The coronavirus epidemic has created enormous anxiety for virtually all workers, but particularly for those who don’t have the security of a steady paycheck, employer-provided health coverage, and other benefits of a salaried position. Chicago Booth’s Raghuram G. Rajan discusses the future implications of the crisis for gig work and the protections it may need to provide.
How will the COVID-19 crisis affect the economy and, more broadly, our relationships, once the pandemic dies down?
Well, clearly, this is going to take a lot of resources. So, you will see the world coming out with a lot more public debt at the end of this, because we will have to spend significant amounts. We will see a number of firms closing down because of the effects of the crisis itself. And you will see a certain number of jobs becoming must less appealing.
Clearly, the gig economy, which looked so wonderful when things were going swimmingly, is going to look a lot more precarious at this point—without healthcare benefits, without, effectively, having any work over sustained periods of time if things like the pandemic recur. So, at least for a while, it will be a dampener on people quitting stable jobs, or quitting jobs with salaries, and moving to the gig economy.
Technologically, this doesn’t really change anything, because our best hope is, we go back to where we were in the first place. But it does raise awareness about the fragility of a variety of occupations within the economy, and the need to put them on a more stable front going forward.
So my assumption is that this will change the way we look at safety nets. This will change the way we look at health care. And we will think about reforming them, to make sure that more people are brought into the net on a sustained basis.
But in terms of the actual production side, perhaps we’re a little more wary about disease. Just as 9/11 changed the way we dealt with airport security, we will have factory security.
But I’m not sure that it will change what is available. It may change preferences. People may not want gig jobs as much as they want more-stable jobs. And certainly, more people will agitate for good benefits.