Covid -19 and inequality
this is by investing in vocational training. 43 As global trade is set to decrease due to the Covid-19 pandemic 44 and the Fourth Industrial Revolution 45 (as manufacturing becomes more capital intensive andwages rise in traditional low-cost locations), 46 developed nations are presented with an opportunity to bring manufacturing back home. 47 This could provide the economy with far more high-quality jobs, and, as it is inherently easier to increase the productivity of manufacturing firms, could simultaneously be a solution to Britain’s dwindling produc tivity growth. However, the COVID-19 crisis is also set to hasten automation, 48 which has the possibility of creating mass unemployment of lower-skilled workers. 49 To avoid this, it is crucial to equip workers with new skills by increasing the availability of vocational training schemes and Further Education. 50 For instance, an opportunity grant of £3000 could be offered to everyone, as well as a radically simplified and more generous apprenticeship model. 51 This is proven to enhance the economic resilience and productivity of workers, 52 and could help the 4.6 million low-skilled people in the UK. 53
Figure 4. How much higher are the wages of high-skilled workers than those of low- skilled workers? 54
Despite
the
additional
jobs
investments
in
Further Education may bring, there will undoubtedly bemore workers in part-time jobs. part of the reason why UK inequality is greater than the OECD average, 55 in
43 David Goodhart. ‘A training opportunity in the face of crisis: How the Covid- 19 response can help sort out Britain’s training mess ’. Policy Exchange. May 2020: 1 -12. 44 Down but not out? Globalization and the threat of Covid-19, A report by The Economist Intelligence Unit 45 https://www.wita.org/nextgentrade/fourth-industrial-revolution-changing-trade/. 46 https://image-src.bcg.com/Images/BCG_Man_and_Machine_in_Industry_4_0_Sep_2015_tcm9-61676.pdf - page 3 47 https://www.wita.org/nextgentrade/fourth-industrial-revolution-changing-trade/. 48 COVID-19 AND IMPLICATIONS FOR AUTOMATION by Alex W. Chernoff Casey Warman , Working Paper 27249 http://www.nber.org/papers/w27249, NATIONAL BUREAU OF ECONOMIC RESEARCH 49 Karl benedict Frey Oxford automation paper. 50 David Goodhart. ‘A training opportunity in the face of crisis: How the Covid- 19 response can help sort out Britain’s training mess ’. Policy Exchange. May 202 0: 1-12. 51 David Goodhart. ‘A training opportunity in the face of crisis: How the Covid - 19 response can help sort out Britain’s training mess’. Policy Exchange. May 2020: 1 -12. 52 ‘The Future of Work: A vision for the national retraining scheme’. The Centre for Social Justice February 2019: 1-57. 53 ‘The Future of Work: A vision for the national retraining scheme’. The Centre for Social Justice February 2019: 1-57. 54 OECD. ‘Do skills matter for wage inequality?’, February 2016: 5. https://wol.iza.org/uploads/articles/232/pdfs/do- skills-matter-for-wage-inequality.pdf. 55 OECD, Pier Carlo Padoan. ’Reducing income inequality while boosting economic growth: Can it be done?’ Chapter 5. (2012): 182. http://www.oecd.org/economy/labour/49421421.pdf
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