Please note that
- now of course, we need to survive physically at first;
- to feel at ease when we hear various economists’ opinions*;
- to proceed all the processes based on best-laid plans for the reallocation in a businesslike manner; and
- to rule out purely-political movements/wills, which could distort should-be results.
And I have no personal/emotional concrete preferences for the direction of the reallocation. Here I am just writing my thought or prospect. I would be really pleased if this article could be of some help when people think about the near future.
While we human beings are now struggling to conquer the Coronavirus and I strongly believe we must prioritize first health which is fundamental to our survival, here I would like to dig into the reallocation of labor — the changing structure of economy which is also the basis of our daily lives.
Now, in the U.S., U.K. and Germany, for example, not a few people are transferred to essential-goods sections in their companies or newly hired by essential-goods companies, and others are applying to unemployment insurance.** And we can imagine that people’s working from home clarifies what is needed for companies, and that further changes of labor structure will occur amid and even after the current crisis in order that companies are also doing and will do their best to survive.
In my opinion, the technical reason why the current change is occurring is that the human beings have already had necessary technologies such as the Internet and related logistics to enforce the structural change for years, and that we definitely need water, food, energy, sanitary goods, living environments, etc., every day as far as we will continue to be just a species of animals. This might mean industries will put more focus on such basic goods for a while even after this crisis. In fact, for example, structural shifts of employment had apparently been towards good-producing industries such as construction and durable-goods manufacturing and away from high-skill services such as finance, real estate, education, and professional services after the Lehman shock in 2007-08.***
In a sense, we could say that human beings have just waited for the timing of such structural shifts, because it must be very difficult to materialize them in peacetime. For example, workers rarely even accept — or perhaps employers rarely demand — reductions in their nominal wages within existing jobs.**** In order to enforce changes, people might need to play sterile power games where it is not be necessarily easy to clarify winners and losers in their companies, and where it is of course risky for attackers to start without urgent reasons. Imprudently saying, if I may, crises could be a good timing for them, because people cannot fight well.
The problem would be in what direction structural shifts of labor will go. This will eventually determine the shape of the whole economy, i.e. the whole human world where we will continue living peacefully. As far as I searched specialized papers and articles related to this topic on the Internet in English language and skimmed through them, I have not found exact answers even by great scholars. So here I would just like to personally say that any unbelievable structure must not come soon. It is logical that just innovative tools and related ideas and ways of thinking would prevail without resistance. And, for that, technological researches on information and communications, artificial intelligence, engineering, materials, medical equipment, pharmacy, biotechnology, agriculture, etc., related to the above essential goods, will become more and more important. For example, I would cite artificial intelligence, which can monitor food prices in such a current situation because price-gouging is likely to occur here and there. As I suggested a little as above, principles tend to apply more smoothly now, so software of artificial intelligence must also work more precisely.
Prominent economists have also said that existing unemployment represents mismatch which is not readily amenable to monetary policy, and that policy solutions would have to fall on the labor supply side.***** This means that in addition to job-skills training including research abilities, for example, mobility assistance could be helpful. I would say it had better be promoted by the government as habitually as well as financially, because it is important to get used to a new place in order to do good jobs. As far as I have seen mobility so far, people feel fine in general in the U.S., while such cases from non-Tokyo to non-Tokyo are actually not so common yet in Japan. I hope all the governments will lead this moving style. And, from the standpoint of mobility as well as employment, it is possible to say that public expenditure on roads, trains, airports, etc., would not be wrong.
Major premise of all the above is “While there is life, there is hope.” or “A living dog is better than a dead lion.”. Again, now all the people need to protect our own physical (and economic) health at first.
**** Ibid. p.19
***** Ibid. p.2