Quarantines taking place all over the world to stop the spread of the new coronavirus is having are having disastrous consequences on the global economy and on unemployment. Aside from those providing essential products and services, a huge number of sectors will suffer from the global decreases in production and consumption.
However, not everyone suffers the same. Those who have accumulated lots of wealth (the 1%) will likely have a better time in large, nature-surrounded homes. The medium-class is hit hard and gets hurt but most will likely make it through the storm. Unfortunately, the large majority of people in the lower class with lower salaries and little savings will be the ones suffering the most.
It becomes then crucial to understand what jobs are most commonly performed by these people to help them transition to new ones where they can have higher wages and job security once the storm has passed. Not only because many of the businesses they work on won’t survive the economic crisis but also because there’s a shortage of tech skills they can benefit from.
Coronavirus Is Bringing an Economic Recession and Some Sectors Will Face Greater Threats
Recent projections from the World Trade Organization foretell an economic downturn and job losses worse to the ones caused by the global financial crisis in 2008. Moreover, the OECD declared global GDP growth could fall this year to 1.5% – to nearly half compared to the 2.9% rate predicted before the coronavirus outbreak. There’s also a BBC piece that clearly highlights how different economic sectors across different countries are facing a recession.
People all over the world are increasingly doing online shopping, using videoconferencing and other tech tools platforms to stay connected and they are having more time available to surf social media. This means tech and telecom companies are in a privileged position to provide consumers with digital-related solutions that are having a huge demand.
However, as +100 governments all over the world are introducing travel restrictions and even closing borders to try to contain the virus, many economic sectors are being hurt. A report from Deloitte shows that tech and pharma industries are holding on relatively well. However, airline, railway, and road transport areas are being particularly hurt. The same is true for the travel agencies, the hotel industry, providers of leisure experiences like city tours or surf schools in near-shore areas, hairdressers or other small owned businesses.
Central banks in more than 50 countries have cut interest rates to try to strengthen their economies and many governments have already started preparing extraordinary budgets and recovery plans. However, not all businesses will fit the criteria to benefit from this financial aid (often in the form of postponed social security obligations and/or layoff policies) and many will unavoidably close.
According to the International Labour Organization, “nearly 25 million jobs could be lost worldwide due to the coronavirus pandemic”. Economists at the Fed’s St. Louis district project total employment reductions of 47 million. But would these workers keep their jobs in the long-term if it wasn’t for this pandemic? How would they be affected by automation developments?
The Coronavirus Recession Is Leading To (Some) Unemployment Automation Would Have Caused Later
A Mckinsey report said in 2019 that until 2030, 75 million to 375 million workers (3 to 14 percent of the global workforce) would need to switch occupational categories. These changes will be caused by increases in automation where robots are expected to destroy old jobs and create new ones.
An Oxford Economics Report explains this growth claiming some robots are now cheaper than humans. Their average unit price is falling as their microchips have more processing power and their batteries last longer. Moreover, robots are also becoming smaller, more sensitive to their surroundings and more cooperative with humans. They learn fast and continuously because of machine learning and they can share knowledge among themselves. In summary, robots are becoming cheaper, more capable, more powerful and more desirable.
According to the latter report, jobs in the areas of transportation, construction/ maintenance, and office/ administration are the ones most vulnerable to robotic developments and automation. We can nowadays find some jobs within these areas that are being affected by the coronavirus outbreak.
From Coronavirus and Unemployment ot the Skills of the Future
The job market of the future will need unique human qualities such as social intelligence, systems thinking, imagination, innovation, creativity, improvisation to solve unexpected problems or empathy. These skills aren’t (at least yet!) ready to get an algorithmic shape.
It will also be hard for robots to understand the complexity of human emotions as a result of one’s unique genetics and life experience and to provide personal and professional guidance. Jobs in which these skills are highly needed are unliked to like be threatened.
At the same time, there is already a human workforce working on creating and programming these very same robots. These are highly-specialized professionals with a deep understanding of areas such as mechanical engineering, code development, sensors implementation, data analysis, blockchain…
Moreover, the tech industry is viewed by Americans as the most resilient in these times, a Reputation Institute Survey shows. And this industry involves much more than programming robots. It includes, for instance, developing websites with plenty of different functionalities, SaaS solutions or securing the bandwidth, storage, and safety of all the other tech-dependent sectors: from the financial sector to huge retailers like supermarkets, the healthcare sector or education.
Reflecting About the Skills for the Future and a Tech Career
If becomes clearer now that the coronavirus pandemic is leading to a global economic recession. Locally, countries are trying to minimize the damage organizations of all kinds are facing but the loss of jobs, especially low-skilled jobs and others providing non-essential services is unavoidable.
The truth is that many of these jobs have been providing workers with low-incomes. In times like these, these workers are the ones left in more fragile, vulnerable situations. We take the fact that some of these people will need to search for now jobs once the storm has passed to broader their views to the fact that some jobs are likely to be automated in the short-medium term.
In this way, we have discussed some skills that will hardly be automated. It will be highly valuable for the unemployed people who are safe in their homes to take this time as an opportunity to learn new, more specific, tech valuable skills. There are plenty of e-learning options available.
More than ever, it is important for people to get better informed about future market trends and understand if a more specialized, skills-intensive, tech career would be of interest. Keeping in mind that this would likely open doors to more stable, better-paid jobs.
[Image credits to Shutterstock]
