Grace Traore: 0:14

Work is all around us. It defines us. The future of work impacts nearly every person on our planet. And the ILR school at Cornell University is influencing policy and practice on the most pressing issues facing employees and employers. In this episode of"Work!" Cornell ILR School Dean Alex Colvin and New York Times reporter Eduardo Porter discuss the impact of the coronavirus on workers and the economy in the U S and globally,

Alex Colvin: 0:44

You know, something going on currently that's obviously disruptive, starting to disrupt the economy a lot, and that's the whole coronavirus episode going on. I was, I've just been reading this book by Peter Frankopan"The Silk Roads" and he's talking about how the, the silk roads, or the spice trade across Asia to Europe was one of the conduits for the black death back in the 1300s. And today we're seeing in our modern and interconnected economy that a disease can spread just like parts from a production facility in China, but you know, as much as the actual dangers of the, of the virus it's, we're starting to see that kind of human reaction process where things are shutting down because of people's fears and, and panics. And it seems like that kind of human element really can't be taken away from those kind of dismal economic models.

Eduardo Porter: 1:42

Yeah, no, that's right. And in fact, it's coronavirus incident in the is actually suggests I mean, I think that that is pro-tech yeah. The, this idea, you know, the, the, the, the coronavirus pandemic, I'm not sure that if the WHO has already called it a pandemic but it looks like one from here. Yeah. Will actually kind of encourage the, this kind of like the de-globalization urges that we've been hearing about of late. The idea that we want to produce closer to consumer markets, that we are, we're trusting less these far flung global production chains and we want to be more in control of the production process. I mean, things like the coronavirus are going to actually push in that direction. And so I wonder whether you know this in the end, I mean, this has a potential, I'm not saying that it will, but I think this has a potential of having us rethink the entire global economic order that we've had for, you know, the last 30, 40 years.

Alex Colvin: 2:53

Yeah, I think that's a, that's a really important point that this does. Crisis points tend to shift our thinking about a systems and we tend to proceed along, you know, in sort of routines as usual. And when something shakes up, it does kind of push things off. You know, when you talk about the sort way technology plays into this, technology can connect us, but also pull us apart. The interesting story I was reading this morning is about a business in England that has ordered all its workers to work from home because there was one employee who'd been in Italy, came back and he appears that he may have contracted the virus so everybody's working remotely from home. So none of us are coming in together and we're all gonna sit, sit at home. So technology can pull us you know, apart I think as well as connecting us together.

Eduardo Porter: 3:45

Yeah. Yeah. Even, even before, here's a, here's a thought that I've been, I've been, you know, chewing on for some from some time because even before the coronavirus, there was some evidence out there that the model of economic development that has powered China for the last 30 years was sort of coming to a close and did all the rest of the developing world, all those countries that had still to kind of like latch themselves onto the global production chain work. Sort of out of luck because the global production chain was petering out and, and you know, technologies like 3D printing and stuff like that were part of this story. And there's a really, there's a really interesting paper by Danny Rodrik from the Kennedy School that looks at the peak manufacturing employment in, in countries across history. And you find that peak manufacturing employment occurs at a much later stage at a much higher income in early manufacturing countries like the United States and Germany. And, and even in the kind of like the early late manufacturing successes like Japan. Over time, peak manufacturing employment is happening at a, at a, at a lower and lower income level. Suggesting that, you know, manufacturing is going to do less and less to pull countries out of poverty in, into the future. I mean, if this trend were to continue. And that kind of like fits the idea of technology replacing workers in poor countries to make stuff. Right. And so I wonder if this, you know, further encouraged by stuff like coronavirus is going to reshape the future and where would much more localized production, which as a consequence is going to shut out at the avenues of development that we've known for poor countries.

Alex Colvin: 5:39

Yeah, I think that's a really interesting point because if you think about the calculations that an American business says and thinking about going to putting production in China or Vietnam or you know, other kind of developing countries, they're going to have to make a calculation. And the calculations about the relative benefits of moving over there versus the cost of more distant production. The uncertainty that's gonna come in operating in different country, different legal system things like the coronavirus adds to that uncertainty, right? Raises the cost of doing it. And if at the same time that the technology's allowing greater ability to do it here, you know, with some additional labor costs here, but there may be a tipping point for a lot of those decisions that starts pulling pulling production back here, which in one sense is good, right? For the American economy if that's happening. But at the same time, if you think about the world economy and lifting these countries up out of poverty they're vulnerable.

Eduardo Porter: 6:42

Yeah. Yeah. And, and I would just like, I would push back a little bit on the notion that this is good for the American economy. I mean, my guess is that yes, on average it's good for the American economy, but how that goodness is distributed is up, is, is still up for grabs. So the way that I, that if you look at the, our recent past, I would, I would suggest that most of that extra good that comes from relocating stuff in the U S and having it made by machines that, that, that's going to accrue to capital, not to labor. And, and so there's a distributional question to be answered even, you know, if, if the, the American economy as a whole may benefit, how those additional benefits are distributed needs to be, needs to be thought about.

Alex Colvin: 7:32

Where do you think we're heading in terms of the impact of that on work and employment? Is this, is this typically going to be a big hit in the economy? It seems a lot of uncertainty right now, but what's, what's your sense of where things are heading?

Eduardo Porter: 7:47

You know, I, I have really no great vantage point on to that question. So this is a very, you know, sitting here in my apartment freaking out kind of. It's, I mean my guess is just from the impact on China, it has to have hurt global production and global demand in, in a substantial way that we probably haven't yet seen, you know, play out through the global economy. I mean, I'm sure there was some inventories that were, that have been now depleted because of, you know, we've shut down on deliveries and stuff like that. So I do see, I would not at all be surprised by a whatever, half a percent of GDP hit to the global economy. Yeah. That wouldn't surprise me at all. And in fact, cause you told me it's a 2% hit to the global economy, that's a really, really, really big hit. Yeah. But it kind of depends on how much of this stuff shuts down. This morning I'm reading about plans of the U S school system who, you know, to shut schools and have kids learn from their computers at home. Now that is, that's,

Alex Colvin: 8:59

That's a huge impact. Yeah, yeah, yeah. And perhaps, you know, the impact's going to be something like the metaphor of us sitting here talking remotely, doing the podcast, people listening in without going out. And maybe we, we keep doing this, but we don't go out to the Starbucks to get the coffee because, you know, we're quarantining and then it's the Starbucks person who gets

Eduardo Porter: 9:23

The Starbuck worker, gets fired, you know for sure that, I think that's sort of like how it, how it pans out. And but you know, there, there's a demand track and a supply track. And, and, and, and so it's, it's, you know, kind of like, sort of like we're in stagflation territory. I mean, it's kinda like one of these things that you, you normally expect the hit from one side and now you're getting it from both. And, and so I, I have no talent to really think this through in a very sophisticated way. I do suspect, suspect that the impact will be, will be substantial.

Alex Colvin: 10:02

Yeah. I mean, I think it is a good reminder that when we think we know what's going to happen there's a lot of uncertainty in the world and we'll, we're going to have to see how things evolve.

Eduardo Porter: 10:12

Yeah. And in fact, I mean in the one one, I think one point that should be borne in mind is we were already a little bit worried about this expansion or maybe not worried, but puzzled that has been going on so long that the labor might s how times of being extremely tight, but yet not tight enough. I mean, there w as some weirdnesses about this expansion and so there was a sense that it's kind of fragile because we don't understand what's happening with it. And so maybe, you know, once this fragility will make it more and more prone to, to suffer by this, by this disruption.

Alex Colvin: 10:51

Yeah. I think, you know, there's a lot of uncertain indicators and you know, you take a hit to it and some of the things that, you know, maybe could have come to pass may actually start coming coming into fruition. So I think, I think, you know, there's a real danger when for a rocky road ahead and, you know, typically what we know is when times get tough, it's often the most vulnerable, the low wage workers who, who really take the worst hit. And so that's where the, I think the real, real worry is.

Eduardo Porter: 11:19

Yeah, I think that's right. I think that's how it hits first.

Alex Colvin: 11:22

Yeah. Well, thanks very much Eduardo. I really appreciate you taking the time to talk to us and thanks again.

Eduardo Porter: 11:28

Thanks a million. Alex, this was really interesting.

Grace Traore: 11:34

Thank you for listening to work. Subscribe to our podcast at Work.ILR.Cornell.edu or on iTunes. In upcoming episodes our podcast will feature several prominent leaders in the labor movement beginning with a two part episode featuring ILR School Dean Alex Colvin, and Randi Weingarten, president of the American Federation of Teachers. Do you have a recommendation for a guest or topic to be discussed on a future episode? Just click on the link in the Show Notes for this episode and leave your suggestions. Again, thank you for listening.