The U.S. economy has come a long way since the darkest days of the pandemic but the future remains uncertain for many, especially those hit the hardest: low-wage workers. Last April, David Autor, an MIT economist, predicted that a pandemic-induced recession would be an “automation forcing event,” with executives rapidly deploying non-human labor to replace workers, particularly in the service sector — and he was right.

Autor andBetsey Stevenson, who served as chief economist at the U.S. Department of Labor and is currently a professor of economics and public policy at the University of Michigan, discuss COVID-19’s long-lasting impact on the ways employees will work, consume and manage family dynamics, for years to come.

Three Takeaways:

  • Fears about automation are understandable but not all automation is equal, according to Autor, who is mostly positive about the current technological change driven by tight labor markets. Autor says, “automation that is pushed by labor scarcity is almost always labor complimentary — it makes people more productive on average,” and can lead to higher wages.
  • Current hiring challenges have highlighted America’s overdependence on cheap low-wage labor, according to Stevenson, who argues that the trend “is not sustainable for anybody.” Autor and other economists expected excess labor, not labor scarcity, as we emerged from the pandemic. However, generous unemployment benefits and stimulus payments have allowed workers to be pickier about jobs, at least until the extra support runs out.
  • Researchers have found that working from home can increase productivity. Stevenson hopes workplace flexibility enjoyed during the pandemic will continue in the future, because it has made balancing a job and family life much easier, especially for working mothers, she says. Stevenson also wants employers to rethink maternity and paternity leave and offer more remote and hybrid options for new parents.