The Impact of the Coronavirus On Workers

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 around the globe.

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Episode Transcript

Grace Traore (00:27):
Work is all around us.
It defines us.
The future of work impactsnearly every person on our
planet.
And the ILR school at CornellUniversity is influencing policy
and practice on the mostpressing issues facing employees
and employers.
In this episode of"Work!"Cornell ILR School Dean Alex

(00:47):
Colvin and New York Timesreporter Eduardo Porter discuss
the impact of the coronavirus onworkers and the economy in the U
S and globally,

Alex Colvin (00:57):
You know, something going on currently that's
obviously disruptive, startingto disrupt the economy a lot,
and that's the whole coronavirusepisode going on.
I was, I've just been readingthis book by Peter Frankopan"The
Silk Roads" and he's talkingabout how the, the silk roads,
or the spice trade across Asiato Europe was one of the

(01:20):
conduits for the black deathback in the 1300s.
And today we're seeing in ourmodern and interconnected
economy that a disease canspread just like parts from a
production facility in China,but you know, as much as the
actual dangers of the, of thevirus it's, we're starting to

(01:40):
see that kind of human reactionprocess where things are
shutting down because ofpeople's fears and, and panics.
And it seems like that kind ofhuman element really can't be
taken away from those kind ofdismal economic models.

Eduardo Porter (01:55):
Yeah, no, that's right.
And in fact, it's coronavirusincident in the is actually
suggests I mean, I think thatthat is pro-tech yeah.
The, this idea, you know, the,the, the, the coronavirus
pandemic, I'm not sure that ifthe WHO has already called it a

(02:16):
pandemic but it looks like onefrom here.
Yeah.
Will actually kind of encouragethe, this kind of like the
de-globalization urges thatwe've been hearing about of
late.
The idea that we want to producecloser to consumer markets, that
we are, we're trusting lessthese far flung global

(02:37):
production chains and we want tobe more in control of the
production process.
I mean, things like thecoronavirus are going to
actually push in that direction.
And so I wonder whether you knowthis in the end, I mean, this
has a potential, I'm not sayingthat it will, but I think this
has a potential of having usrethink the entire global

(03:01):
economic order that we've hadfor, you know, the last 30, 40
years.

Alex Colvin (03:07):
Yeah, I think that's a, that's a really
important point that this does.
Crisis points tend to shift ourthinking about a systems and we
tend to proceed along, you know,in sort of routines as usual.
And when something shakes up, itdoes kind of push things off.
You know, when you talk aboutthe sort way technology plays
into this, technology canconnect us, but also pull us

(03:30):
apart.
The interesting story I wasreading this morning is about a
business in England that hasordered all its workers to work
from home because there was oneemployee who'd been in Italy,
came back and he appears that hemay have contracted the virus so
everybody's working remotelyfrom home.
So none of us are coming intogether and we're all gonna

(03:51):
sit, sit at home.
So technology can pull us youknow, apart I think as well as
connecting us together.

Eduardo Porter (03:58):
Yeah.
Yeah.
Even, even before, here's a,here's a thought that I've been,
I've been, you know, chewing onfor some from some time because
even before the coronavirus,there was some evidence out
there that the model of economicdevelopment that has powered
China for the last 30 years wassort of coming to a close and

(04:19):
did all the rest of thedeveloping world, all those
countries that had still to kindof like latch themselves onto
the global production chainwork.
Sort of out of luck because theglobal production chain was
petering out and, and you know,technologies like 3D printing
and stuff like that were part ofthis story.

(04:40):
And there's a really, there's areally interesting paper by
Danny Rodrik from the KennedySchool that looks at the peak
manufacturing employment in, incountries across history.
And you find that peakmanufacturing employment occurs
at a much later stage at a muchhigher income in early

(05:01):
manufacturing countries like theUnited States and Germany.
And, and even in the kind oflike the early late
manufacturing successes likeJapan.
Over time, peak manufacturingemployment is happening at a, at
a, at a lower and lower incomelevel.
Suggesting that, you know,manufacturing is going to do
less and less to pull countriesout of poverty in, into the

(05:25):
future.
I mean, if this trend were tocontinue.
And that kind of like fits theidea of technology replacing
workers in poor countries tomake stuff.
Right.
And so I wonder if this, youknow, further encouraged by
stuff like coronavirus is goingto reshape the future and where
would much more localizedproduction, which as a

(05:46):
consequence is going to shut outat the avenues of development
that we've known for poorcountries.

Alex Colvin (05:52):
Yeah, I think that's a really interesting
point because if you think aboutthe calculations that an
American business says andthinking about going to putting
production in China or Vietnamor you know, other kind of
developing countries, they'regoing to have to make a
calculation.
And the calculations about therelative benefits of moving over

(06:12):
there versus the cost of moredistant production.
The uncertainty that's gonnacome in operating in different
country, different legal systemthings like the coronavirus adds
to that uncertainty, right?
Raises the cost of doing it.
And if at the same time that thetechnology's allowing greater
ability to do it here, you know,with some additional labor costs

(06:35):
here, but there may be a tippingpoint for a lot of those
decisions that starts pullingpulling production back here,
which in one sense is good,right?
For the American economy ifthat's happening.
But at the same time, if youthink about the world economy
and lifting these countries upout of poverty they're
vulnerable.

Eduardo Porter (06:55):
Yeah.
Yeah.
And, and I would just like, Iwould push back a little bit on
the notion that this is good forthe American economy.
I mean, my guess is that yes, onaverage it's good for the
American economy, but how thatgoodness is distributed is up,
is, is still up for grabs.
So the way that I, that if youlook at the, our recent past, I

(07:20):
would, I would suggest that mostof that extra good that comes
from relocating stuff in the U Sand having it made by machines
that, that, that's going toaccrue to capital, not to labor.
And, and so there's adistributional question to be
answered even, you know, if, ifthe, the American economy as a
whole may benefit, how thoseadditional benefits are

(07:43):
distributed needs to be, needsto be thought about.

Alex Colvin (07:46):
Where do you think we're heading in terms of the
impact of that on work andemployment?
Is this, is this typically goingto be a big hit in the economy?
It seems a lot of uncertaintyright now, but what's, what's
your sense of where things areheading?

Eduardo Porter (08:00):
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 justfrom the impact on China, it has
to have hurt global productionand global demand in, in a

(08:23):
substantial way that we probablyhaven't yet seen, you know, play
out through the global economy.
I mean, I'm sure there was someinventories 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 allbe surprised by a whatever, half

(08:47):
a percent of GDP hit to theglobal economy.
Yeah.
That wouldn't surprise me atall.
And in fact, cause you told meit's a 2% hit to the global
economy, that's a really,really, really big hit.
Yeah.
But it kind of depends on howmuch of this stuff shuts down.
This morning I'm reading aboutplans of the U S school system
who, you know, to shut schoolsand have kids learn from their

(09:10):
computers at home.
Now that is, that's,

Alex Colvin (09:13):
That's a huge impact.
Yeah, yeah, yeah.
And perhaps, you know, theimpact's going to be something
like the metaphor of us sittinghere talking remotely, doing the
podcast, people listening inwithout going out.
And maybe we, we keep doingthis, but we don't go out to the
Starbucks to get the coffeebecause, you know, we're
quarantining and then it's theStarbucks person who gets

Eduardo Porter (09:36):
The Starbuck worker, gets fired, you know for
sure that, I think that's sortof like how it, how it pans out.
And but you know, there, there'sa 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 instagflation territory.

(09:57):
I mean, it's kinda like one ofthese things that you, you
normally expect the hit from oneside and now you're getting it
from both.
And, and so I, I have no talentto really think this through in
a very sophisticated way.
I do suspect, suspect that theimpact will be, will be
substantial.

Alex Colvin (10:15):
Yeah.
I mean, I think it is a goodreminder that when we think we
know what's going to happenthere's a lot of uncertainty in
the world and we'll, we're goingto have to see how things
evolve.

Eduardo Porter (10:25):
Yeah.
And in fact, I mean in the oneone, I think one point that
should be borne in mind is wewere already a little bit
worried about this expansion ormaybe not worried, but puzzled
that has been going on so longthat the labor might s how times
of being extremely tight, butyet not tight enough.

(10:46):
I mean, there w as someweirdnesses about this expansion
and so there was a sense thatit's kind of fragile because we
don't understand what'shappening with it.
And so maybe, you know, oncethis fragility will make it more
and more prone to, to suffer bythis, by this disruption.

Alex Colvin (11:04):
Yeah.
I think, you know, there's a lotof uncertain indicators and you
know, you take a hit to it andsome of the things that, you
know, maybe could have come topass 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 themost vulnerable, the low wage

(11:26):
workers who, who really take theworst hit.
And so that's where the, I thinkthe real, real worry is.

Eduardo Porter (11:32):
Yeah, I think that's right.
I think that's how it hitsfirst.

Alex Colvin (11:35):
Yeah.
Well, thanks very much Eduardo.
I really appreciate you takingthe time to talk to us and
thanks again.

Eduardo Porter (11:42):
Thanks a million .
Alex, this was reallyinteresting.

Grace Traore (11:47):
Thank you for listening to work.
Subscribe to our podcast atWork.ILR.Cornell.edu or on
iTunes.
In upcoming episodes our podcastwill feature several prominent
leaders in the labor movementbeginning with a two part
episode featuring ILR SchoolDean Alex Colvin, and Randi

(12:08):
Weingarten, president of theAmerican Federation of Teachers.
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