Will Spread Of COVID-19 Increase Automation Of Jobs?

The spread of COVID-19 has put millions of people out of jobs. Particularly hard hit are the restaurant and hotel industries. This could trigger a move to the automation of these jobs which is already forecast to happen.

A Brookings Study entitles “Automation and Artificial Intelligence: How Machines Are Affecting People And Places”, looks at potential job loss to automation from 2016 to 2030.

The industry with the highest potential for automation which would trigger job loss is “food preparation and serving related operations”. The chances jobs will be lost in this industry is 81%. “Production occupations” are next at 79%. The people in this category largely work in factories and assembly locations.

Among the reasons restaurants and hotels have been so hard hit is the proximity of people to one another. Automation largely eliminates that problem for people in these industries who come in contact with customers. The trend has already begun in the fast-food sector. McDonald’s Corp (NYSE: MCD) has automatic ordering options in most restaurants. And food and beverages can be ordered and paid for remotely at food retail establishments like Starbucks (NASDAQ: SBUX). Customers likely feel safer dealing with a machine than with a person who could be infected.

One of the points made by most analysts who have issued reports on jobs lost in the current recession is that they tend to be low paying, The Brookings report points out that people in the “food preparation and serving related operations” are among the lowest paid in the nation. The average wage for them is $23,900.

Families with four members in one household are considered below the poverty level if the income for the household is below $26,200. This means the risk of automation is highest among the poorest working individuals in the nation.

It is likely that the spread of COVID-19 will accelerate how companies look at automation as a way to replace workers who have the most exposure to customers. They are, for the most part, people who make very little.