I-Team: Report: Automation likely to impact pandemic job recovery

An economic report issued at the height of the pandemic, and reviewed by the News Center 7 I-Team, concluded COVID-19 has reinforced the automation trend and effects of machines replacing people’s jobs.

LINK TO REPORT: COVID-19 and the macroeconomic effects of automation | VOX, CEPR Policy Portal (voxeu.org)

“While automation is likely to foster overall economic prosperity, it comes at the price of increasing inequality,” the report, ‘COVID-19 and the Macroeconomic Effects of Automation,’ concluded.

“The main challenge here is to ensure that as many as possible will benefit from the positive economic and social effects of automation to prevent a situation in which a substantial part of society is disconnected from the gains brought by technological progress,” economics professors David Gamble and Klaud Prettner wrote.

Gamble and Prettner are experts, respectively, at Harvard University and the Vienna University of Economics and Business.

Former Miami Valley travel agent Cecily Parker felt the ‘increasing inequity’ Gamble and Prettner wrote about when internet travel websites cost the former travel agent her job.

“I’m like well, starting over,” Parker said. “When everybody went to online booking. When any secretary or business could go through Expedia or Priceline or something like that. They were done. They didn’t need people anymore.”

Around the time Parker lost her job, a Ball State University study concluded what many in the Miami Valley were experiencing: between 2000 and 2010 automation cost 88% of American factory workers costs their jobs.

Six years later, a 2016 federal report, the I-Team examined, concluded automation’s Great Recession impact meant the less income an employee made, the more likely they were to have a machine replace their job. (Artificial-Intelligence-Automation-Economy.PDF (archives.gov)

83% of jobs making less than $20 per hour had come under automation pressure, as compared to only 31% of jobs making between $20 and $40 per hour and 4 percent of jobs making above $40 per hour, the author’s found.

“Study estimates that less-educated workers are more likely to be replaced by automation than highly-educated ones,” the author’s estimated. “44 percent of American workers with less than a high school degree hold jobs made up of highly-automatable tasks while 1 percent of people with a bachelor’s degree or higher hold such a job.”

According to researchers at the time, jobs like farmers, food service, retail, teachers, even doctors and lawyers, were not immune.

Now, one decade later, the idea of machine’s replacing people’s jobs was again center stage at Ohio’s Democratic presidential debate.

“Their Main Street stores are closing. They see a self-serve kiosk in every McDonalds, every grocery store, every CVS. Driving a truck is the most common job in 29 states, including this one (Ohio); 3.5 million truck drivers in this country. And my friends in California are piloting self-driving trucks,” former candidate Andrew Yang said.

Ohio’s trucking industry employees about 71,000 people, including 240 of them at Xenia’s Home Run Inc. However, Safety Director Tom Milby does not think self-driving trucks will decimate his industry’s jobs.

“You still need a truck driver to drop the trailer, take the dolly legs down. You still need someone to drive that truck and operate the stuff outside the truck,” Milby said.

But Gamble and Prettner argue automation during COVID-19 allowed employers to keep production going and enabled work from home offices. That trend, they feel, is likely to continue and increase at the expense of lower paid workers.

“In general, because better-educated workers with higher incomes can take advantage of these opportunities and many less-educated, lower-income workers cannot, automation and related technologies have translated the COVID-19 shock into greater social and economic inequality, even as they reduce the pandemic’s overall economic impact,” Gamble and Prettner wrote.

“The disproportionate impact of COVID-19 on disadvantaged ethnic minorities and lower-income individuals—who have poor access to health care and often face higher infection risk due to reliance on public transportation and lack of opportunities to socially distance in the workplace—further magnifies this trend,” the expert’s report said.

However, Jamestown’s Just Ink Tees owner Jason Baker said the global pandemic’s overall economic downturn, not the automation he already used, caused him to eliminate jobs.

“Before COVID we were up about 45 employees. We’re down to about 14 now,” Baker said.

Baker’s facility prints T-Shirts, performs embroidering, engraving and trophy building. While it’s still cheaper for Baker to hire workers to clean screens, most other jobs inside the facility are automated.

“It (automation) actually caused me to hire more people because we were putting out so much work that we needed more people,” Baker said.

The automation evolution is something the pandemic is forcing so many to come to terms with.

It’s a lesson Cecily Parker once had to embrace. Eventually, she used her travel agent skill set to land a local school district job.

“Evolve. You either evolve with it or you’re not moving forward and you’re not moving,” said Parker.