Coming changes to the job market will disproportionately affect those in unskilled roles, creating an uncertain future for some of the most disadvantaged.
As COVID-19 recedes in Australia, and in the harder hit UK, attention is turning more and more to economic recovery.
Spatially, it looks like CBDs will to a greater or lesser degree be reshaped by the impact of home-working and changed patterns of production: how will we use offices in future, and where? Consumption: what will happen to cafes and bars? And circulation: how will we maintain mass transit and what will the role of AVs be?
Socially, we will need to be focused on groups whose jobs have been most permanently damaged, even wiped out, by Covid and the associated acceleration of digitalisation seen in the last 12 crazy months.
Research has suggested that already internationally, there has been a socio-economic divide in terms of the impact of Covid with the knowledge worker middle class not just surviving but even flourishing. Though I have concerns both about the health impact of not leaving your room for work and the longer term loss of employment as corporations discover “working from anywhere” means they can source staff online in Bangalore a lot cheaper than even in Bournemouth or Gosford.
The knowledge workers have seen their work continue and their savings increase by not commuting and socialising, and by buying online. The current explosion in house prices in Sydney as in the southeast of England has been aided by those savings pouring into bricks and mortar.
However, we know if “workers by brain” have been OK, “workers by hand” have had a more mixed experience. Many have been able to soldier through as part of maintaining vital services, but many have lost their incomes and ultimately their jobs for good.
We know there are question marks over the futures of the jobs of millions in the UK and hundreds of thousands here in Australia in the wake of this crisis. This impact is partly direct and in some cases short term. But for many their jobs have either already been automated in the crisis or will be so shortly, threatening to make the recovery ahead a jobless one.
Recent work by international management consulting frim, McKinsey & Co suggests that those working in outdoor production such as construction, farming and other work requiring lower proximity and few interactions with others outdoors, have survived and will do OK.
But the McKinsey work also says that – and I agree – “COVID-19 may propel faster adoption of automation and AI, especially in work arenas with high physical proximity.”.
Compared with their pre-Covid estimates, McKinsey now expects the largest negative impact to fall on workers in food service, customer sales and less skilled office roles. And what growth they foresee in warehousing and transportation via the e-commerce and delivery economy will not offset the decline in many low wage/low skill/low entry level jobs.
Low wage jobs will not be the ones increasing in number. They believe now that most growth will happen in high wage jobs and that “more than half displaced low wage workers may need to shift to occupations in higher wage brackets and will require different skills to remain employed”. To be clear this means the most disadvantaged workers, without college degrees, may have the biggest job transitions ahead and what jobs there will be will need qualifications beyond secondary education.
This brings me to a key issue of spatial inequality as real in Australia as it is in the UK. McKinsey itself notes that “the scale of workforce transitions set off by COVID-19’s influence on labour trends increases the urgency for businesses and policymakers to take steps to support additional training and education programs for workers”. Great. True. Bring it on.
But I add, communities and SMEs in regional areas are precisely the ones in which more low wage jobs requiring lower educational attainments are in greatest danger of disappearing.
Simply put: there are more such jobs per head in regional economies than in the knowledge rich economies of the main cities.
A bit more than a few job training schemes or even some medium sized capital programs around town or regional centre renewal will be needed to level-up or equalise outcomes in such a changed and adverse context as such communities and businesses will find themselves in.
Yes, there will be some new talent finding its way into the regions as London and Sydney lose some allure after Covid and that may bring some new private sector investment with it.
But more, much more, over many decades, will be required to make a dent in the spatial inequality of both the UK and Australia made much worse by Covid. Do governments in either Australia or UK – from local through to state to national realise this? Do we as a community realise this?