Co-authored with Chaitali Mukherjee, Lead Partner, People & Organisation, PwC India and Ingrid Carlson, Global Strategy & Leadership, Director, PwC US. Original article published in the Global Solutions Journal Issue 7.
114 million jobs were lost globally in 2020 relative to 2019. Women and young people bore the brunt of the losses, in relative terms, and lower-skilled sectors were hit hard even as some high-skilled sectors demonstrated job growth.1 What began as a global health crisis has developed into an economic one as well, resulting in widespread business failures and social and political upheaval. While few have been spared at least some impact, poor, marginalized and vulnerable communities, as well as their workforces, have been disproportionately affected.
''Healthy societies help economies grow, and healthy economies help societies thrive.''
Today, vaccine programmes are allowing many countries to begin reopening following months of lockdowns, stringent public health protocols, and remote working. But the good news is tempered by the fact that the emerging economic recovery already is proving unequal. Individuals who were most well-off and suffered least – those who largely work in knowledge jobs and sectors that were able to adapt technologically – are now recovering fastest, increasing the polarization found within societies and labor markets.
Bridging this gap will require governments and businesses to work together toward a shared vision of economies that are stronger and more resilient because they are more sustainable.2 In other words, sustainable societal progress must be a deliberate design goal rather than the presumptive after-effect of economic growth. If businesses or governments approach the challenge alone, it will almost certainly ensure that we rebuild in the shadows of our current system, which is no longer delivering for the whole of society.
G20 governments and business leaders, therefore, should consider how to work together to design policies and programmes that will help shape sustainable and inclusive societies in a post-COVID-19 world. They should consider what incentives can help businesses prepare their workforces for this future and what can be done to help people to equip themselves with the skills that business needs. To create these opportunities will require deliberately designed and targeted initiatives: upskilling programs that help people work in roles that increasingly use new technology; reskilling programs that allow people to operate in new roles; and even entrepreneurship programs. And as societal progress is a focus, it will also require policy makers and businesses to reimagine the concept of fair work through the lens of good jobs in growing sectors: jobs that are safe, fairly compensated, reasonably secure and motivating, and that leverage the human skills of workers. These good jobs, in turn, will deliver higher levels of productivity.3
For decades before COVID-19, there had been an increased decoupling of economic progress and societal gains.4 Widening inequalities were fomenting growing social discontent and unrest as a result of low wage growth across the world, particularly for low- and middle-income jobs,5 and a widening skills gap.6 Even as unemployment across OECD nations stood at a low 5.4% in 2019,7 many workers increasingly ended up in insecure, low-wage, low-skill jobs, particularly in the gig economy.8, 9 Indeed, globally the share of national income going to labor has declined 10 while productivity has risen much faster than real wages, creating inequities:11 the highest earners have captured an increasingly large portion of income, while those at the bottom have seen their portion significantly decline.12 Measured by the Gini coefficient,13 income inequality was the highest in the US among G7 countries in 201714 despite the fact the US unemployment rate was just 4.1% in December of that year.15 Indeed, income growth in the U.S. since 2011 has been stronger among the top 5% of families.16
COVID-19 further exacerbated this situation. Government mandates that shut down factories, offices, restaurants, hotels, retailers, and entertainment venues disproportionately affected women, minorities, and low-skilled workers unable to work from home.17, 18 High-income workers hold a disproportionate number of jobs that can be done via telework19 while lower-income workers are less likely to be able to work from home and more likely to lose their jobs.20 Current upskilling efforts unwittingly may be reinforcing these disparities: Only 28% of school-leavers, as opposed to 46% of postgraduates, say their employers give them opportunities to improve their digital skills. Likewise, approximately half as many employees in industries most at risk of disruption felt they were likely to get opportunities to improve their digital skills as those in industries least at risk of disruption.21
These statistics are even more concerning when placed in the context of overall employment. As of 2019, more than 60% of the world’s employed population – two billion people – worked in the informal economy22 and the pandemic could push as many as 150 million people into poverty by the end of 2021.23 And it will be the largest economies that are likely to pull further ahead of the developing world post-COVID, given the sheer size of their financial stimulus packages and economic recovery plans. The OECD and G20 countries have deployed an unprecedented USD 11 trillion to kickstart their recoveries and help their populations.24
''Sustainable societal progress must be a deliberate design goal rather than the presumptive after-effect of economic growth.''
Spurred by these government-backed stimulus programs and the prospects of a vaccinated workforce, many forecasters and business leaders are cautiously optimistic about the future. The World Bank, in its January 2021 Global Economic Prospects report, said it expects the global economy to expand by 4% this year after contracting 4.3% in 2020.25 Businesses are also optimistic, with 76% of CEOs surveyed in PwC’s 24th Annual Global CEO survey report saying that the global economic outlook will improve in 2021 with 36% of them very confident about their companies’ revenue growth prospects for the next year.26
GDP and other financial measures, however, do not provide the full picture of healthy, thriving societies. Economic measures and job creation policies solely focused on driving productivity and revenue generation can only provide a partial and single-sided view of the overall health and wellness of a society and its people. To better understand the complexity of the situation, governments and businesses need more nuanced indicators of societal well-being which in turn will highlight the need to enact policies and programs that create not only more jobs, but good jobs that ultimately benefit individuals and societies as a whole
There are several such examples where this is happening. Singapore’s SkillsFuture program has employers help identify sector-specific jobs and skills which are then used to create skills frameworks and Industry Transformation Maps, and the government provides financial credits to citizens over 25 to acquire relevant training.27, 28 In the US, the Metro Atlanta Chamber (Atlanta Chamber of Commerce) announced in February an initiative to leverage the resources and expertise of the area’s business community to advance racial equity via measurable action items focused on workforce development, economic development and education.29 In India, the Government and the IT industry led by the industry’s trade association, NASSCOM, have launched FutureSkills PRIME to upskill 1.4 million workers on emerging technologies over the next five years. This “digital skilling ecosystem” includes free courses and subsidized training provided to over 400,000 individuals,30 all aimed at helping the country become a “global hub of talent in emerging technologies.”31
The challenge now facing governments and the private sector is to work together to create a more sustainable, inclusive society; in part, this can be achieved through the creation of good jobs and by providing people with the requisite education and skills training needed to succeed. The following policy recommendations for governments and businesses offer solutions towards achieving this goal.
'' Bridging this gap will require governments and businesses to work together toward a shared vision of economies that are stronger and more resilient because they are more sustainable.''
COVID-19 has made it clear that the world’s governments, together with businesses and civil society, must reimagine the vision of what thriving economies and societies should be – ones that are defined by the opportunity to engage in quality, meaningful work within a system that is sustainable and humane. It will be challenging to make this vision a reality, and it will require compromise and political will at a time when nations already are having to make difficult decisions. However, COVID-19 has shown us that, when we harness our collective imagination and will, we can create extraordinary things.
1 International Labour Organisation. “ILO Monitor: COVID-19 and the world of work. Seventh edition.” 25 January 2021, p. 2, https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/ briefingnote/wcms_767028.pdf
2 Kelly, Colm. “Repurposing our economies - and our businesses.” G20 Japan Overarching Insights, 3 June 2019, https://www.g20-insights.org/policy_briefs/repurposing-our-economies-and-our-businesses/NO
3 Sethi, Bhushan; Brown, Justine; Goldberg, Stefanie. “Policy Brief: Delivering economic value and societal cohesion through “good jobs.” Task Force 6: Economy, Employment, and Education in the Digital Age. October 2020. https://t20saudiarabia.org.sa/en/briefs/Documents/T20_TF6_PB12.pdf
4 Lima de Miranda, Katharina, and Snower, Dennis. “Recoupling economic and social progress.” G20 Insights, 10 December 2020. https://www.g20-insights.org/policy_briefs/recoupling-economic-and-social-progress/
5 United Nations Department of Economic and Social Affairs. “World Social Report 2020: Inequality in a Rapidly Changing World.” 2020, pp 48-50, https://www.un.org/development/desa/dspd/wp-content/uploads/ sites/22/2020/01/World-Social-Report-2020-FullReport.pdf
6 Organisation for Economic Cooperation and Development. “OECD Wage Inequality 2015: Chapter 2 Skills and Wage Inequality.” 2015, https://dx.doi.org/10.1787/empl_outlook-2015-6-en
7 Organisation for Economic Cooperation and Development. “OECD Unemployment Rates, News Release: July 2020.” Paris, 9 September 2020, https://www.oecd.org/sdd/labour-stats/unemployment-rates oecd-09-2020.pdf
8 Organisation for Economic Cooperation and Development. “OECD Compendium of Productivity Indicators 2019.” 2019, page 29 (page 31 online), https://read.oecd-ilibrary.org/industry-and-services/oecd-compendium of-productivity-indicators-2019_b2774f97-en#page31
9 International Labour Organisation. “Helping the gig economy work better for gig workers.” https://www.ilo.org/washington/WCMS_642303/lang--en/index.htm
10 International Labour Organisation. “The Global Labour Income Share and Distribution - Key Findings.” Data Production and Analysis Unit, ILO Department of Statistics, July 2019, p. 7, https://www.ilo.org/wcmsp5/ groups/public/---dgreports/---stat/documents/publication/wcms_712232.pdf
11 Organisation for Economic Cooperation and Development. “OECD Economic Outlook, Vol 2018, Issue 2.” November 2018, p 55, https://www.oecd.org/economy/outlook/Decoupling-of-wages-from-productivity november-2018-OECD-economic-outlook-chapter.pdf
12 International Labour Organisation. “The Global Labour Income Share and Distribution - Key Findings.” Data Production and Analysis Unit, ILO Department of Statistics, July 2019, p. 3, https://www.ilo.org/wcmsp5/ groups/public/---dgreports/---stat/documents/publication/wcms_712232.pdf
13 The Gini coefficient, or Gini index, “measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution…[A]Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality” according to the World Bank. https://databank.worldbank.org/metadataglossary/gender-statistics/ series/SI.POV.GINI
14 Organisation for Economic Cooperation and Development. “OECD Income Distribution Database (IDD): Gini, poverty, income, Methods, and Concepts.” http://www.oecd.org/social/income-distribution-database.htm. Japan Gini coefficient data as of 2015.
15 US Department of Labor, Bureau of Labor Statistics. “U-3 unemployment rate was 4.1 percent in December 2017; U-6 was 8.1 percent.” TED: The Economics Daily, 10 January 2018, https://www.bls.gov/opub/ ted/2018/u-3-unemployment-rate-was-4-1-percent-in-december-2017-u-6-was-8-1-percent.htm?view_ full#:~:text=The%20unemployment%20rate%20was%204.1,in%20the%20U.S.%20labor%20force.
16 Horowitz, Juliana M, Igielnik, Ruth, and Kochhar, Rakesh. “Trends in Income and wealth inequality.” 9 January 2020, https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth inequality/
17 International Labour Organisation. “COVID-19 and the world of work. Seventh edition.” 25 January 2021, pg 20, https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/briefingnote/ wcms_767028.pdf
18 Gezici, A., Ozay, O. An Intersectional Analysis of COVID-19 Unemployment. J Econ Race Policy 3, 270–281 (2020). https://doi.org/10.1007/s41996-020-00075-w.
19 Sanchez, Daniel G, et al. “Who on earth can work from home?” World Bank Group, Development Research Group, July 2020, p. 3. http://documents1.worldbank.org/curated/en/225881596202941026/pdf/Who-on-Earth Can-Work-from-Home.pdf
20 Cugat, Gabriela and Narita, Futoshi. “How COVID-19 Will Increase Inequality in Emerging Markets and Developing Economies.” IMF Blog, 29 October 2020. https://blogs.imf.org/2020/10/29/how-covid-19-will increase-inequality-in-emerging-markets-and-developing-economies/
21 PwC. “Hopes and Fears 2021: The views of 32,500 workers.” March 2021. https://www.pwc.com/gx/en/issues/ upskilling/hopes-and-fears.html
22 OECD/ILO. “Tackling Vulnerability in the Informal Economy.” Development Centre Studies, OECD Publishing, Paris, p. 16, https://doi.org/10.1787/939b7bcd-en
23 The World Bank. “COVID-19 to Add as Many as 150 Million Extreme Poor by 2021.” Press Release. 7 October 2020. https://www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many as-150-million-extreme-poor-by-2021#:~:text=The%20COVID%2D19%20pandemic%20is,severity%20of%20 the%20economic%20contraction
24 Dirk-Jan Omtzigt and Ashley Pople, “The Price of Inaction During The COVID-19 Crisis,” Center for Global Development, July 15, 2020, https://www.cgdev.org/blog/price-inaction-during-covid-19-crisis
25 The World Bank. “Global Economic Prospects.”January 2021, pp 4-5, https://www.worldbank.org/en/ publication/global-economic-prospects
26 PwC, “24th Annual Global CEO Survey.” March 2021, https://www.pwc.com/gx/en/ceo-agenda/ ceosurvey/2021.html
27 SkillsFuture Singapore, https://www.skillsfuture.gov.sg/
28 Fung, Michael. “Developing a Robust System for Upskilling and Reskilling the Workforce: Lessons from the SkillsFuture Movement in Singapore.” 3 November 2020, In: Panth B., Maclean R. (eds) Anticipating and Preparing for Emerging Skills and Jobs. Education in the Asia-Pacific Region: Issues, Concerns and Prospects, vol 55. Springer, Singapore. https://doi.org/10.1007/978-981-15-7018-6_39
29 Metro Atlanta Chamber Newsroom. “More than 150 Metro Atlanta Companies Leverage Collective Impact to Advance Racial Equity.” 9 February 2021, https://www.metroatlantachamber.com/about/news-press/ newsroom/more-than-150-metro-atlanta-companies-leverage-collective-impact-to-advance-racial-equity
30 Dharmaraj, Samaya. “India launches platform for digital upskilling.” OpenGovAsia, 27 November 2020, https://opengovasia.com/india-launches-platform-for-digital-upskilling/
32 Sethi, Bhushan and Stubbings, Carol. “Good Work.” Strategy & Business, 18 February 2019, https://www.strategy-business.com/feature/Good-Work
33 Organisation for Economic Cooperation and Development. “How’s Life? 2020. Measuring Well-being.” OECD Publishing, Paris, https://doi.org/10.1787/9870c393-en
34 Lima de Miranda, Katharina, and Dennis J. Snower. 2020. “Recoupling Economic and Social Prosperity.” Global Perspectives, February. https://doi.org/10.1525/001c.11867
35 Brown, Pete. “An upskilled workforce will help build a stronger tax base.” https://www.pwc.com/gx/en/ services/tax/publications/upskilled-workforce-help-build-stronger-tax-base.html
36 Tandem Research. “Can digital technologies contribute to gender equality?” 7 January 2020, https://tandemresearch.org/publications/can-digital-technologies-contribute-to-gender-equality
37 PMKVY Guidelines (2016-2020). http://pmkvyofficial.org/App_Documents/News/PMKVY%20Guidelines%20 (2016-2020).pdf
Recoupling shareholders, stakeholders and society
Bhushan Sethi, Joint Global Leader, People & Organisation, PwC US
Chaitali Mukherjee, Lead Partner, People & Organisation, PwC India
Ingrid Carlson, Global Strategy & Leadership, Director, PwC US