Technology is fundamentally transforming the way we work, fuelling excitement but also anxiety. A prolonged decline in overall employment is unlikely, but society will have to adapt to significant structural changes. Fundamental shifts in the structure of the labour market, such as the polarisation of the labour force and the rise of the gig economy, were already well underway before the pandemic but, post-Covid-19, these changes are likely to gain fresh momentum.
Listed below are the key macroeconomic trends impacting the future of work, as identified by GlobalData.
Covid-19 and manufacturing
Even before the Covid-19 emergency, the manufacturing industry was caught in a perfect storm triggered by the fourth industrial revolution, growing economic uncertainty, and the climate emergency. The current pandemic is a point of no return for manufacturing as the global supply chain is experiencing a level of disruption that has never been seen before. The factory of the future will play an important role in reducing the impact of the crisis and ensuring access to technologies that can help people and businesses to move forward. Technologies, like 3D printing and digital twins will become increasingly popular.
Covid-19 and office work
Post-Covid-19, office work will look very different. There is a possibility that some workers will never return to the office and will become permanent home workers. Many enterprises will close locations, downsize regional headquarters, and implement remote working practices. Twitter has announced that staff would be allowed to work from home permanently if they so choose, while Facebook expects that half of its staff could work remotely in the next five to 10 years. AI, cloud, collaboration tools, and cybersecurity will be the technologies supporting this transformation. The current crisis has highlighted some of the benefits of moving data and applications to the cloud, and enterprises will likely be more receptive to larger cloud migration projects in the future.
The term “employment polarisation” refers to the steep decline in middle-skill occupations – involving routine codifiable tasks such as sales, office, and administrative support, production, craft, and repair services. As middle skill employment has declined, manual and service occupations have become an increasingly central job category for those with lower education, alongside a simultaneous growth of high-education and high wage jobs catalysed by the digital economy. The Covid-19 pandemic is likely to further contribute to this imbalance, and it has exposed the profound employment divide between professional remote workers and essential workers.
The last decade has seen a surge in the number of gig workers. Examples include Uber drivers, Airbnb hosts, and Deliveroo riders. A 2019 OECD study found that the number of gig economy workers in Germany, Italy and UK combined was close to 942 million in 2018. The ADP Research Institute has reported a 15% increase of gig workers in US businesses over the last decade.. Gig workers typically lack social provisions such as pensions and health insurance, as their self-employed status frees their employer from the requirement to pay benefits or cover the risks of work. A new Californian law, passed in 2019, gives gig economy workers stronger employment rights and, if replicated across the US and other countries, would deliver a significant blow to the gig economy model as it is today.
Tech worker protests
Worker mobilisation among tech employees has reached new heights. Google’s internal protests over sexual harassment and union recognition began in 2018 and reverberated throughout 2019. Amazon’s employees staged a series of protests against “unsafe” and “appalling” working conditions throughout 2019. In May 2020, the ecommerce giant cracked down on protesters who advocated safer work during the pandemic, firing at least six of its workers after they took part in demonstrations. As the pandemic brings attention to precarious and often unsafe jobs, tech worker actions will add to the public scrutiny faced by Big Tech.
Wages are steadily rising in emerging economies, reducing the competitive advantage for traditional offshore destinations, such as India. In emerging G20 states, meanwhile, they tripled, according to the International Labor Organization. Re-shoring practices, which bring back offshored manufacturing and other types of jobs to a country, are likely to increase, due primarily to cost issues but also taking into account environmental concerns and, more recently, supply chain disruptions caused by the Covid-19 emergency.
Four-day week policies
Support for a shift to a four-day week is on the rise and may become part of the Covid-19 legacy. The practice is considered particularly beneficial to a good work-life balance, as it gives employees more leisure time without paying them any less. The New Zealand Prime Minister Jacinda Ardern encouraged businesses that could do so to adopt it as a way to boost a tourism sector badly hit by the crisis. There is resistance to implementing a reduction in working days, particularly from those organisations that need to provide customer service beyond standard office hours and for whom a reduction in employee availability would be hugely impactful.
Universal basic income
With the global economy likely to face a recession post-Covid-19 only comparable to the Great Depression, the debate around the universal basic income (UBI) – a periodic cash payment unconditionally delivered to all regardless of income – has resurfaced once again. A short-term form of UBI has been proposed in Canada, for example, where the Prime Minister Justin Trudeau pledged CAD$2,000 a month for four months to workers that had lost income due to the pandemic. In Europe, Spain is planning to introduce a minimum subsistence income, while France is discussing the implementation of UBI as part of its post-crisis recovery.
GlobalData is this website’s parent business intelligence company.