Will The Economy Replace Ten Million Jobs By 2022?

Employment will bounce back to pre-pandemic levels by December 31st, 2021.” – Bank of America

Popular forecasts call for a return to pre-pandemic levels of employment and economic activity by yearend. Really? We are not so sure.  The economy lost over 22M jobs between February 2020 and today. The recovery has gained 12M jobs leaving a deficit of 10.7M jobs to replace. This post evaluates trends in employment, hiring, and worker job concerns to determine if this robust forecast to gain 10.7M jobs in 11 months is likely. We begin with a review of automation and job growth at the corporate level from an executive perspective. Next is a look at the worker perspective, a review of automation in various industries, an examination of small business hiring, and an outline of entrepreneur activity. Finally, we offer an outlook for total employment and ideas for sustainable job growth.

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Executives Focus On Cutting Costs and Staff

As the pandemic rages on, executives are laser-focused on increasing productivity, reducing costs, and implementing programs to reduce staff. The pandemic accelerates the trend toward automation and staff reductions.  Executive searches for artificial intelligence, automation software, and new business process robotics grew by 5 – 15 % in 2020Workers in the office or plant require social distancing, desks spaced 6 feet apart, plastic separator sheeting, continuous surface disinfecting,  and periodic temperature testing.  Implementing these pandemic office changes is expensive.

As one COO at a global manufacturer declared, “bringing workers back during the pandemic is expensive, we have to cut costs, I can get 10x – 20x return on automation investments instead.” An October 2020 World Economic Forum survey global executives and found that 43% planned staff reductions.  Executives are busy hiring new leaders for automation deployments. Gartner Group reports that S & P 100 companies will employ 20% more automation architects in 2021 than last year, and 90 % of companies will be hiring  automation experts by 2025.

Automation Goes Beyond Repetitive Task Replacement to ‘Digital Assistants’

Manufacturing companies have deployed automation systems for the past 20 years achieving lower cost and productivity improvements.  Automation reduced the need for hiring workers as well. A Federal Reserve survey showed that U.S. manufacturers had increased output by 20% in 2018 with the same number of workers employed in 2000.

Now automation of knowledge worker jobs is beginning to take hold in financial and services-based businesses.  In the past year, corporations are investing heavily in Robotic Process Automation (RPA) software that supports ‘machine learning,’ artificial intelligence, and business process automation.  New RPA software packages enable non-programming workers to build programs that create ‘digital assistants’ for their job. Enabling workers close to the business process to be automated reduces time to implement and takes the programming load off central IT departments. To counter the need for hiring more software and information services professionals, companies install RPA software. Thus, even ‘secure’ information services jobs may be at risk due to smart software.A CNBC survey found 37% of workers, 18- 24 years old, were worried about their job replacement by artificial intelligence systems in the next five years. A national average of 27% of all workers was concerned about losing their jobs due to artificial intelligence.

 

job, Will The Economy Replace Ten Million Jobs By 2022?

Source: CNBC – 11/7/19

Most early-career workers are internet fluent and know software systems’ capabilities to replace their jobs, says Dan Schwabel, Director of Research for Future Workplace. As they use systems like Siri and Alexa and begin programming, they realize that a smart software service could do their job in the not too distant future.

Workers Across Many Sectors Are Concerned About Automation Job Elimination

The following chart shows 45% of Advertising and Marketing workers to 33% of staff in Insurance are concerned with robots and AI eliminating their jobs.

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