WEBVTT - How Covid-19 Is Helping Robots Take Your Job

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<v Speaker 1>Hello, and welcome to Stephanomics, the podcast that brings the

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<v Speaker 1>global economy to you. This week, we're thinking about jobs, machines,

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<v Speaker 1>and COVID nineteen. At the start of this pandemic, a

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<v Speaker 1>lot of people decided globalization was dead, the companies would

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<v Speaker 1>pull their factories out of China and supply chains would shrink.

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<v Speaker 1>By and large companies haven't done that, but COVID nineteen

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<v Speaker 1>does seem to have brought forward the day when an

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<v Speaker 1>awful lot of the jobs we see around us are

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<v Speaker 1>done by a machine. In a few minutes, I'll be

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<v Speaker 1>talking about what the future holds with Harvard Economics chair

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<v Speaker 1>and deep thinker about all things labor related Richard Freeman.

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<v Speaker 1>Our chief European economist, Jamie Rush is also going to

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<v Speaker 1>explain why the answer to the biggest question in the

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<v Speaker 1>global economy right now is three point two trillion dollars.

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<v Speaker 1>I'll leave you to work out with the questions, but

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<v Speaker 1>first here's u s A economy reporter Olivia Rockman on

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<v Speaker 1>the truth about robots and jobs in the year of

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<v Speaker 1>COVID nineteen. Adding more robots to factories, retail stores, or

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<v Speaker 1>mines was historically seen as a job killer by workers

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<v Speaker 1>and the unions that support them. But this year, automation

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<v Speaker 1>has allowed sectors of the economy to continue producing with

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<v Speaker 1>fewer people or without any at all, minimizing the coronavirus

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<v Speaker 1>risk for workers. Unions have recognized that automation will continue

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<v Speaker 1>to accelerate to avoid massive outbreaks like the ones seen

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<v Speaker 1>in US meatpacking plants earlier this year. But while they're

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<v Speaker 1>all for protecting workers, their concern is widespread and permanent

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<v Speaker 1>job loss. In many cases, once a company invests the

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<v Speaker 1>cash to implement automation, it's unlikely that they'll take their

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<v Speaker 1>workers back. A highway in Pennsylvania cut five toll worker

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<v Speaker 1>jobs earlier this year after putting an electronic system into place,

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<v Speaker 1>and it doesn't plan to bring any of the employees back.

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<v Speaker 1>Marcus Casey, an economist at the University of Illinois at Chicago,

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<v Speaker 1>spoke with me about how eliminating jobs can exacerbate inequality

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<v Speaker 1>those workers aren't taught new skills. High skill jobs that

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<v Speaker 1>require creative or human touch, so to speak, will remain

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<v Speaker 1>um even in cases where pay is not necessarily much higher.

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<v Speaker 1>For example, skill workers say professors like myself may see

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<v Speaker 1>our pay is relatively flat in the future, However, among

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<v Speaker 1>people who aren't necessarily as skilled, because there will be

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<v Speaker 1>fewer jobs, you might see pay actually decrease because of

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<v Speaker 1>increased competition in those sectors. One solution to the inequality

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<v Speaker 1>problem is increased investment in reskilling, which can help factory

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<v Speaker 1>workers transition into jobs in healthcare, for example, where automation

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<v Speaker 1>is more difficult to implement. That's US President electro Biden's

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<v Speaker 1>plan ensure that employers give workers impacted by automation advanced

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<v Speaker 1>notice and put them at the front of the line

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<v Speaker 1>for new jobs, as well as paid skills training. Currently,

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<v Speaker 1>though the United States, Chile, and Mexico spend the least

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<v Speaker 1>among O E c D countries on policies intended to

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<v Speaker 1>improve job readiness and expand employment. That isn't likely to

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<v Speaker 1>change quickly because health concerns are coming first, and Casey

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<v Speaker 1>says there will be consequences. We already have a long

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<v Speaker 1>term problem with people who are prime age and not working.

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<v Speaker 1>Our employment to population ratio has been declining for many decades,

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<v Speaker 1>and supposed in the future we go from a situation

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<v Speaker 1>where we have a sixty seven or sixty eight percent

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<v Speaker 1>employment of population rate to maybe a fifty employment to

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<v Speaker 1>population rate. Many of those people are young, prime age malls,

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<v Speaker 1>and our social insurance programs tend to direct money away

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<v Speaker 1>from that population. So I'm delighted now to be able

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<v Speaker 1>to talk to Richard Freeman. Herbert Asherman, share of economics

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<v Speaker 1>at Harvard, taught me a lot about labor markets quite

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<v Speaker 1>a long time ago. Richard, thanks for coming on Stephanomics.

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<v Speaker 1>We're talking this week about the impact that COVID nineteen

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<v Speaker 1>has had on workers in the US and Europe, and

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<v Speaker 1>also how fits into the longer term structural changes in

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<v Speaker 1>the labor market that you've spent a lot of your

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<v Speaker 1>life thinking about and studying. And one thing that's come

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<v Speaker 1>up a lot is the unequal way that this pandemic

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<v Speaker 1>has hit society's and households, with poorer people much more

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<v Speaker 1>likely to get sick and more likely to lose their jobs.

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<v Speaker 1>But we also know that fiscal stimulus, certainly in the US,

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<v Speaker 1>actually increased the disposable income of many lower wage Americans

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<v Speaker 1>in twenty and I think you've also had many parts

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<v Speaker 1>of the world are kind of out break of social

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<v Speaker 1>solidarity in many places, and maybe a new appreciation of

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<v Speaker 1>the value of people in some of these low page

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<v Speaker 1>jobs that we reminded are so important for keeping the

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<v Speaker 1>country going. So when you look back at do you

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<v Speaker 1>think it's going to mark a break with some of

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<v Speaker 1>those long term trends for labor or or more an acceleration.

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<v Speaker 1>My guess is it will more accelerate things because the

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<v Speaker 1>good outcomes that we had on the particularly through our

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<v Speaker 1>almost unanimous Cares Act that really provided the people lost

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<v Speaker 1>their jobs and the low income people are at least

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<v Speaker 1>you know, financial protection. That was a one time thing.

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<v Speaker 1>We may next few days plays something else, but that

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<v Speaker 1>will also be a short term policy. The longer term

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<v Speaker 1>thing is that we've created two different kinds of workers,

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<v Speaker 1>those who work at home using computer technologies and those

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<v Speaker 1>who work interacting with other humans and dangerous settings. And

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<v Speaker 1>so I think the real push is going to be

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<v Speaker 1>to automate more of those jobs and um to do

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<v Speaker 1>more work at home phenomenon um. And that's that benefits

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<v Speaker 1>one group of people, managers, professionals, and that harms another

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<v Speaker 1>group of people, the people we were told next years ago,

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<v Speaker 1>not not so long ago, where the we're going to

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<v Speaker 1>be the heart of the new economy wasn't gonna be,

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<v Speaker 1>you know, guys working in big factories. It was going

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<v Speaker 1>to be all the people who interact with other humans.

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<v Speaker 1>If this COVID is a one off and we don't

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<v Speaker 1>see another another five six years, you know, maybe we'll

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<v Speaker 1>we'll just go back to a more normal phenomenon. But

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<v Speaker 1>there's a certainly a chunk of thinking in the scientific

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<v Speaker 1>community that this is just the first pandemic that we're

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<v Speaker 1>going to say, and they're more coming down the line.

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<v Speaker 1>We're entering an age of pandemics, that this is not

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<v Speaker 1>the first one that's gonna jump um, and the climate

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<v Speaker 1>change is gonna add more to this. So if if

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<v Speaker 1>this is a turning point, it's going to be a

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<v Speaker 1>turning point changing work and I think speeding up automation

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<v Speaker 1>and creating more problems for the lower skill people. Just

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<v Speaker 1>to dig into that a bit, because then obviously is

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<v Speaker 1>quite a lot of debate and pre dates COVID about

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<v Speaker 1>the impact that the next wave of automation and artificial

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<v Speaker 1>intelligence could have on on inequality and on and on jobs.

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<v Speaker 1>And there is an argument that says, actually, this next

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<v Speaker 1>wave is going to be kind of different, and that

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<v Speaker 1>the jobs that we see were being replaced a kind

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<v Speaker 1>of accountants quite high skilled workers UM that have done

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<v Speaker 1>well in the previous few decades, the middle middle manager

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<v Speaker 1>types potentially UM. And you might argue, I mean, if

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<v Speaker 1>we don't live permanently in pandemic, you know, those kind

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<v Speaker 1>of person to person to job jobs, hairdressing, all those things,

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<v Speaker 1>I mean, they hadn't they didn't go away in the pandemic,

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<v Speaker 1>and we're all trying to go back to our addresses

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<v Speaker 1>when we can. So I wonder whether that we're whether

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<v Speaker 1>you're exaggerating the impact of of COVID and not seeing

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<v Speaker 1>potentially the other side of this automation, which does seem

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<v Speaker 1>to have accelerated. Yeah. I've been sympathetic to the view

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<v Speaker 1>that the more skilled people would be replaceable by really

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<v Speaker 1>smart AI UM. But so far the evidence is that

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<v Speaker 1>that hasn't happened. And all the AI experts told us

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<v Speaker 1>accounting is gonna just die off, and in fact, the

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<v Speaker 1>accountants keep increasing, and of course the accountant profession gets

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<v Speaker 1>more computerized and people learn more skills. Yeah, it's hard,

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<v Speaker 1>too hard for me to now see that those are

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<v Speaker 1>the people who are going to be threatened as opposed

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<v Speaker 1>to the clerks in the stores. UM. And and if

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<v Speaker 1>we want to go to a store. I suppose I'd

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<v Speaker 1>rather see a robot. It's safer for me as a

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<v Speaker 1>consumer to deal with the robot that can't carry the disease.

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<v Speaker 1>There was an old challenge that on the one hand,

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<v Speaker 1>we've talked a lot about the risk of automation and

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<v Speaker 1>the likelihood the automation is going to take jobs, at

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<v Speaker 1>least in the chunk of the workforce, and yet we

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<v Speaker 1>have this problem, ongoing problem, a very low labor productivity

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<v Speaker 1>relative to the past. So what's the answer to that,

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<v Speaker 1>Because on the face of it, it does seem a

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<v Speaker 1>conundrum that we're that the automation could be destroying jobs

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<v Speaker 1>but somehow not increasing our productivity the amount that we

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<v Speaker 1>can make per person. Yeah. Well than some of that

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<v Speaker 1>has to do with the sectors. Almost the ast bulk

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<v Speaker 1>of the first automation things have have been factories, and

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<v Speaker 1>productivity there has done reasonably well. So it's been in

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<v Speaker 1>the in the server sectors where it's been slower, and

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<v Speaker 1>that's where the workforce is shifted. Two. If we begin

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<v Speaker 1>to see more automation in the service sectors, we will

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<v Speaker 1>see productivity go up and there will be job problems

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<v Speaker 1>and the wages would go up in some of these

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<v Speaker 1>service sector jobs. The few that are left wages, so

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<v Speaker 1>at least we will have wage growth if even if

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<v Speaker 1>we've lost the jobs. No, No, correctly, So I I

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<v Speaker 1>don't think if if we have a reasonably well organized economy,

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<v Speaker 1>that we're going to see mass unemployment. These these things

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<v Speaker 1>eight million, hundred million jobs disappearing, and depending on which

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<v Speaker 1>country there or which area of the world they're talking about,

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<v Speaker 1>I mean that what should happen is the workers will

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<v Speaker 1>find some other jobs, and those that that will put

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<v Speaker 1>downward pressure in those labor markets. And so I think

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<v Speaker 1>the actual our concern should be much more what is

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<v Speaker 1>automation going to do to the structure of wages? And

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<v Speaker 1>that gets back to your earlier thing. Is it gonna

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<v Speaker 1>harm the wages and the accountants and the managers or

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<v Speaker 1>is it going to harm the wages of the clerks

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<v Speaker 1>in the Your restaurant then has no waiters or waitresses,

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<v Speaker 1>but just buttons. You have been in one in China

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<v Speaker 1>where you just pushiate buttons. I assume there are a lot,

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<v Speaker 1>must be more in Japan and Okay, then there's you

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<v Speaker 1>feel safer, um, you etcetera, and um and it's more

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<v Speaker 1>maybe it's more efficient, it's as well. And if that's

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<v Speaker 1>going to be the way of the world, then where

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<v Speaker 1>are the people who would have held those jobs going

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<v Speaker 1>to go? We we just said we have to worry

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<v Speaker 1>about them. I think, um, I would not. I would

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<v Speaker 1>not trust natural forces teaching your automation to take care

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<v Speaker 1>of the poorer and less skilled people. I think that's

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<v Speaker 1>something we as societies have to deal with. So at

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<v Speaker 1>one point you made them over the years, which I

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<v Speaker 1>think is probably more much more accepted now that when

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<v Speaker 1>you were first teaching me about it in the the Deities.

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<v Speaker 1>Is the power of institutional change and the institutions rules,

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<v Speaker 1>social morays, and how they have affected what happens to

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<v Speaker 1>workers in the labor market, what happens to wages. You

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<v Speaker 1>know that it's not just these aren't unstoppable forces that

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<v Speaker 1>we can do nothing to control. We have a new

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<v Speaker 1>administration in the US. Given what you know, you know,

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<v Speaker 1>what could the Biden administration do to improve the outcomes

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<v Speaker 1>for labor in the next few years. I'll take three

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<v Speaker 1>things are one, Biden is incredibly committed to trade union reforms,

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<v Speaker 1>So he is I've never seen a president speaks so strongly,

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<v Speaker 1>and sometimes it seems like a voice from the past.

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<v Speaker 1>Sometimes a voice from the past. He was around in

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<v Speaker 1>the past too, We know that. So so he said

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<v Speaker 1>g F. D. R said that Americans encourage unions, and

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<v Speaker 1>that's what I'm gonna do, um and UM. And so

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<v Speaker 1>he has a there is a pretty wealth set out plan.

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<v Speaker 1>I don't know if they can get it through the

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<v Speaker 1>Congress that would indeed strengthen that, but they're certainly gonna try.

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<v Speaker 1>The second area that I think they will move is

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<v Speaker 1>in the occupational health and safety area, the ocean, which

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<v Speaker 1>should have stepped forward in the pandemic as a major

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<v Speaker 1>force making sure workers are protected. In the US current

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<v Speaker 1>debate or is where the Republicans want to give employers

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<v Speaker 1>who bring workers back to unsafe workplaces UM protection against

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<v Speaker 1>legal suits for you brought me back to an unsafe

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<v Speaker 1>workplace and that that's that that's insane, it's some level

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<v Speaker 1>UM and it will just cause more to disaster for everybody.

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<v Speaker 1>And so I think there'll be a big push on

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<v Speaker 1>the ocean. And we should be doing obviously more R

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<v Speaker 1>and D and how can we protect workers in workplaces? UM,

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<v Speaker 1>that would be a more natural thing to do the

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<v Speaker 1>third area that that that they that they will push

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<v Speaker 1>something with training people for the new technologies. And so

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<v Speaker 1>there's a there's a big move inside the parts of

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<v Speaker 1>the U. S. Government that they need really major uh

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<v Speaker 1>changes in training. Um. I think the administration will will

0:15:41.200 --> 0:15:44.480
<v Speaker 1>love this when it when they see what it's being planned.

0:15:45.560 --> 0:15:49.440
<v Speaker 1>So so they'll they'll be those those uh, those friends.

0:15:49.480 --> 0:15:53.920
<v Speaker 1>But there have to be major tax changes as well. Um.

0:15:54.000 --> 0:15:58.120
<v Speaker 1>And how the Biden administration will will be able to

0:15:58.160 --> 0:16:01.920
<v Speaker 1>reduce the tax cut given to the billionaires and their

0:16:01.960 --> 0:16:07.760
<v Speaker 1>friends and do something more for ordinary citizens. We'll see.

0:16:08.320 --> 0:16:19.320
<v Speaker 1>Richard Freeman, thank you very much. Okay, thank you. Now,

0:16:19.960 --> 0:16:22.840
<v Speaker 1>what value would you put on the ability to lead

0:16:22.880 --> 0:16:25.760
<v Speaker 1>a normal life? While you might say it's priceless, but

0:16:25.920 --> 0:16:29.360
<v Speaker 1>Bloomberg economists say it's three trillion dollars. That's the net

0:16:29.360 --> 0:16:32.720
<v Speaker 1>benefit to the global economy of countries with vaccination programs

0:16:32.720 --> 0:16:35.800
<v Speaker 1>for COVID nineteen being able to get back to normal

0:16:36.120 --> 0:16:40.400
<v Speaker 1>in That analysis was carried out by Chief of Mere

0:16:40.480 --> 0:16:44.520
<v Speaker 1>economist Jamie rush Our, Chief Asia economists Chang Shu, and

0:16:44.680 --> 0:16:48.240
<v Speaker 1>senior global economist Beyond Van Roy and Jamie rush Is

0:16:48.600 --> 0:16:52.960
<v Speaker 1>with me. Now. Jamie briefly how did you come up

0:16:52.960 --> 0:16:56.440
<v Speaker 1>with this number just over three trillion dollars. So we

0:16:56.480 --> 0:16:58.720
<v Speaker 1>thought of it as a bounding exercise. We asked ourselves,

0:16:58.760 --> 0:17:00.840
<v Speaker 1>and what's the best that it be possible for these

0:17:00.840 --> 0:17:04.960
<v Speaker 1>economies of everything just happens to go just right. And

0:17:05.000 --> 0:17:07.080
<v Speaker 1>so the way we approached it is we divided the

0:17:07.119 --> 0:17:10.479
<v Speaker 1>world into three groups of countries. We thought that there

0:17:10.480 --> 0:17:12.680
<v Speaker 1>are some that have got a chance perhaps of achieving

0:17:12.720 --> 0:17:15.800
<v Speaker 1>herd immunity, some that would only be able to vaccinate

0:17:15.800 --> 0:17:19.720
<v Speaker 1>the vulnerable populations, and some who probably even struggle to

0:17:19.720 --> 0:17:22.480
<v Speaker 1>do that. So it's that first group of countries that

0:17:22.480 --> 0:17:25.960
<v Speaker 1>has the best chance of getting back to normal. There'll

0:17:26.000 --> 0:17:29.840
<v Speaker 1>still be cases in those countries, but widespread transmissions pretty unlikely.

0:17:30.400 --> 0:17:34.840
<v Speaker 1>That means very low fatalities, very low personal and societal risks.

0:17:34.920 --> 0:17:36.840
<v Speaker 1>So it's these countries which have a good chance of

0:17:36.880 --> 0:17:39.879
<v Speaker 1>getting back to normal um. So what we did to

0:17:40.119 --> 0:17:41.680
<v Speaker 1>work out of your countries in this group is we

0:17:41.800 --> 0:17:44.119
<v Speaker 1>just compare the number of those is that are on

0:17:44.320 --> 0:17:48.560
<v Speaker 1>order with the size of the population um and we

0:17:48.640 --> 0:17:53.320
<v Speaker 1>found that about sixteen major economies are able to do that,

0:17:53.400 --> 0:17:56.560
<v Speaker 1>and they're accounting for about half of world GDP and

0:17:56.600 --> 0:17:59.760
<v Speaker 1>a third of the population, so thinking that what's the

0:17:59.800 --> 0:18:02.040
<v Speaker 1>best that's possible for them, or maybe they can get

0:18:02.080 --> 0:18:05.320
<v Speaker 1>back to their pre crisis trend, just maybe. So we

0:18:05.440 --> 0:18:08.359
<v Speaker 1>estimate that in four Q and taking into account the

0:18:08.400 --> 0:18:12.200
<v Speaker 1>impact of fresh lockdowns that the last the last three

0:18:12.200 --> 0:18:14.680
<v Speaker 1>months of this, that's right, yep, the last few months.

0:18:14.680 --> 0:18:17.359
<v Speaker 1>We were looking at those and we think that on

0:18:17.400 --> 0:18:21.960
<v Speaker 1>average those sixteen economies are about six percent below their

0:18:22.000 --> 0:18:25.440
<v Speaker 1>pre crisis trend level of output. So if you're able

0:18:25.480 --> 0:18:28.560
<v Speaker 1>to vaccinate a very substantial portion of the population in

0:18:28.600 --> 0:18:31.480
<v Speaker 1>those countries, then maybe if everything goes right, you could

0:18:31.520 --> 0:18:35.680
<v Speaker 1>get back to that trend level. So six pc increase

0:18:35.720 --> 0:18:38.560
<v Speaker 1>in GDP, which is about three point two percent of

0:18:38.640 --> 0:18:43.080
<v Speaker 1>world GDP. In that second group with countries but just

0:18:43.160 --> 0:18:46.040
<v Speaker 1>able to vaccinate the vulnerable populations. We think there are

0:18:46.040 --> 0:18:49.119
<v Speaker 1>about eleven major economies and these are mostly emerging market

0:18:49.119 --> 0:18:51.960
<v Speaker 1>economies and they don't make up a huge amount of

0:18:51.960 --> 0:18:55.320
<v Speaker 1>world GDP. But we think that vaccinations in the vulnerable

0:18:55.400 --> 0:18:58.359
<v Speaker 1>could have a very big impact on the economy because

0:18:58.359 --> 0:19:01.720
<v Speaker 1>if you think of it, it will very significantly reduced fatalities,

0:19:01.960 --> 0:19:06.480
<v Speaker 1>so intensive care beds won't be overburdened the risk of

0:19:06.560 --> 0:19:10.080
<v Speaker 1>death most people will be very low, and so you

0:19:10.080 --> 0:19:12.480
<v Speaker 1>should still see a very meaningful boost in g d P.

0:19:13.000 --> 0:19:14.760
<v Speaker 1>But because these economies that are in this group a

0:19:14.840 --> 0:19:18.080
<v Speaker 1>bit smaller, you only add an extra half percent to

0:19:18.200 --> 0:19:20.760
<v Speaker 1>world GDP. And and so it's those two groups that

0:19:20.760 --> 0:19:23.800
<v Speaker 1>account for the three trillion dollar boost. I mean, I

0:19:23.840 --> 0:19:26.520
<v Speaker 1>understand these are just kind of broad magnitudes. We're not

0:19:26.600 --> 0:19:30.720
<v Speaker 1>we're not saying that these exact numbers. But is there

0:19:30.800 --> 0:19:33.399
<v Speaker 1>are you making an allowance here for the impact on

0:19:33.640 --> 0:19:35.679
<v Speaker 1>of of lockdowns? I mean, is the assumption that you're

0:19:35.720 --> 0:19:38.240
<v Speaker 1>saying that there will be no further lockdowns whereas there

0:19:38.320 --> 0:19:41.440
<v Speaker 1>might have been lockdown what's the what's the assumption there?

0:19:41.480 --> 0:19:43.960
<v Speaker 1>As the base case we've we've just assumed that the

0:19:44.000 --> 0:19:48.600
<v Speaker 1>lockdowns are in place now, stay in place until until

0:19:48.680 --> 0:19:52.280
<v Speaker 1>the spring um and then the vaccine gradually allows these

0:19:52.280 --> 0:19:55.719
<v Speaker 1>to unwind. But it means that the countries that will

0:19:55.760 --> 0:19:57.800
<v Speaker 1>get the biggest boost in the vaccine will obviously be

0:19:57.880 --> 0:20:00.320
<v Speaker 1>the ones that have got the tightest lockdown condition or

0:20:00.359 --> 0:20:02.520
<v Speaker 1>the lowest levels of g d P, So like the

0:20:02.640 --> 0:20:05.880
<v Speaker 1>UK calls into that category, Spain as well, where there's

0:20:05.920 --> 0:20:09.480
<v Speaker 1>really a lot of scope for improvement if they can

0:20:09.520 --> 0:20:12.080
<v Speaker 1>they can they can move past the crisis phase of

0:20:12.119 --> 0:20:16.800
<v Speaker 1>the pandemic and what you say the UK, of course

0:20:17.240 --> 0:20:19.000
<v Speaker 1>this is to throw something else in the mix. But

0:20:19.160 --> 0:20:21.200
<v Speaker 1>of course the UK in those three months is also

0:20:21.320 --> 0:20:23.560
<v Speaker 1>going to be going through the sort of the final

0:20:23.680 --> 0:20:26.240
<v Speaker 1>stage of Brexit, is actually not going out of the

0:20:26.280 --> 0:20:30.640
<v Speaker 1>sort of transition period of Brexit where we were still

0:20:30.680 --> 0:20:34.600
<v Speaker 1>following all the European rules. You spend you spent quite

0:20:34.600 --> 0:20:36.240
<v Speaker 1>a lot of time thinking about what's going to happen

0:20:36.280 --> 0:20:38.760
<v Speaker 1>to the UK next year. Do you think we're going

0:20:38.800 --> 0:20:40.760
<v Speaker 1>to be able to see the effect of Brexit in

0:20:40.800 --> 0:20:42.760
<v Speaker 1>the numbers or is it just going to be crowded

0:20:42.760 --> 0:20:45.840
<v Speaker 1>out by this big boost from vaccinations and the bounce

0:20:45.880 --> 0:20:48.159
<v Speaker 1>back of the economy generally as you come out of

0:20:48.200 --> 0:20:51.280
<v Speaker 1>the pandemic. Well, I think if there is an impact

0:20:51.280 --> 0:20:54.600
<v Speaker 1>from Brexit, it's likely to happen just before there's a

0:20:54.600 --> 0:20:56.879
<v Speaker 1>boost from the pandemic, So you probably would see in

0:20:56.920 --> 0:20:58.840
<v Speaker 1>the numbers because it would happen in the first quarter

0:20:58.880 --> 0:21:02.080
<v Speaker 1>of this year. Um. And it's I don't think it's

0:21:02.119 --> 0:21:04.600
<v Speaker 1>that likely that that would be a huge proportion of

0:21:04.600 --> 0:21:08.560
<v Speaker 1>the population vaccinated by the end of them. Um. I

0:21:08.600 --> 0:21:10.560
<v Speaker 1>mean I guess that the interesting thing about Brexit is

0:21:10.600 --> 0:21:12.320
<v Speaker 1>that some of the policies that are in place to

0:21:12.359 --> 0:21:14.960
<v Speaker 1>deal with COVID are also going to work pretty well

0:21:15.080 --> 0:21:18.959
<v Speaker 1>for the Brexit shock, because both COVID and Brexit disruption

0:21:19.000 --> 0:21:23.040
<v Speaker 1>would be a pretty similar, uh supply side disruption to

0:21:23.080 --> 0:21:26.639
<v Speaker 1>the economy, something that's hopefully temporary that would eventually go away,

0:21:26.880 --> 0:21:30.560
<v Speaker 1>and so it calls for the same sort of policy settings.

0:21:30.680 --> 0:21:33.280
<v Speaker 1>So in the UK we have a large furlough scheme

0:21:33.400 --> 0:21:36.480
<v Speaker 1>to protect workers protect jobs that would work if there's

0:21:36.520 --> 0:21:39.600
<v Speaker 1>disruption for Brexit or if there's continued disruption for COVID.

0:21:39.640 --> 0:21:42.680
<v Speaker 1>So in some ways it's it's helpful those those policies

0:21:42.680 --> 0:21:47.000
<v Speaker 1>already in place. Um, when you think about what your

0:21:47.040 --> 0:21:51.200
<v Speaker 1>sort of base cases for next year, how much is

0:21:51.600 --> 0:21:55.639
<v Speaker 1>how much does the pace of vaccination affect where the

0:21:55.640 --> 0:21:58.400
<v Speaker 1>global economy ends up at the end of next year

0:21:58.680 --> 0:22:01.200
<v Speaker 1>relative to where it might have been. No, I think

0:22:01.240 --> 0:22:04.880
<v Speaker 1>I think the realistic base cases that a portion of

0:22:04.920 --> 0:22:09.119
<v Speaker 1>the population is vaccinated in advanced economies, and because it

0:22:09.160 --> 0:22:12.800
<v Speaker 1>starts with the vulnerable groups, that that reduces fatalities quite

0:22:12.800 --> 0:22:15.920
<v Speaker 1>substantially and allows people to go start living their lives

0:22:15.920 --> 0:22:18.399
<v Speaker 1>a bit more normally. I mean, the big unknown is

0:22:18.440 --> 0:22:20.920
<v Speaker 1>how the people that aren't in the vulnerable groups will

0:22:21.000 --> 0:22:25.800
<v Speaker 1>behave once the vulnerable people are vaccinated. That's the that

0:22:25.920 --> 0:22:30.120
<v Speaker 1>could be like the huge upside surprise to activity next year,

0:22:30.320 --> 0:22:32.320
<v Speaker 1>where it could just be a massive dempscaph and everyone

0:22:32.359 --> 0:22:34.639
<v Speaker 1>just stays and stikes are still scared. It's perfectly possibly

0:22:34.640 --> 0:22:36.960
<v Speaker 1>it goes either way. So I think that it's it's

0:22:37.080 --> 0:22:39.520
<v Speaker 1>um it's not a question even it's not a question

0:22:39.560 --> 0:22:43.320
<v Speaker 1>of the medicine. It's not even a question of kind

0:22:43.320 --> 0:22:46.560
<v Speaker 1>of the standard economics. It's a a what are people's

0:22:46.560 --> 0:22:48.920
<v Speaker 1>behavior response going to be to this? And to be honest,

0:22:48.960 --> 0:22:52.280
<v Speaker 1>we just don't know. I have to say anecdotally, my

0:22:52.359 --> 0:22:54.760
<v Speaker 1>sense is that people are dying to go on lots

0:22:54.800 --> 0:22:57.800
<v Speaker 1>of holidays to extend that they can and go and

0:22:58.320 --> 0:23:00.879
<v Speaker 1>restaurants and other things. Now, how long that will last?

0:23:01.600 --> 0:23:04.359
<v Speaker 1>I think, isn't it? Because if you think back, if

0:23:04.400 --> 0:23:06.479
<v Speaker 1>you think back to the summer, I mean, people were

0:23:06.480 --> 0:23:09.399
<v Speaker 1>clamoring to get out and go to restaurants, fly, go home.

0:23:09.400 --> 0:23:11.160
<v Speaker 1>And it's one of the reasons why the economy picked

0:23:11.240 --> 0:23:14.080
<v Speaker 1>up so fast over that period is that people were

0:23:14.119 --> 0:23:16.880
<v Speaker 1>willing to do things even though that risk still existed,

0:23:17.000 --> 0:23:20.359
<v Speaker 1>so I'm fairly optimistic that's something something will be a

0:23:20.400 --> 0:23:24.440
<v Speaker 1>fairly major boost as vaccines wrong. Now, Jamie Rush, thank

0:23:24.480 --> 0:23:32.840
<v Speaker 1>you very much, thanks for listening to Stephonomics. We'll be

0:23:32.840 --> 0:23:36.080
<v Speaker 1>back next week with more on all things economic. Remember

0:23:36.119 --> 0:23:38.919
<v Speaker 1>you can always find us on the Bloomberg Terminal, website,

0:23:39.000 --> 0:23:41.639
<v Speaker 1>app or wherever you get your podcasts, and you can

0:23:41.680 --> 0:23:44.680
<v Speaker 1>get a lot of news and analysis from Bloomberg Economics

0:23:44.760 --> 0:23:48.760
<v Speaker 1>during the week by following at Economics on Twitter. This

0:23:48.800 --> 0:23:51.720
<v Speaker 1>episode was produced by Magnus Henrison, with special thanks to

0:23:51.760 --> 0:23:56.159
<v Speaker 1>Olivia Rockman, Richard Freeman, Chang Shue, Beyond, Van Roy, and

0:23:56.280 --> 0:24:00.000
<v Speaker 1>Jamie Rush. Lucy Meekin is the executive producer of Stephonomics.

0:24:00.040 --> 0:24:14.560
<v Speaker 1>Send ahead of Blimpberg podcast Beast Francesco mm hm hm