Since March, businesses across the country have seen revenues evaporate as the COVID-19 pandemic forced the shutdown of nearly all business activities deemed non-essential. With no end to the economic hellscape in sight, companies in a wide variety of industries are eyeing automation as a potential avenue to save on costs while boosting productivity in the post-coronavirus economy.
All industries considered, the job losses due to automation could be monumental.
The meat processing industry has seen its production upended by the coronavirus, leading many of the largest producers to consider increasing the level of automation in their facilities. In early spring, over 17,000 workers in meat processing plants across the country were infected, forcing the closure of facilities and reducing meat production by 35 percent from April last year. Tyson Foods, which employs 122,000 people and controls 33 percent of the chicken production market share, has invested $500 million in automation technology in the past three years. Tyson Chief Executive Noel White told the Wall Street Journal that automation efforts would likely be ramped up in the aftermath of the pandemic. Automating meat processing positions would insulate Tyson from future outbreaks by reducing the rate of infection within their facilities, allowing production to continue apace and preventing another meat shortage.
Tyson’s position is by no means an outlier; companies in virtually every industry are looking to integrate more automation into their business models.
The accelerating march toward automation has far-reaching implications across industries, according to Ravin Jesuthasan, a member of the World Economic Forum’s Steering Committee on Work and Employment. “Because of the concern of spreading the infection, we’re seeing more interest in automation in logistics, distribution and manufacturing.” he said in an interview with CNBC. “I actually think it’s going to affect virtually every industry in some way, shape or form.”
As Jesuthasan states, automation isn’t just being considered by companies who have seen their production fall off a cliff or their profits dry up. Rather, many of the industries increasing their investments in automation are those that have seen their importance increase dramatically during the pandemic.
According to the 2020 Honeywell Intelligrated Technology Study, 66 percent of e-commerce firms, 59 percent of food and beverage providers, and 55 percent of logistics companies are actively seeking to increase the role of automation in their business models. The pandemic has accelerated the decades-long changes in the way people consume, hastening the demise of brick-and-mortar stores as more people shop online. Online purchases in 2020 are up 28 percent globally, while buy online/pick up in-store purchases are expected to rise by nearly 60 percent this year. Market pressure from the massive and sudden growth of online commerce encourages companies to invest in technologies that automate logistical tasks, increasing the speed and efficiency of the online shopping experience from order processing to delivery. Over one million people work in the warehousing and storage industry; many could see their livelihoods evaporate as firms adjust to the rapid rise in demand for online goods by streamlining their production and distribution processes, which in this case means reducing the role of humans.
All industries considered, the job losses due to automation could be monumental. Prior to the pandemic, the Brookings Institute estimated that 36 million American jobs were at risk of being automated away. It is likely that the coronavirus will accelerate this trend. As the crisis continues, the pressure on companies to reduce labor costs and increase efficiency will mount, meaning that the number of jobs at risk of automation is partially dependent on the duration and severity of the pandemic-induced recession.
Historically, technological advancement creates jobs. Almost one third of the new jobs created in America did not or barely existed 25 years ago. But whether or not technology will continue to create more jobs than it displaces is a hotly debated subject among economists.
As automation eliminates more manual and blue-collar positions across the economy, our politicians urgently need to adopt policies that will help displaced workers develop the critical skills necessary to succeed in the new economy. Automation has the potential to help keep businesses afloat and insulate the national economy from future crises. But without significant and bold investments in vocational schooling, retraining programs, and technical education, America will fail its oft-forgotten blue-collar laborers, dooming them to poverty and government subsistence in the post-coronavirus economy.
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