COVID-19 accelerated many technology trends that were already in place. The idea of robotics and artificial intelligence taking people's jobs is nothing new. However, this is taking on new meaning as a result of the virus.
Technological unemployment is being hotly debated. Many feel that there is nothing to worry about. After all, the view is that technology always creates more jobs than it destroys.
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In fairness, that was always the case. There are a couple items that might shoot holes in this defense.
The first is the fact that while technology creates more jobs than it destroys, there is often a time delay. Many point to the Luddites as the poster children of a group of people who senselessly fought against technology. The problem is that things did not end well for them. In fact, the first 60-70 years of the Industrial Revolution were not very smooth or friendly to workers. Lest we forget child labor and fights with management that ended up in gunfire on a number of occasions.
Secondly, we are seeing technology advancing at a pace never seen before. Artificial Intelligence is something that humanity never dealt with before. The potential job destruction is not even within our comprehension at this moment. It will, however, become clearer as the next few years go by.
These points are exemplified by an article in Forbes that quotes the World Economic Forum:
Millions of people have lost their jobs due to the effects of the Covid-19 pandemic and now the machines will take away even more jobs from workers, according to the WEF. The organization cites that automation will supplant about 85 million jobs by 2025. WEF says there’s nothing to worry about since its analysis anticipates the future tech-driven economy will create 97 million new jobs. Currently, approximately 30% of all tasks are done by machines—and people do the rest. However, by the year 2025, it's believed that the balance will dramatically change to a 50-50 combination of humans and machines.
This is a fairly typical outlook. We often hear of how many jobs will be created by (fill in the blank). Unfortunately, as history shows us, often they do not materialize as many thought.
There is also, naturally, the idea of creating quality jobs, something that did not take place in the last few decades.
Many respond to this by claiming that we are going to have to resort to retraining. It is another idea that is great in theory but fails in practice. Again, historically, we find that the success rate of corporate America in retraining employees is abysmal. We see a rate of around 10%.
If we need to retrain 3 million people over the next half decade, it is likely that only 300K are accomodated.
We are looking at a situation where millions of people are going to lack the skills to gain employment in the near future. COVID-19 appears to only quicken the pace that this all if happening.
This latest recession is likely going to produce another "lost generation". During the last economic collapse, we saw millions of people who lost their income status, never to get back to that place.
These people were in the mid 50s and were cast aside by Corporate America. They had to do whatever they could to make ends meet such as driving cabs or buses. In the end, they just bought some time until they could take Social Security. In short, their entire financial status was destroyed.
This time, we will find many others affected. With AI, we are not looking at only blue collar workers who are at risk. Many office jobs are being eliminated at a pace that exceeds that even seen in manufacturing.
Fortunately, with the expansion of cryptocurrency platforms, people are going to have options provided for them. As token distribution grows on all levels, people will gain choices they never had before. This holds for both the developed countries as well as those lagging behind.
However all this unfolds, it is obvious people are going to need options.
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