The COVID-19 outbreak has forced millions of people around the world to stay indoors for months in what has been one of the most significant social experiments in history. For many people, working from home has become the new normal, but the impact of the lockdown and social distancing policies is far more profound: it has radically transformed our collective perspective of what is considered essential work.
The health crisis has ushered in a new future of work paradigm, with wide-scale remote working and automation and increasing inequalities between the haves and the have nots. The arrival of the new future of work caused by the COVID-19 crisis has affected all workers, but in different ways. For example, most white-collar workers were asked by their employers to perform their work remotely from the outbreak of the coronavirus. Some tech companies went one step further by announcing their employees can work from home permanently if they choose to do so.
For those in the informal and gig economy, the global lockdown has exposed the precarious nature of their work. According to a recent analysis conducted by McKinsey & Company, in Europe over 20 million jobs are on the line, affecting 74 per cent of workers in the accommodation and food sector; 50 per cent of people in arts and entertainment; and 44 per cent of wholesale and retail employees. Contrastingly, for professional services, finance and insurance, and information and communication, the potential loss of work adds up to a relatively forgiving 3.4 million.
What is more worrying is the overlap of pandemic job losses with those vulnerable to displacement through automation. For blue-collar workers, employers have used the health crisis and the social distancing policies as a way to threaten to replace their workers with machines. This is not yet widespread, but it has provided a window into a future where the threat of machines displacing them from their jobs is closer than previously thought possible.
Looking at the future of work in Europe, a McKinsey study has shown that 24 million jobs, almost half of those risking displacement through automation, are also at risk in the post COVID-19 economy. This overlap varies between sectors and also according to educational attainment: about 80 per cent of jobs at risk are held by people who do not have a tertiary education.
Given the tens of millions of jobs at risk across Europe and the globe, governments and companies alike need to take decisive action to mitigate this risk and focus on an important lesson for the future: providing people with opportunities to learn new skills throughout their lifetime, known as re-skilling or up-skilling.
Even before the pandemic, some major companies were doing this. Amazon pledged $700 million to retrain 100,000 employees for higher-skilled jobs in tech; JPMorgan Chase made a five-year $350 million commitment to develop technical skills in high demand; and Walmart invested more than $2 billion in wages and training programs.
The first half of 2020 has seen employees in apparel companies such as Brooks Brothers and New Balance producing surgical masks and gowns, while others in Tesla, Ford, and General Motors have retooled their factories to produce ventilators from car parts. While such examples of rapidly re-skilling employees in response to dire economic conditions or a health crisis are laudable, they are not sustainable.
More and more, individuals need to develop soft and technical skills in order to lower the risk of being made redundant. But the window of opportunity to invest in human capital and help those most affected by the recent developments is closing rapidly.