COVID-19 is accelerating automation, especially in jobs held by ‘minority’ workers, Philly Fed says

• COVID-19 has accelerated the adoption of automation in three primary ways, according to a Sept. 14 analysis from the Federal Reserve Bank of Philadelphia, with minority workers impacted particularly hard, “increasing the risk of permanent job loss for these workers who are already vulnerable in the job market.”
• The first driver of this “forced automation,” according to the report, was the loss of “automatable” jobs, many in the service sector which cannot be done remotely. Second, companies with increased demand had incentive to automate when faced with labor shortages and worker health concerns. And third, for companies that already made layoffs, it was easier to replace those workers with technology.
• By August, automatable jobs held by minority workers — defined by the report as “nonwhite” — experienced 5.1 more job losses per 100 jobs than those held by non-Hispanic White workers, according to the analysis. Overall, 2.6 million pre-pandemic jobs “were exposed to an elevated risk of being permanently automated,” the Philadelphia Fed said.

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Automation is a polarizing concept with respect to the future of work. For employers, AI and machine learning solutions offer an efficient answer to business needs, but one that can be expensive and is often not welcomed warmly by the rank and file. From the workers’ point of view, it can bring fear of job loss and skills obsoletion.
Many also believe in a happy medium, where technology makes employees’ lives easier and firms are more productive as a result, without having to eliminate jobs. A study from The Everest Group conducted before the pandemic concluded that employers could achieve significant ROI from automation expenditures and suggested that the idea that it reduces jobs is “highly exaggerated.”
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Adoption was already on the rise before the pandemic, but the conditions of the public health crisis have accelerated adoption, as this Fed study and others have concluded. Business leaders have adopted technology during the pandemic that they previously rejected or ignored, 58% of respondents in a recent Cisco survey indicated.
Additionally, Gartner has predicted three-quarters of enterprises will “operationalize” AI by 2024.
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