Economic Commentary: Worker Retraining, India's Second Wave, Evidence of Recovery


  • The Training Imperative
  • India: The COVID-19 Déjà vu
  • Springing into Reopening

My first job after college was in the planning department of a major retailer. When I needed data to assemble a sales forecast, I was told to inquire with the accounting department. Entering the area was like passing through a time warp: rows and rows of people sitting at desks, smoking and making entries in huge ledger books. It took days, and half of my lung capacity, to assemble sufficient history.

By the time I left two years later, that room was empty. A computer-driven general ledger had been introduced; the number of bookkeepers had been drastically reduced, and the nature of work for those that remained had dramatically changed. I could write queries on a computer terminal that would harvest information almost instantly, saving me time and allowing a little more breathing room.

I often wondered where all of the accountants had gone. Some retired; back in those days, pensions were generous and fully funded. But others learned how to use spreadsheets and became financial analysts. That kind of transition happens frequently as work evolves; adjusting successfully is critical to economic performance.

Labor markets were struggling to keep pace with change before the pandemic, and change is likely to accelerate as the pandemic passes. Questions about how our economy can adapt, and who should pay for it, have moved front and center.

Pre-industrial economies functioned on basic skills. While there were a handful of experts in agriculture, navigation, metallurgy and other disciplines, the vast majority of workers performed physical tasks that required little training. Workers left the workforce when they were too old or infirm to keep up with the work; retirement was not a common practice, with the end of natural and working lifetimes closely associated.

Physical, repetitive labor has long been vulnerable to obsolescence at the hands of technology. But in the past two decades, a broadening range of service occupations have also been affected. Studies have shown that components of service jobs, and even the jobs themselves, are being automated at an accelerating rate. Mismatches of skills between workers and open positions have been proliferating.