The pandemic has left millions of Americans unemployed – including many in the hospitality industry, which has seen a rise in the adoption of new tech
They can check you in and deliver orange juice to your hotel room, answer your questions about a missing package, whip up sushi and pack up thousands of subscription boxes. And, perhaps most importantly, they are completely immune to Covid-19. While people have had a hard time in the coronavirus pandemic, robots are having a moment.
The Covid-19 pandemic has left millions of Americans unemployed – disproportionately those in the service industries where women and people of color make up the largest share of the labor force. In October, 11 million people were unemployed in the US, compared with about 6 million people who were without a job during the same time last year.
And as humans are experiencing record job losses and economic uncertainty, robots have become a hot commodity. Multiple technology manufacturers have reported increased demand for their bots over the course of the pandemic, from drone-like machines that can roam hallways to make deliveries and AI-powered customer service software to increased use of self-service checkouts at supermarkets.
A recent report from the World Economic Forum predicted that by 2025 the next wave of automation – turbocharged by the pandemic – will disrupt 85m jobs globally. New jobs will be created but “businesses, governments and workers must plan to urgently work together to implement a new vision for the global workforce”.
The hospitality industry, which has been one of the hardest-hit by the pandemic, has seen a clear uptick in the adoption of new technology during the pandemic. Hotels are allowing guests to use kiosks to check themselves in, apps to control the television and light switches in their room and a few use delivery bots to send to guests’ room when they want a refreshment.
Ron Swidler, chief information officer of the Gettys Group, a hotel design and development consultancy firm, said more hotels are experimenting with new technology during the pandemic. Swidler leads the Hotel of Tomorrow, a consortium of hospitality leaders that was re-upped in the middle of the pandemic to think of ways to innovate the industry. The group came up with five “big ideas” on how the industry needs to change, and new technology – including robots – are a core part of the equation.
“The cost [of automation] is coming down, the technology is getting better and we are seeing innovation working effectively in other parts of the world that we can transfer here,” Swidler said, citing Alibaba’s FlyZoo hotel that is staffed nearly entirely by technology, from check-in to room service.
While the idea of being serviced by a BB-8 lookalike in a hotel may seem strange, Swidler said permanent job losses in the industry will be a reality as hotels adopt new technologies to try to save on labor costs.
It is unclear whether the increased demand for new technology has directly caused job losses during the pandemic, but a discussion paper published by the Federal Reserve Bank of Philadelphia in September found that “automatable” jobs – occupations that could be replaced by technology that is in development or is already available – lost 4.2 more jobs per every 100 than occupations that are less at risk for automation. Occupations that are considered automatable include hotel desk clerks, shuttle drivers and retail salespeople, according to the paper.
The paper’s authors raise the widely shared concern that the automation undertaken during the pandemic will be a permanent replacement for jobs.
“The longer time it takes to fully control the virus, the higher the probability that the labor-saving technology will become permanent,” said Lei Ding, senior economic advisor at the Federal Reserve Bank of Philadelphia and co-author of the paper. “Job losses will become permanent losses.”
Currently, there are only anecdotal examples of permanent job loss due to an uptick in automation brought on by the pandemic, but the layoffs of hundreds of Pennsylvania toll booth workers provides one clear example of how labor-saving technology can sweep away jobs.
In June, the Pennsylvania Turnpike Commission laid off about 500 toll collectors in the state when it switched to all-electronic toll collecting.
For years, the commission had talked about replacing toll booth workers with automated collectors, and they finally gave workers a timeline. Per a union agreement, workers were supposed to be kept on payroll until at least October 2021, with final layoffs happening by January 2022.
When the pandemic arrived, collectors were sent home in March and were promised that the commission would still uphold the October 2021 date. But in June, the commission permanently laid off all workers, over a year before the agreed date.
“We understand the safety of employees is the most important thing, but for them to have safety mean the elimination of their jobs … It’s been devastating,” said Jock Rowe, principal officer for Teamsters Local 77, the union representing 300 of the laid-off toll workers.
Rowe cited other toll-collecting agencies that brought back toll workers with enhanced safety measures, including the Port Authority of New York and New Jersey.
The impact of a recession on the growth of automation has been well-documented by economists and has shown that automation does not grow steadily, but rather happens in bursts. Businesses are more likely to automate after experiencing economic shocks, when they have strong incentives to save on labor.
For a study published in 2016, researchers from the University of Rochester combed through 87m job postings online from before and after the Great Recession. They found that employers in cities that were hit hardest by the recession were replacing workers with labor-saving technology and more skilled workers. A report published by the Century Foundation found that “robot intensity” increased in 2009, in the immediate wake of the Great Recession, particularly in the manufacturing industry.
While an increase in automation can be good for educated workers and help to stimulate the economy, studies have also shown that new technology tends to leave low-wage workers behind.
“Automation has been a major driver in the increase in inequality,” said Daron Acemoglu, an economist at the Massachusetts Institute of Technology. Acemoglu co-authored a study published in May that showed automation creates a “prosperity gap” that benefits high-skilled workers at the sake of lower-skilled workers.
Low-wage workers are not only more susceptible to job loss and wage depression due to automation, but they also experienced the most job losses due to shutdowns. Higher-wage workers are more likely to be able to work from home during the pandemic, while lower-wage workers – a disproportionate number of whom are Black or Hispanic – were more susceptible to layoffs due to shutdown orders.
An important caveat many roboticists will point out is that artificial intelligence technology is not quite smart enough to cause mass waves of layoffs due to robots. New AI technology can take a lot of money, time and resources to set up, something that many businesses do not have during the pandemic.
“You should definitely not worry about losing your job to an AI-enabled robot right now. If you’re going to lose your job to automation, it’s going to be … some proven, well-known automation that is more than 10 or 15 years old,” said Matt Beane, an assistant professor at the University of Santa Barbara’s Technology Management Program.
AI has “tremendous potential for making humans more productive” without replacing humans, Acemoglu said, if society takes a human-centric approach to technological advances. But without the political will to make sure those who do lose jobs are taken care of, by training them for new jobs, for example, the impact of automation may be devastating and a pandemic that has already hit those workers hardest could be leave a lasting legacy of unemployment.
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