distancing in crowds. In meatpacking - right? - where there's just been terrible, terrible reporting of thousands of workers being sick, there's a real focus on trying to get robotic automation to work in a very complicated place like meatpacking.
GARCIA: These effects are a little bit hard to measure, hard to quantify. But that doesn't mean that we can't already draw some conclusions, Liz says.
REYNOLDS: But what we do know is that in moments of crises like this, firms are going to innovate and often use either technology or figure out how to do something with fewer workers, and they can't unlearn what they've learned, right? They will - if they figure this out, they usually aren't going to go back and say, oh, well, let's rehire those workers who I haven't been using for a few months - right? - even though I kind of got through this period.
GARCIA: Liz says she thinks it is possible that the labor market could adjust, that even if these four trends hold after the pandemic has passed, a lot of these lower-paid workers might still end up finding other jobs eventually, jobs that there is demand for as the economy gets healthy again. But that adjustment could take some time, and during that time, things could just keep getting really tough for these same workers. So in the meantime, Liz says, as Congress is now contemplating a new stimulus and aid package for the economy, it might be good for the government and other institutions to do whatever they can to speed that adjustment along.
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GARCIA: We'll link to this paper by Liz Reynolds and her colleague David Autor over at npr.org/money if you want to read more. This episode of THE INDICATOR was produced by Darius Rafieyan and fact-checked by Brittany Cronin. THE INDICATOR'S editor is Paddy Hirsch, and THE INDICATOR is a production of NPR.
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