MIT makes the link between automation and inequality, the US recovery may be quicker than we thought, Google wants its workers back in the office, the International Labour Organization warns not everyone can benefit from remote work and the EU Commission proposes a recovery package worth €750 billion. These are the topics dominating the world of work this week.

#1. Each new robot in manufacturing replaces 3.3 jobs

 

The Massachusetts Institute of Technology (MIT) has published new research titled Unpacking Skill Bias: Automation and New Tasks. Based on a series of studies, it argues that modern technology has affected different workers in different ways. While automation, AI, or robots have benefited many white-collar workers such as designers and engineers, many blue-collar workers have been impacted negatively and their jobs have been replaced. This was not always the case, however. Before the 1980s a lot of the new job opportunities that technology brought benefited low-skill workers but as Professor Daron Acemoglu argues “from the 1980s, and especially in the 1990s and 2000s, there’s a double whammy for low-skill workers: They’re hurt by displacement, and the new tasks that are coming, are coming slower and benefiting high-skill workers”. The research concludes that:

 

  • Across the U.S. from 1993 to 2007, each new robot replaced 3.3 jobs;
  • Manufacturing companies that are quick to automate can thrive but the overall employment drops;
  • Where automation occurs, lower-skill workers are not just failing to make gains; they are actively pushed backward financially.

Photo by DEVN on Unsplash

#2. JPMorgan CEO says US unemployment could drop to 10% by the end of the year

 

Speaking at a virtual conference hosted by Deutsche Bank, JPMorgan CEO Jamie Dimon said he believed the unemployment level in the US would remain in double digits but that by the end of the year it would fall to 10%. According to Dimon, there are signs that the economy is beginning to recover and that the rebound would be rather fast. He cited both the US government’s stimulus package and the strength of the American consumer as primary reasons why he feels upbeat about the country’s economic prospects for the second half of the year.

James Dimon at the World Economic Forum, Photo by WEF

#3. Google outlines plan to get some employees back to the office

 

While Facebook and Twitter have recently made bold statements on how they plan to go about facilitating most of their employees to work remotely on a more permanent basis, Google has decided to buck the trend and approach the issue from another perspective. Its main focus is on how to gradually return people to the office while still offer some level of flexibility. Sundar Pichai, the tech giant’s CEO has outlined the company’s plans to start the process of returning to some level of normalcy come July and gradually return about a third of their employees by September. Google has previously become known for its iconic office complexes which had long served as a symbol of what makes work in the tech sector distinct from more traditional jobs.

Photo by Paweł Czerwiński on Unsplash

#4. As remote work becomes more prevalent, ILO warns not everyone can take advantage of it

 

According to the International Labour Organization, COVID-19 has accelerated the future of work while nudged remote work towards becoming the new norm. That said, Susan Hayter, the ILO’s Senior Technical Adviser is cautious about claims that coronavirus will lead to an end of “The Office”. In high-income countries, only 27% of workers are able to work remotely while the office will continue to play a social role in people’s working lives regardless of the newly found flexibility. However, when it comes to the developing countries, the focus is on securing a decent income rather than remote work as 1.6 billion people working in the so-called informal economy saw their earnings drop by an average of 60% in the first month of the crisis. To that end, and in the face of a dramatic economic downturn as well as surging unemployment figures, Hayter calls on companies to embrace new job-sharing schemes that would allow for both flexibility and saving jobs. This might lead to shorter workweek or work-sharing arrangements to avoid furloughs in lean times, but it would bring more stability and security.

Photo by Remy Ludo Gieling on Unsplash

#5. The EU Commission proposes recovery package of €750 billion

 

The European Commission proposed this week a €750 billion package of grants and loans to aid the EU’s recovery from COVID-19. The Commission’s president Ursula von der Leyen told the European Parliament that none of the challenges posed by the pandemic can be fixed by any single country alone and claimed that the programme could “kick-start our economy and ensure Europe bounces forward”. The €750bn recovery fund will be complemented by the €1.1 trillion EU budget for 2021-27 and the initial rescue package of €540bn which would bring the total amount to €2.4 trillion, said the Commission president.

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