COVID-19 Recession: Is the age of robots upon us?

May 26, 2020

3 min read

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What's going on here?

A recession following the COVID-19 pandemic could lead to job losses and an increased use of robots in the workplace.

What does this mean?

The coronavirus outbreak has led to a surge in unemployment, as businesses have been forced to close to prevent the spread of the virus. In the UK alone, the unemployment figure has reached 1.3m people in the first three months of this year. 

An increasing number of businesses are investing in robots to work alongside staff. America’s biggest retailer, Walmart, has been using robots to help scrub floors. Automatic delivery bots have been used by The Co-operative supermarket in Milton Keynes in the UK since 2018, allowing for contact-free food deliveries. Amazon also uses robots in 26 of their fulfilment centres to help sort and transport packages.

Whilst robots are becoming more commonly used in the workplace, the COVID-19 outbreak will likely lead to businesses investing in them even more. This is because human workers are often unable to socially distance themselves properly, so use of robots is an ideal solution to allow individuals to distance and undertake work safely.  There is, however, a worry that increased use of robots could put jobs at risk.

What's the big picture effect?

The concern is that although business closures and social distancing measures are temporary, the economic downturn will have lasting effects on the global economy, causing a recession. Mark Munro, senior fellow and policy director at the Brookings Institution’s Metropolitan Policy Program has argued that “any coronavirus-related recession is likely to bring about a spike in labour-replacing automation”. The recession’s global scale would mean that in the long-term, businesses everywhere could save money by investing in robots. A 2017 report by global consultants McKinsey also predicted that by 2030, a third of workers in the United States would be replaced by automation. The current pandemic can only speed up this timeline; the rolling out of temperature-taking robots in South Korea illustrates how this technology can be implemented quickly if necessary.

Academics Nir Jaimovich and Henry E. Siu found that in three recessions over the last thirty years, 88% of job losses occurred in automatable occupations in areas such as food services and manufacturing. Therefore, as businesses begin to re-open, we can expect to see more widespread application of robots.  This could include automated cleaners in schools or offices for example. Once a business has invested in this technology, it is unlikely to re-open the job role, as robots are more cost-effective once up and running. People are expensive and can become sick; technology is more reliable in times of crisis.

However, the increased use of robots in the workplace comes with potential legal issues. Mass redundancies could become a problem if workers’ roles are automated and employers could face legal challenges if they do not adhere to the correct consultation processes. There is also a liability issue; if a robot caused a fatal mistake in a factory for example, who would be liable – would it be the robot manufacturer? The European Parliament unsuccessfully attempted to introduce a legal status of “electronic personhood” that would be applicable to robots a few years ago, but this may be reconsidered if robot usage increases in the future. The law currently surrounding robot use is unclear, which could limit their implementation in practice.

Ultimately, during the current crisis, robots have not replaced people. They have either performed tasks that humans are unable to undertake safely, or helped reduce the human workload. The future remains bright, as the constant development of technology helps to shape the economy.

Report written by Rowenna Allen

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