The mass disruption of the workplace because of the pandemic is accelerating employers’ move toward job-displacing automation, and neither the government nor the American labor force is prepared for the sweeping fallout.
The hemorrhaging of jobs is refueling a national debate over how to give workers the skills to survive the brutal market and fill the millions of positions that automation will inevitably also create — albeit at a far slower pace than positions are being shed. Lawmakers, labor unions and the U.S. Chamber of Commerce are all calling for more spending on workforce training. The employment and training programs now available — there are no fewer than 43 spread across the government — are inadequate, uncoordinated and underfunded, they say.
“We’ve fast-forwarded 10 years of change in the space of less than 10 months,” said Andy Van Kleunen, CEO of the National Skills Coalition, a policy research group that promotes workforce training. “We don’t really do a good job making it easy for someone who has lost their job due to no fault of their own, particularly in an industry that’s downsizing, to get into a new occupation in a new industry," he said. "We just need a whole reboot of that.”
For President Joe Biden, this could be one of the most far-reaching economic issues that he will face, and failing to resolve it would undercut his vow to restore the U.S. labor market. Biden, who has strong support from organized labor, is pledging to expand partnerships between unions, businesses and community colleges, scale up work-based learning programs and build out individual career services.
Yet despite the bipartisan calls for action, it may be a struggle for Biden to convince Republicans to agree to fund a large-scale and expensive overhaul of how the government tackles reskilling workers. Even the $1.9 trillion economic relief package he has proposed contains no new funds specifically for job training. Congress has invested only $345 million in workforce development to address Covid-19, according to the House Education and Labor Committee, compared to the nearly $6 billion it appropriated to respond to the Great Recession.
This “is not just an opportunity lost if we don’t help people get the skills for the jobs that are being created, it’s going to be a real drag on the economy,” said Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce. “It’s going to mean a lot of suffering for a lot of individuals.”
Forty-three percent of businesses anticipate reducing their workforce because of new technology, according to the World Economic Forum's Future of Jobs survey. In December, searches for automation engineering equipment on Thomas, a product-sourcing platform, were up more than 300 percent from the previous year. And research firm Gartner found in February that Covid-19 had caused seven out of 10 boards of directors to accelerate their digital business.
The lightning-fast shift has created a more urgent demand for worker training than ever. With an estimated 97 million new job categories that could arise from automation, companies estimate that 40 percent of workers will require reskilling.
Though automation typically affects blue-collar workers most in manufacturing and food service, the rise of other technologies like artificial intelligence is poised to imperil white-collar employees, too.
Still, Black and brown workers are bearing the brunt of the impact: Lower levels of education and other barriers to opportunity mean that minority workers are more likely than whites to be employed as cashiers, cooks, and in other occupations susceptible to automation. Even pre-pandemic, 23 percent of Black workers were in danger of losing their jobs by 2030 due to automation, by one estimate.
The dozens of employment and training programs spread across agencies as of 2019 were funded by the Labor Department via the Workforce Innovation and Opportunity Act and the Education Department’s Pell and Perkins grant programs, as well as Health and Human Services’ Temporary Assistance for Needy Families program and USDA’s SNAP Employment and Training program, to name a few.
But the pandemic has underscored that "there’s no alignment of those plans in a way that gives us the opportunity to do the type of worker retraining that is necessary,” said Nicol Turner Lee, director of Brookings’ Center for Technology Innovation. “When we come out of this, we’re going to have to figure out how we get people placed into jobs that no longer look like their normal.”
On top of that, many of the highest-performing programs — like the Labor Department’s Trade Adjustment Assistance program — are narrowly restricted, accessible to only a handful of workers who meet a strict set of criteria. such as having been adversely affected by foreign trade.
If Congress is to help workers affected by automation maintain — or regain — employment, lawmakers, workers' advocates and unions say a revamp of these programs will be necessary.
Van Kleunen says he and his team support the idea of a federal effort to bring all stakeholders — businesses, community colleges, unions — to the table for a conversation around what kind of training is needed and how it can best be provided. People close to Boston Mayor Marty Walsh, Biden's nominee for Labor secretary, say he would be on board with such a move.
“We’re going to be creating new jobs, but other jobs may be diminished or eliminated completely because of the changing economy. And we’ve got to provide the tools necessary, especially with minority workers,” said Lee Saunders, president of the American Federation of State, County and Municipal Employees.
Businesses including PwC, L’Oreal and KeyBank have already launched in-house efforts to reskill workers. But the bulk of employers lack the resources to do so and will require coordination with educational institutions and the public sector to help employees make the jump. Just 21 percent of businesses report being able to access public funds to support reskilling.
Momentum is building to streamline existing efforts to get workers retrained and back to work — including not only the 43 federal programs but safety-net measures like the unemployment insurance systems spread across all 50 states.
With many Americans out of work or employed at a company unable to do its own retraining, a key part of the conversation involves making sure workers are able to pay their rent while obtaining the skills they need to stay afloat long-term. While Biden has not specifically endorsed such an overhaul, he has said he wants to extend unemployment benefits for as long as it takes to train and reskill workers.
Rep. Andy Levin (D-Mich.), vice chair of the House Education and Labor Committee, called for reauthorizing the Workforce Innovation and Opportunity Act, which authorized funds for the Labor Department’s programs only through fiscal 2020.
“With [the legislation] up for reauthorization, we will have an opportunity to enhance our nation’s workforce system so workers have the additional opportunities to successfully compete in the 21st century workforce,” House Education and Labor Committee ranking member Virginia Foxx (R-N.C.) said.
Many other developed nations like Sweden and Germany already have such large-scale systems in place. The U.S., in comparison, spends less of its GDP on worker training than most other OECD countries. The OECD’s 2020 economic survey of the U.S. found that building out “retraining or reskilling opportunities — would help workers displaced by the coronavirus shock.”
“This isn’t pie in the sky,” said Mary Kay Henry, president of the Service Employees International Union. “There’s lots of global lessons we can draw on."