The Challenges of the Post-Coronavirus Workforce
By Steven Hill, Hans Böckler Stiftung, July 6, 2020
With millions of workers affected, the short-term shocks of the coronavirus pandemic have been unprecedented. But what will be the longer term impacts of new ways of working remotely or at-home? Will a more “distributed” workforce be a less unionized and less empowered workforce?
The United States, like many other nations, has been undergoing an enormous social experiment since mid-March. That’s when various US states and cities ordered critical isolation measures and shut down entire economic sectors to combat the coronavirus pandemic. With millions of US workers laid off or sidelined, the impact has been devastating on the workforce. The US unemployment rate reached nearly 15%, the highest since the Great Depression, with 41 million Americans filing to receive unemployment benefits. The labor force participation rate decreased by 2.5 percentage points in April alone to 60.2 percent, the lowest rate since January 1973.
But looking further into the future, one can’t help but be concerned over what the longer term impacts of this “coronavirus depression” might be. Tens of millions of people have been working from home, participating in innumerable Zoom meetings, juggling homeschooling, and generally trying to maintain a sense of stability despite enormous levels of uncertainty. About 62% of employed people have been “home-workers” during the pandemic, and many businesses have discovered that they can continue to function as a “remote workplace.” Various polls have shown that many people are enjoying this change, at least in the early going. Many changes might prove to be temporary, lasting only until there is a vaccination breakthrough (though who knows when that might occur, and if it will actually end the pandemic). Other changes may end up as permanent features of the “new normal.”
What might the future of work look like, as a result of this enormous, exogenous disruption of our workplaces, our lives and our national economies? Below are some evolving scenarios that could potentially redefine the contours of how people work. Many of these changes in labor markets are alarming, while others hold positive potential if the right mixture of rules and regulations are enacted as guardrails.
More “distributed workers”?
Over the past 10 years, companies like Uber, Airbnb, Upwork and Germany’s Foodora and Clickworker pioneered the hiring of freelance contractors, temps and solo self-employed workers who access work through an app or a website. These “distributed companies” employ relatively small numbers of regular staff, who use digital technologies to oversee large numbers of “distributed workers” – freelancers and solo-self-employed that do not report to any particular workplace but instead work remotely as individual operators. Such workers usually lack the job security, social welfare benefits, labor rights and union protections of regularly employed workers.
It’s harder to maintain the types of close relationships with fellow workers that facilitate solidarity
Distributed companies at times resemble stateless corporations in which labor laws are mostly ignored. Now, as a result of the pandemic, millions more regular workers suddenly find themselves working remotely in a “distributed” mode. Many still enjoy job security and labor protections, but distributed workforces are much more difficult to organize collectively. It’s harder to maintain the types of close relationships with fellow workers that facilitate solidarity. Also, as relationships become more virtual, employers will undoubtedly be tempted to hire more workers as freelancers and independent contractors, or to engage in toxic practices such as “bogus self-employment,” in which regularly employed workers are illegally treated as freelancers. This trend will be further incentivized by the potential for significant labor cost reductions – according to consulting firm Global Workplace Analytics, employers that allow employees to work remotely from home, even part-time, save about $11,000 per year per employee. In addition, since distributed employers traditionally do not pay their share of health care and other welfare costs for freelancers/contractors, they can shave another 25% or more from their labor costs by turning their distributed workforce into a freelancer workforce.
In some occupations and industries, this “labor deleveraging” could happen fairly quickly. In others, it will be phased in through a step by step process: first, people start working remotely due to the pandemic, then they are kept on remote status indefinitely; over time, more freelance and gig workers get added to the mix, and finally regular employees are phased out and replaced by the freelancers. Indeed, some of those former employees will get hired back as platform-based freelancers. A quiet revolution, induced by a global pandemic.
If this trend towards distributed workforces scales – which seems likely in the post-Covid era – that will result in further loss of labor influence and bargaining power for entire sectors and occupations.
Employer surveillance of at-home workers?
If more people continue to work from home, whether as freelancers or regular employees, businesses will want to build in some assurances that labor productivity will not suffer. That means using an array of digital surveillance technologies to increase monitoring of workers, even those working out of their own homes. Online labor platforms like Upwork and others have been pioneering surveillance technology to crack down on so-called “cyber slacking,” by offering business clients a suite of software tools called “Private Workplace.” These technologies provide minute by minute logs of workers’ computer keystrokes, track mouse movements, and even secretly snap periodic screenshots – looking over their workers’ virtual shoulder, so to speak – so the business can ensure that workers are engaged. Productivity would be constantly measured and tracked, and supervisors will even know how often you are away from your computer. There will be no rest breaks for this new form of surveilled labor. Is this panopticon of the new digital workplace, i.e. your home, really the future we want to see? Certainly there are enormous privacy concerns in this scenario, but companies will argue that responsible monitoring is necessary in order to ensure productivity.
And for those reduced number of times when you will be required to attend in-person meetings? The new reality may well include mandatory medical screenings, such as temperature checks, antibody tests and other health privacy invasions. Already in the US, a number of large employers, including Amazon, Walmart, Home Depot and Starbucks, are taking the temperatures of their employees before they are allowed to work. Worker health is important, especially in response to a pandemic, but who will determine the level of allowed intrusion? Employers may try to instigate peer pressure among coworkers and the public at-large to enforce the new health paradigm, increasing the demands for invasive privacy breaches.
Work split into smaller, segmented tasks – leading to more automation and robots?
The challenges of managing a post-Covid distributed workforce will incentivize many employers to reconfigure work itself, requiring that workers have a flexible skill set that can be applied to shifting workstreams. That means deconstructing jobs into component tasks, which will make it easier to fashion a new division of labor based on which tasks can be performed by remote workers, and by substitutes for sick, incapacitated workers. Writing in Harvard Business Review, three management consultants recommended that business managers, “bundle adjacent tasks that allow for remote work into new jobs, and port the tasks that require on-site work into other, fewer jobs – thereby limiting the amount of work that must be performed in the office or on-site.”
Task segmentation renders such work ever more susceptible to being performed by algorithms, robots and automation.
This already has been happening at the corporate level. For example, Cisco and Allianz Global Investors have set up internal project strategies that broke down work into tasks and projects that can be matched with people from anywhere in the organization with relevant skills and availability. But under the pressures of COVID reorganization, these trends will likely accelerate. One hiring manager faced with a coronavirus hiring freeze decided to split a new hire position into five part-time tasks that can be completed by existing employees. Business consultants and managers wax enthusiastically about how such reorganization will be good for employers while also providing workers “new opportunities to learn and grow.”
Maybe so, but on the other hand, this kind of “task segmentation” renders such work ever more susceptible to being performed by algorithms, robots and automation. Researchers have found that automation is more quickly adopted during economic downturns, and in the middle of this crisis, the bots are making advances. For example, many utility companies have expanded their use of automation software to allow workers to operate, monitor, and control power grid systems remotely, enabling utilities to run smoothly despite using a more distributed workforce.
Work-life balance becomes … more unbalanced?
Early in the COVID crisis, a Gallup poll found that 60% of Americans who had started working from home as a result of the pandemic preferred to keep working that way after the crisis. That’s understandable: when you work at home (as I have done for many years) the commute is short, the fridge is handy and your supervisor’s eagle eye is somewhat less intrusive. But it remains to be seen if that preference will continue, especially once the novelty has worn off and employers begin using digital surveillance to cut down on presumed cyber slacking.
It has taken decades to enact health and safety codes that protect workers and the work environment. Now remote employees are working from their kitchen table in a lousy chair…
But even more life-changing, when you work from home then your work life and personal life become even more integrated and overlapped. You won’t be able to think of them as separate anymore. Your work will never leave your home, and inevitably home-based workers will feel pressure to respond to emails, texts and phone calls during all hours of the day, even when “off-duty.” Smart phones in bed will become depressingly normal. This could have enormous consequences for not only a worker’s happiness, but also for their family members (who may be doing the exact same thing).
And what about workplace safety and ergonomics? It has taken decades to enact health and safety codes that protect workers and the work environment. Now remote employees are working from their kitchen table in a lousy chair, or on their couch with their laptop on their knees, staring at their computers for hours on end. With workers distributed across millions of homes, it will be extremely difficult to enforce existing laws. Some businesses will undoubtedly assist their employees in designing the correct home set up, and some better-paid freelancers will pay for their own. But millions of other workers will be left to fend for themselves.
New centrality for online education and training?
Distributed workers also will feel additional pressures to constantly upgrade their skills. For a number of occupations, online training will play an increasingly central role. Nearly a decade ago, high profile university experiments and online education, known as MOOCs (massive open online courses), were launched. Companies like Coursera, Udacity and edX were hyped as Silicon Valley disruptors of the antiquated ways of traditional education. But online learning proved to be a poor fit for many cyber students, many of whom never completed their courses.
Will occupational training be considered as “personal investment” for which the individual worker is solely responsible?
Now the COVID crisis, combined with learned lessons from the MOOCs’ struggles, have breathed new life into online education. The education companies have tilted towards skills-focused courses that match student demand and hiring trends. Udacity has developed dozens of courses with corporate collaborators, including Google, Amazon and Mercedes, offering digital vocational skills like programming, data science and artificial intelligence, fields where companies say they need workers. As workforces become more distributed, employers will likely offload most of the upskilling/reskilling responsibility to the distributed workers themselves. Is any nation investing in the training facilities to handle this change? Or will the crucial task of occupational training be considered as “personal investment” for which the individual worker is solely responsible?
More opportunity – for certain occupations, as well as ignored regions?
As post-COVID workforces become more distributed, we will likely see more hiring outside the big cities. Smaller cities and towns that have a decent university with a STEM program (Science, Technology, Engineering, and Math) will produce pools of young tech workers that can be accessed by companies hiring remotely. These young people will no longer need to move to big cities or to wherever the work is, they will be able to access work from virtually anywhere. A worker in Alabama or Utah will not need to move to San Francisco or New York, or a worker in Greece or Croatia move to Berlin or London. This has positive potential to redistribute opportunity, to some degree. Companies could open regional hubs or provide access to co-working spaces wherever their workers are concentrated, instead of having most of their workforce migrating daily into a central office.
With the incorporation of rules requiring adherence to higher standards, online labor platforms could produce increased job opportunities and labor productivity.
If online labor platforms like Upwork, Task Rabbit and others are properly regulated so that they obey high standards of labor laws, pay their employer taxes, and provide portable safety net benefits and access to job training/reskilling for distributed workers, there could be some genuine upside potential. Instead, the status quo is that these online platforms produce a race to the bottom among workers of all nations who compete against each other. So predictably, workers from the developing world regularly undercut wages for workers from the developed world, like in the US and the EU. It’s a classic case of triaging labor costs, with the benefits accruing mostly to the side doing the hiring. But with the incorporation of rules requiring adherence to higher standards, online labor platforms could produce increased job opportunities and labor productivity.
Undermining of the tax base for the public sector?
In the aftermath of the pandemic, as more workers come to be employed by online platforms, government officials will need to have access to accurate and timely employment data that allows them to track these distributed workers so that income taxes and social security contributions can be collected from both workers and those businesses that hire them. Otherwise, the tax base for funding the social welfare system, as well as education, health care, housing and national security, will be slowly eroded.
OTHER POTENTIAL CHANGES OF NOTE
Additional changes will be in the post-crisis air, which will affect important sectors of the economy and, by extension, workers and jobs. These include:
Disruption of real estate markets
As more employees work from home, there is less overall need to own or rent office space, which could lead to massive disruption of the commercial real estate market. Already shopping malls and the big-box department stores that anchor them, like Sears, J.C. Penney and Macy’s, have been on the chopping block, with an estimated 25 percent of the nation’s nearly 1,200 malls in danger of closure. The commercial market in the US is worth approximately $16 trillion, which is about four times the size of the entire US government’s federal budget. With more distributed workforces, companies might resort to a strategy of using regional hubs rather than one central office. What will Apple, Facebook and Google do with their enormous campuses in Silicon Valley? Will universities need as much real estate, if more education moves online? What will we do with the remnants of enormous shopping malls that find themselves honeycombed with vacant shops and businesses? A collapse of the commercial real estate market would result in deep impacts to the broader economy, which in turn would negatively impact jobs. However, on the positive side, it might result in cheaper office space for new startups and former employees-turned-entrepreneurs.
What does this mean for the future of work, when the only progress that humanity has realized against this existential climate threat is when work itself was substantially shut down?
Decreased commuting and traffic congestion
Climate scientists reported in May that global carbon emissions have plunged an unprecedented 17 percent during the pandemic. With more and more people working at home – or not working at all – suddenly the climate dilemma that has perplexed modern societies has been temporarily solved. In addition, the decline in traffic congestion in major cities has turned the usual Uber-choked gridlock into something decidedly more pleasant. And with greater telecommuting and videoconferencing, it’s likely that we will see less frequent business travel in the short-and medium-terms, which could dramatically affect the airline and hospitality industries. But scientists say the drivers of global warming will quickly bounce back as social distancing fades and economies rebound. What does this mean for the future of work, when the only progress that humanity has realized against this existential climate threat is when work itself was substantially shut down? We can no longer say, “We don’t know how to do this.” Instead, we may be faced with answering the daunting question: “How much economic retrenchment are we willing to endure to reduce carbon emissions?”
These are a few of the potential major transformations that are hovering on the horizon like whirling tornadoes, though the ultimate extent of the impacts is difficult to forecast. Also, in thinking through policy responses, it must be frontally recognized that millions of workers at the lower end of the labor market, including a disproportionate percentage of women in precarious jobs and the informal economy, will bear the brunt of many of these impacts. It is the height of irony that, during the COVID crisis, suddenly whole nations have been dependent on the very service and delivery workers who many would deny a living wage to, especially low-income women and people of color. The crisis has exposed how decades of austerity policies have left government’s and public services struggling to respond properly. Significant reinvestment in the public sector is way overdue.
In these uncertain times, the only sure thing is that changes to the future of work are coming. The smart societies will prepare for it by ensuring that distributed workers will be able to benefit from job reskilling, labor and safety protections, portable safety nets, union representation and collective bargaining, strong codetermination rights, affordable access to high-speed internet (a must for the “virtual office”), and other supports. Reasonable standards for wages, social security, health care, and worker monitoring must be established to ensure fairness and a broadly shared prosperity.
German language version: