Economic Impact of COVID-19 Outbreak
The COVID-19 outbreak, which emerged in China in December 2019 and spread globally in a very short time, has become the world’s most important agenda item due to its medical, economic and social effects.
In fact, this pandemic has introduced bans, restrictions and new regulations all over the world in many areas from education to health, from economy to social life. The impact on employment of the outbreak whose economic, political and social consequences are discussed to be too large to be compared with previous outbreaks, may be the most striking issue during the peak periods of the pandemic. Within the scope of the measures taken in this process, many workplaces were closed, and many continued their activities with limited production opportunities. The importance of the issue is quite apparent at this point. While some of the institutions or organizations that continue their activities digitally (such as online trade websites, banks, retail sector, technology sector, e-government and many public institutions serving on the Internet) have made a significant growth compared to the pre-pandemic period, there are also companies continue to operate at the same or lower capacity than the pre-pandemic period. The reflection of this situation in the economy has gradually emerged with the end of the first quarter of 2020. As a matter of fact, the USA, which leads the countries most affected by the pandemic, and Italy experienced an economic contraction of 4.8% and 4.7%, respectively, in the first quarter of 2020 (OECD 2020).Another macroeconomic indicator through which the impact of COVID-19 outbreak is felt significantly in the world economies is unemployment. Employees in sectors that experienced moderate and high levels of decline in production levels due to the pandemic took unpaid leave or lost their jobs. Although employers were supported to stop layoffs in many countries of the world with the economy recovery packages, unpaid leaves and layoffs could not be prevented at the desired level.
Unregistered workers, which are common especially in developing countries, are the employees most affected by the pandemic (Kara 2020: 272). Another group most affected has been the “Gig”[14] economy, which includes short-term jobs created by the increase in freelance opportunities and available through digital platforms. In this economy, which covers short-term and project-based jobs such as freelance photography, caregiving and house cleaning, the number of employees in the USA reached 55 million in 2018 (ILO 2018). In the study conducted on the pandemic, it was revealed that more than half of the workers (52%) in the global gig economy lost their jobs and 26% started to work for a shorter time (Kara 2020: 273).The COVID-19 outbreak, which brought many innovations to our social life, also brought innovations to business life. As a matter of fact, many private and public institutions have made it compulsory to work from home in order to maintain social distance and prevent people from coming together and creating a crowded environment. Before the pandemic, the number of people working from home was quite low in the world economy, in countries other than Denmark, Sweden and Norway. In fact, according to the research conducted in OECD countries in 2015, the rate of those who work from home at least once a year is 20%, while the rate of those who work from home at least once a month is only 5% (OECD 2016: 6). In the USA, this rate is 24.8% for 2017 and 2018 (U.S. Bureau of Labor Statistics 2020). However, with the measures taken during the pandemic, there has been a significant increase in the number of people working from home. The rate of working from home rose to 39% in March and April 2020, when the effects of the crisis were the highest in the USA. Considering that not all professions and jobs are suitable for working from home, the increase in this ratio becomes even more meaningful. Finance, insurance, education, scientific and technical services, and company and
Table 9.1 Impact of
COVID-19 Outbreak on
Sectors
| Sectors | Level of Impact |
| Accommodation and Food | High |
| Production | High |
| Wholesale and retail trade | High |
| Art-Sports-Entertainment and other services | Medium-High |
| Transport and Communication | Medium-High |
| Construction | Medium |
| Finance and insurance services | Medium |
| Agriculture and forestry | Low-Medium |
| Education | Low |
| Human health and social security services | Low |
Source ILO Monitor: COVID-19 and the World of the work
business management have been the most suitable working areas for working from home.
Transportation, construction, agriculture and forestry are among the jobs that are not suitable for working from home (Kara 2020: 275). Table 9.1 is created using the report prepared by the International Labour Organization on the exposure levels of the production activities of the sectors during the COVID-19 outbreak.As shown in Table 9.1, sectors that require human labour such as accommodation and food sector wholesale and retail trade have been the sectors most affected by the crisis. Sectors such as arts-entertainment-sports and transportation that bring people together and provide services that people can benefit from in large groups are among the sectors most affected by the crisis. Sectors such as the banking and finance sector and the education sector that can continue their activities through digital channels were among the least affected by this crisis. The fact that they have digital service opportunities such as mobile banking, Internet banking and distance education that people can easily benefit from has contributed that. The digitalization in employment, the increase in robot employment and the fact that the sectors that are compatible with new service activities are much less affected by the crisis caused by the COVID- 19 outbreak will lead other sectors to prefer to be more compatible with these new service and production activities.
Digitalization and the increase in robot employment will change the perspective of sectors towards these production elements, perhaps in the period when similar epidemics are predicted every decade in the future (WEF 2019: 6), because today’s cloud data storage system, Internet speed and widespread network, Internet of Things, unmanned aerial vehicles, driverless private and public transport vehicles, 3D printers, the technology of humanoid robots and autonomous robots show that digitalization in employment and robot employment can be used much more widely in many more sectors. In the light of these predictions, new and modern policies should be followed in addition to traditional policies for unemployment or new employment order to be created by robots and digitalization.
As seen and happened in the COVID-19 outbreak, digitalization and robot employment continue to be actively used in various sectors. In fact, the pandemic has seriously increased robot employment. This increase in robot employment requires predicting the possible effects on the economy and making arrangements accordingly. In this context, it would be beneficial to address the robot tax issue, which was highly emphasized and discussed in 2017.
9.5