The jobs aren’t coming back — well, at least, a lot of them aren’t. Eventually, Covid-19 will be beaten — vaccines and therapies will be found and widely deployed. However, that doesn’t mean the jobs that the pandemic has taken are coming back.
Of course, some will return. For instance, restaurants will return to in-house dining and hire more waitstaff. But the rethinking and reorganization that Covid-19 has induced will have longer-term impacts. Many businesses have already figured out how to get their requirements filled differently — without the need for as many humans.
Stone X Group director of global macro strategy Vincent Deluard has encapsulated the situation quite crisply: “I would summarize 2020 as the bear market for humans. Like many things, Covid-19 is just accelerating social transformation, concentration of wealth in a few hands, massive inequalities, competition issues and all that.”
Successful companies are relying increasingly on intellectual capital and social capital such as brand value. Deluard created a crude measure of the number of intangible assets a company has per employee — the value of the company’s IP and brand recognition divided by their total amount of staff. Dividing the S&P 500 into deciles based on this measure, he found the top decile has returned 18% this year versus a 19% loss for the bottom decile.
A report from the University of Chicago projects that “Covid-19 shock caused three new hires for every 10 layoffs [and] that 32-42% of Covid-induced layoffs will be permanent.”
Not all this job loss will be due to AI; there are other factors like telecommuting. However, a recent study from Oxford University found that roughly 47% of jobs are at serious risk because of AI specifically. Truck and taxi drivers, retail store staff, physical manufacturing workers, fast-food service workers and miners will likely be among the first jobs to go.
Some jobs should last a bit longer. Delivery and courier jobs should last until suitable drones and automated delivery vehicles emerge from testing to deployment. Logistics management jobs like event planning should last until online task exchange and coordination systems get more sophisticated. Writers should stay employed until NLP systems get a few steps beyond GPT3. Advanced software system engineers should be needed a while, but routine programming tasks will increasingly be automated by machine learning systems. While human lawyers will still be around for a while, the vast bulk of routine business law tasks (e.g. those involving customization of online templates to particular situations) are in the midst of automation by a host of startups.
Many people are already effectively employed by automated digital systems. If you’re a gig economy worker doing tasks for clients on Upwork, the Upwork software framework itself is more like your boss than any particular client. As Upwork and similar software becomes increasingly intelligent and adaptive, this can make your job better, not worse.
The same Oxford study references a concept called the “technological bottleneck” — an attempt to determine how “at risk” a job is of displacement. The bottleneck takes three factors into account:
1. How much creative intelligence the role needs.
2. Whether manual manipulation and perception are required.
3. The role of social intelligence in the role.
The bottom line is…