Some jobs will never return, reinvention needed

Will businesses reopen and jobs come back?

That was the crucial question in March-April las year when countries around the globe, in a desperate move to slow the spread of the coronavirus, were in a race to shut down their economies one after another by imposing restrictions on movement of people who are behind the wheels of the economy.

Millions of workers from Europe to America, Asia to Africa were becoming jobless as factories appeared unable to pay their workers after being shut down. Economists and rights activists worldwide continuously urged governments and companies to take concerted and extraordinary measures to protect workers from brutal consequences of joblessness. Advanced economies distributed billions of dollars in unemployment benefits among people who became jobless due to the lockdown induced by the pandemic.

In the USA, the world's largest economy, around 39 million Americans have lost their jobs in just nine weeks since the outbreak of Covid-19 – which has not been seen since the 1930s' Great Depression.

Up to 59 million jobs in Europe were at risk from permanent cutbacks as well as reductions in pay and hours.

Against the hopes for getting back the jobs there were cautions issued by economists and experts regarding return of jobs. Laura D'Andrea Tyson, a professor at the Haas School of Business at the University of California, Berkeley, was among them with the forecast that many lost jobs will never return.

Let us recall here her forecast made in May to focus on the reality.

"The pandemic and subsequent recovery will accelerate the ongoing digitalization and automation of work – trends that have eroded middle-skill jobs while increasing high-skill jobs during the last two decades and contributed to the stagnation of median wages and rising income inequality. Many low-wage, low-skill, in-person service jobs, especially those provided by small firms, will not return with the recovery," she writes for the Foreign Policy.

She says changes in demand, many of them accelerated by the economic dislocation wrought by the pandemic, will change the future composition of GDP. The share of services in the economy will continue to rise. But the share of in-person services will decline in retail, hospitality, travel, education, health care, and government as digitalization drives changes in the way these services are organized and delivered, notes the professor who was a former chair of the US President's Council of Economic Advisers under the Clinton administration.

How is the situation now, a few months after reopening of the economy?

Jobs are returning in the US, but at a much slower rate than required. But workers there are protected – with unemployment benefits delivered to their accounts on the Christmas Eve. This allowed them to celebrate Christmas and New Year happily with families as the government paid allowances for children as well.

Workers in Bangladesh are not that much lucky. Unemployment is not even recorded, forget about benefit or allowance.

The government planned to support 50 lakh families with Tk2,500 each, but those families had to pass one of the two Eid festivals without getting the help. Local and central administrations took months to prepare the list, and when it was prepared it was marred with inclusion and exclusion errors. And a fifth of the targeted beneficiaries were left out.

The pandemic forced the government to go for a two-month-long shutdown, closing the economy and leaving more than one crore workers, mostly in the informal sector, out of work and income.

Of the total 60.9 million workforces, only 14 million are on monthly payroll in the formal sector. Daily wage-earners would account for 10 million, 7 million are household helps and 27 million are self-employed doing small businesses or repair work or in service sectors.

Those who work in the export-oriented apparel sector were entitled to get wages as the government provided the owners with low-cost funds as wage supports. Other manufacturing sectors either suspended or reduced productions for months, cutting jobs or paying partial wages.

In the service sector, transportation, hotel, restaurant, men's and women's salon workers were uncared for.

The worst sufferers were workers in the informal sector – those in small businesses creating jobs for themselves and others. Researchers indicate the percentage of informal sector in total workforce, but no data is there about their numbers, who work where and how they survive.

They are not clients of banks, so not entitled to stimulus loans.

Even after the shutdown was lifted in June and economy reopened gradually, many small and medium businesses are still facing a grim reality to restart. Many of them have become unable to pay their workers. They have opted for further job cuts for their survival, throwing more people out of job.

Migrant workers who returned from different countries, particularly from the Middle East, are not sure if they will be able to go back to their work abroad. Visas and job contracts expired for many. Getting a job at home is not easy as millions are still out of jobs and two million new faces have already entered the hunt for jobs in the year of the pandemic.

Are these new entrants welcomed into the job market? Are the previously employed ones getting back their jobs?

A report from Gazipur, an industrial hub near the capital Dhaka, shows jobs are returning but with lower wages than before. Workers have no choice but to accept whatever wages they are offered.

Jobs were under threat even before the pandemic. Factories are being automated, requiring less humans. There is a gap between what industries need and what schools produce. Calls are growing louder for educational institutions to develop innovations and new skills – which are must for future jobs.

This pandemic will be over someday and economy will be back to vibrancy. But jobs will continue to be at risk if new skills are not created to catch up with fast-moving knowledge-based industry, requiring more intellect than muscle.

Be there a pandemic or not, some jobs will slide into oblivion, some new jobs will emerge. Jobseekers need to keep their eyes and ears open to reinvent themselves and re-engage. They need to prepare them for future job needs to avert the risk of falling behind. Schools and universities have to change their curricula and ways of teaching to create new skills for future industries. Employers need to partner with the government to create institutions for developing future skills. Because the need for humans will never go. Owners will still need men and women behind machines.

The writer is deputy editor at The Business Standard