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You Decide: How Will the Job Market Change After the Crisis?

Downtown Raleigh, east of campus.
Downtown Raleigh, east of campus.

By Dr. Mike Walden

There are still many, many questions about the coronavirus. One of the biggest is how life will change after the virus is banished. Among those many changes is the impact on the job market.   As jobs come back after the virus crisis, will they be the same jobs or different?

There is consensus among economists that when jobs do return, the mix of those jobs will not be the same, for two reasons. First, not all businesses will come back. Despite the massive effort of the federal government to financially support firms during the crisis, many firms – both large and small – have already thrown in the towel, and more will follow. These bankruptcies will take millions of jobs with them.

Second, the virus crisis has changed consumer buying preferences and altered the ways in which firms conduct business. The best examples are remote-working and remote-buying, both of which minimize personal contact. If a significant part of these changes survives post-virus, they will mean a big shake-up on the kinds of jobs businesses offer.

Some of the expected job changes haven’t been created by the virus crisis. Instead, the virus has magnified on-going trends and their impacts.

For example, as a result of the tremendous increase in online shopping in recent years, several nationwide retailers who relied on in-person shopping have closed. The virus didn’t create this trend; it simply accelerated it.

However, the virus has added a new dimension to the attraction of online shopping. The original benefit of cyber shopping was saving time. Consumers could shop and buy from the comfort of their home. The virus has created a new plus – avoiding face-to-face contact and the additional effort (waiting to enter a shop, wearing masks) that in-person shopping will likely entail in the future.

The kinds of jobs available in the next several years will crucially depend on two things – the types of changes businesses think they will have to make to be successful in the post-virus world, and the kinds of changes individuals – both as consumers and workers – will want to be made in order to feel safe.

Unfortunately for workers, I think the first upcoming job trend will be an increased movement by businesses away from using people to perform tasks to using more machines and technology.  This is not new; it has actually been occurring for centuries. Many businesses have found automation and technology to be more efficient and cost-effective than humans, especially for routine jobs. Farming and manufacturing are good examples of where this shift has occurred.  Luckily, as technology and machines have replaced people, new jobs for humans in new industries – mainly in the service sector – have been developed.

But with the coronavirus, there’s now a different liability for using humans to perform jobs.  Humans can get sick from a virus and easily spread their illness. Also, even if they stay healthy, workers can be ordered to stay at home and not work in order to contain the spread of a virus.

For example, North Carolina’s meat processing plants, which are labor-intensive and have suffered virus outbreaks, probably will move to more machinery in the future. But even many personal service jobs – in restaurants, office buildings and personal care – could be overtaken by machines, including robots, using artificial intelligence.

A move to more remote-working could be the biggest game changer for jobs. As remote-working has expanded during the virus crisis, surveys show many businesses and workers like it. Even if remote-working doubled from its pre-virus level of 10 percent of the workforce to 20 percent, it would affect numerous industries and jobs. Commuting would drop and so would vehicle purchases. Restaurants would lose lunch customers. Occupancy of office buildings would plunge, meaning cuts in support and maintenance staff.

None of these changes will happen overnight, and some could be slowed or reversed as we move away in time from the virus crisis. Still, looking ahead I see job expansions in three broad areas.   One is servicing households who choose to combine their work life and home life and therefore spend more time at home. Jobs related to package and meal delivery, service delivery in health care and education, and improved internet connections are examples. In fact, high-speed and reliable internet service will perhaps be the top priority for the ‘at-home for everything’ household.

Second are jobs that manage and facilitate the increase in virtual interactions that are expected to result from the reduction in personal face-to-face contact. These jobs span many fields, from technical tasks in developing and maintaining digital linkages and programs to content areas in a variety of subjects, including health, education, entertainment and even travel.

Third, I expect there will be an increase in jobs – indeed, many of these in newly created fields – focusing on preventing, or at least containing, future pandemics. These will include jobs in government, in medicine, and in preventative measures for businesses and homes allowing them to maintain safety from any future virus attacks. We now have experienced both the personal and economic damage a serious virus outbreak can cause. Pandemic prevention and mitigation will be an important new calling.

Even in the best of times, our economy goes through simultaneous job creation and job destruction. The aftermath of the coronavirus will send this job churning to a new level. Will the outcome be a plus or minus? You decide.

Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.