Service Work in the Pandemic Economy

Aaron Benanav

doi:10.1017/s0147547920000216

Abstract

The rapid spread of COVID-19 interacted with long-unfolding economic trends to set a global tinder box aflame. Over the past thirty years, the world's workforce has increasingly found employment in low-wage, low-productivity jobs in the global services sector. The pandemic lockdowns hit these sorts of activities the hardest. Opportunities to work evaporated, spreading both poverty and hunger around the world. The same rise in global service sector employment shares, which amplified the pandemic lockdown's destructive effects, will now slow the pace of the recovery. The transition to a services-based economy has accelerated, due to what José Antonio Ocampo and Tomasso Faccio call “too much excess capacity and too little certainty about future demand,” which have depressed levels of investment and ushered in a period of economic stagnation. COVID-19 will make these tendencies worse. Weak economic recoveries will further entrench an economic order in which employers pay little attention to workers’ demands, deepening employment insecurity and economic inequality. The future for labor looks bleak. What that means for the future of working people remains an open question. Their fight for dignity, in the midst of the pandemic and post-pandemic eras, will prove decisive.

Highlights

The rapid spread of COVID-19 interacted with long-unfolding economic trends to set a global tinder box aflame.[1]
As COVID-19 cases continue to rise around the world, and surge in the most populous countries of the Global South, it seems likely that economic conditions will worsen before they get better
The Spanish Flu Pandemic occurred during World War I, but there is no other case of pandemic-induced global recession.[7]

Summary

Aaron Benanav

The rapid spread of COVID-19 interacted with long-unfolding economic trends to set a global tinder box aflame.[1]. Instead of a crisis of finance, the world experienced a crisis of trade, with international trade levels projected to fall by an estimated 20 percent in 2020.5 In many countries, the trade shock preceded the virus shock For most people, this crisis will exceed anything in living memory. In the richest countries in the world, like the United States and France, services already account for 70 to 80 percent of all employment.[17] Less well known is that services account for the majority of employment in many Global South countries, such as Brazil and Iran.[18] we are either just approaching or have passed the turning point at which services account for half of all employment globally.[19] Precarious urban workers in the world’s low-wage service sector have suffered the most from the pandemic lockdown

Faulty unemployment statistics

The global labor crunch

Overcrowded markets and jobless recoveries

Findings

The future for working people