COVID19 and the Economics of Future Work: Exposing More Workers Too Soon May Permanently Damage the Global Workforce

SOURCE ITEMS

They think that the virus may bind to receptors on endothelial cells, which are found on the inside of blood vessels, like veins and arteries. It’s possible that the virus’s presence there triggers an immune reaction to the foreign substance which results in clotting, Morro says—and it’s those clots which, if they travel to the brain, can cause stroke.

Kat Eschner, COVID-19 is causing strokes in young people and doctors don’t know why, Popular Science, April 28, 2020.

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But experts are warning of possible long-term effects for patients after they’ve survived the coronavirus. Doctors know now that the disease attacks many systems within the body — from the lungs and heart to the liver and kidneys, says Yale cardiologist Dr. Harlan Krumholz.

Robin Young and Samantha Raphelson, As Patients Recover From Coronavirus, Doctors Wonder About Long-Term Health Impacts, Here and Now, April 28, 2020

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Overall, 1419 of 1555 patients survived for >90 days, with a mean follow-up period of 5.9 years. There was significantly higher long-term mortality among patients with pneumonia than among age-matched controls.

Eric M. Mortensen, Wishwa N. Kapoor, Chung-Chou H. Chang, and Michael J. Fine, Assessment of Mortality after Long-Term Follow-Up of Patients with Community-Acquired Pneumonia, Clinical Infectious Diseases, Volume 37, Issue 12, December 15, 2003.

COMMENTS

We are all trying to figure out what policy makers should decide about revving up the world economy.  From what I am reading, even the medical experts are not sure what can be resumed safely and what can’t.  As we reopen businesses, the people we are putting at greatest risk are the very people we rely on most to make the world economy hum with success.

One thing we are learning is that young and healthy workers may not be as safe from covid19 as we and they think.  Research is suggesting that while young people may face a much lower death rate, they may be facing long-term bad outcomes from covid19, including strokes leading to long term disability and greater susceptibility to debilitation and death from other disease traumas.  Long after the covid19 infection is a distant memory, working people and the world economy may still be paying the price of increasing worker exposure to covid19 too soon.

The long run costs in health and wealth from revving the economy too quickly may considerably outweigh the short run gains. For workers who survive covid19 infection, the possible lifelong health conditions will be physically painful and emotionally traumatic.  For their families, the expenses and the lost income because of lost work time will undermine economic well being.

The long run costs to the world economy will also be high.   A world economy with a large number of health compromised workers is a world economy with rising expenses (on top of the rising expenses of caring for a growing global population of older people, many with chronic illnesses)and declining productivity.   Caring for chronically health compromised workers diverts public wealth (both taxes and contributions to charities) away from funding critical investments and funding public goods that enhance the quality of life.  Workers with compromised health are off work more often and are less productive when on the job.

In a nation like the U.S., with an aging population and dependence on the output of workers in other parts of the world, the consequences will not be good.  Not only our own workforce will be health compromised, but also the global workforce that we have come to rely on.  The productivity of workers in the poorer nations that produce so much of what we consume will have very high rates of covid19 infections now and much lower productivity going forward.  Moreover, replenishing the U.S. workforce with healthy young workers from other parts of the world as our workers age out of the workforce will be more difficult and costly.  In such future circumstances the likely economic trajectory for the U.S. is a downward spiral – less wealth to pay for health; less health to create wealth.

Hard Working? Creative? Strong Language and Computer Skills? Earn Up to $4 Per Hour in the New Global Labor Force

ITEMS FOR YOUR CONSIDERATION

The job didn’t pay much: four bucks an hour if you really hustled. But for Catherine Fraser, a recent community college graduate from Mountain View looking to pick up a little extra spending cash, the work was a hoot.

… said analyst Martin Schneider with 451 Research. “Like manufacturing has done forever, crowd-labor lets us break down a job into tiny components, where one bit of fact-checking or writing a few sentences is now the equivalent of gluing that chip onto a computer board.”

… The larger question — and one with huge global implications as crowd-sourcing redefines and in some cases kills traditional jobs and long-established labor-management models — is whether the crowd-labor pool could essentially become one big worldwide digital sweatshop. While industry studies show average hourly earnings across all categories range from about $7 in India to $16 in Western Europe, the fast-growing segment of micro-taskers earn half that on average, and some make only $1.50 an hour.

Patrick May, ‘Crowd labor’ helps spur social networking revolution, San Jose Mercury News, Updated: 05/01/2012.

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Series Index May

Series Index Apr

Rate of Change

Employment Index

50.8

54.2

Slower

Business Activity/Production

55.6

54.6

Faster

New Orders

55.5

53.5

Faster
Source: May 2012 Non-Manufacturing ISM Report On Business, Institute for Supply Management, June 5, 2012

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For Great Wall, a private sector Chinese car maker that employs 50,000 workers, the Swiss robots and other machinery that line its bright factory floor produce more than cost savings. The company hopes they will help it build cars good enough to compete with the global auto makers.

According to Nomura, 28 percent of factory machines in China use numerical controls – one measure of automation. That may be far lower than Japan’s 83 percent, but China is growing far faster than Japan did at a comparable stage of development, says Ge Wenjie, a machinery analyst with Nomura.

In other words, China may soon be known less for cheap Christmas toys and more for high-end medical equipment, luxury cars and jet engines.

By Don Durfee, Analysis: Robots lift China’s factories to new heights, Reuters, June 3, 2012.

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Unit labor costs fell in 23 of 47 service-providing industries, the most since 2003 …

Output per hour increased in 32 of the 47 [service-providing industries] industries studied.  In most of these industries, productivity rose as output growth was accompanied by declines or more modest increases in hours.  Several  industries posted double-digit productivity gains as a result: local as well as long-distance general freight trucking; refrigerated warehousing and storage; radio and television broadcasting; wireless telecommunications carriers; and travel agencies.

In a few industries, productivity rose despite falling output.  In industries such as postal service; couriers and messengers; video tape and disc rental; photofinishing; and newspaper, book, and directory publishers, rising labor productivity reflected declines in both labor hours and output, with hours falling more rapidly than output.

Productivity and Costs by Industry: Selected Service-Providing and Mining Industries, 2010, Economic News Release, U.S. Bureau of Labor Statistics, May 31, 2012.

COMMENTS

During the 20th century each new generation of U.S. workers faced declining employment opportunities in agriculture, mining, and manufacturing.  But those lost employment opportunities were offset by growing employment opportunities in government and private service sector industries.

This is no longer the case.  Job growth in government and service sector industries has slowed considerably.  Moreover, some government agencies and service sector industries are embracing new production technologies and becoming job shedders themselves.

The hallmark of the first half of the 21st century may well be a decades long global employment crisis.  National governments are still trying to apply economic remedies carried over from the 20th century in a world that is vastly different.  National economic sovereignty is gone.  Rich and poor nations alike are now joined at the economic hip in a single world economy.

Sticking with the “each nation goes it alone” strategy for addressing the global employment crisis isn’t working.  Rather than getting increasing prosperity, U.S. working families and local business owners are getting a larger share of the world’s very high level of poverty.

The practical alternative for the U.S. is to join with the world’s other nations to build institutions that coordinate national economic policies and set minimum global standards for corporate behavior, working conditions, wages and benefits.

Globalization cannot be undone, so there is no other choice.

More on Computers With Master’s Degrees and Accelerating Job Losses

“Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.

Agriculture is increasingly powered by software as well, including satellite analysis of soils linked to per-acre seed selection software algorithms

Health care and education, in my view, are next up for fundamental software-based transformation

many people in the U.S. and around the world lack the education and skills … This problem is even worse than it looks because many workers in existing industries will be stranded on the wrong side of software-based disruption and may never be able to work in their fields again. ”

Marc Andreessen (Hewlett-Packard board member), Why Software Is Eating The World, Wall Street Journal, August 20, 2011

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“Robots have the potential to replace humans in a variety of applications with far-reaching implications. … The development and implementation of robots for elder-care applications, and the development of human-augmentation technologies, mean that robots could be working alongside humans in looking after and rehabilitating people. A change in domestic and social responsibilities and a change in domestic employment

SRI Consulting Business Intelligence requirements could adversely affect lower income service-oriented workers.

By 2025 Internet nodes may reside in everyday things—food packages, furniture, paper documents, and more. … Streamlining—or revolutionizing—supply chains and logistics could slash costs, increase efficiencies, and reduce dependence on human labor.”

Disruptive Civil Technologies: Six Technologies with Potential Impacts on US Interests out to 2025,  Conference Report, National Intelligence Council, April 2008

———————–Comments———————–

See comments in the Reconnaissance Report for August 19, 2011 (immediately below).

Global Investments in Agriculture Technologies and Growing Demand for Paid Work

Today, a single person driving a huge $400,000 combine, burning 200 gallons of fuel daily, guided by computers and GPS satellite navigation, can cover 20 acres an hour, and harvest 8,000 to 10,000 bushels of wheat in a single day.”

 Christian Parenti, Reading the World In a Loaf of Bread: Soaring Food Prices, Wild Weather, Upheaval, and a Planetful of Trouble.

“MOLINE, Illinois (May 18, 2011)  – Deere & Company said today it will build a new manufacturing facility in northeast China to support the increased demand for large agricultural products in the region. The factory will build mid- and large-sized tractors, sprayers, planters and harvesting equipment. Deere said its initial outlay for the project is approximately $80 million.”

John Deere Press Release, May 18, 2011.

“All business is local. To understand and respond to our many customers’ needs and requirements worldwide, we must live where they live. Work where they work. That’s why John Deere reaches out across the world with factories, offices and other facilities in more than 30 countries…”

John Deere web page, Worldwide Locations http://www.deere.com/wps/dcom/en_US/corporate/our_company/about_us/worldwide_locations/worldwidelocations.page?%09%09%20%09

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Displacement of families from agricultural lands by agricultural businesses with machines has long been a key driver of the demand for jobs in cities and suburbs, and continues to be in some areas of the world.  Agricultural workers, often non-paid family workers, whose work is taken over by machines migrate to cities and seek jobs in the manufacturing, service, and government sectors.  From growing food and feeding themselves, families on agricultural lands become dependent on jobs for the money to buy food produced by the remaining few workers on factory farms.  Without jobs, they become dependent on public and private handouts.

Despite the world’s need to produce more and more food for a population projected to reach 10 billion by 2100, agriculture will not offer more job opportunities.  Instead, the world’s agricultural regions will send even more millions to cities in search of paid work.