Member Article

Is Coronavirus the Great Leveller?

When the novel coronavirus first started spreading like wildfire, people called it the “great leveller”. No respecter of status or economic background, Covid-19 affected people at all strata, from housemaids to Hollywood royalty; peons to prime ministers. Tom Hanks, Boris Johnson and an aide to US Vice President Mike Pence all contracted it.

Even more upsetting were the stories about how medical staff in England came out of retirement to fight in the hospital frontlines, only to succumb to the disease. It was a grim reminder that all humans are, at our core, similarly vulnerable.

At first, it was the healthcare fallout that was front of mind in the global consciousness. Then, Covid-panic led to a worldwide Covid-lockdown. No country was unscathed, few businesses, whether on the supply or the demand side, were unaffected. Here was the virus flexing its muscles – as the great economic leveller.

But is that really the case, or are some segments of society underwriting a larger chunk of the virus price tag?

Is it in fact, the Great Accelerator?

Lockdown sent people scurrying to work from their homes (WFH). This was when the dividing line started to show.

Laptop warriors, able to carry out their economically valuable activity anywhere with just Wi-Fi, were best equipped for WFH. Traders continued to profit from arbitrage without missing a beat, IT folks and other techies thrived in their cyber-environment, as have many professionals.

The same was largely true for my firm, TSMP Law Corporation. WFH was an inconvenience, but it did not take away our jobs. We have been keenly aware of digital disruption in the legal industry, having warned about it here in Forefront three years ago. We pride ourselves on being cutting edge and our lawyers adapted remarkably well to WFH’s exigencies, as did Singapore’s legal sector generally. The courts and the Singapore International Arbitration Centre have segued relatively painlessly to virtual hearings. In fact, Singapore is poised to grab a larger share of the international dispute resolution market. After all, if hearings the world over must be conducted over video, why litigate in Cambodia, Thailand or Vietnam if you can have the seat of your dispute resolution in an international legal hub like Singapore?

But the pandemic has also exposed weaknesses. Internally, our productivity fell probably by 20 per cent – not for lack of legal work, but because our back-office functions, while computerised, still required too much human intervention. Lawyers had to undertake tasks usually done by support staff, who now could do much less from their homes. With WFH poised to be the new normal, at least for the next 12 to 18 months, our law corporation has had to implement back-end automation software. It is a migration that we would have done in three years, yanked forward due to urgent necessity. And while Government assistance is generous – up to 80 per cent of a S$400,000 first-year cost – subsequent yearly fees will see a big jump in the firm’s technology spend.

Technology will thus replace the work of lower skilled staff, yielding productivity savings of an estimated 35 per cent. That sounds great until you translate it into human terms: more than a third of these folks will be rendered redundant. A two-month circuit breaker is something everyone hunkers down to ride out; longer than that and companies have to make permanent structural changes. Forced to decamp from the office, technology becomes the new “rent” – the single most expensive line item in your monthly expenses. It is a cost that will be borne disproportionately by our receptionists, secretaries and other support staff, who must be upskilled or face being retrenched.

Ironically, the coronavirus has done what the government has been pushing for years – rev up tech adoption. Not just accelerating the rate of technological change, the pandemic is also speeding up the rich-poor divide. The lower-skilled, and hence lower-paid, employees are most affected by innovation’s march, and are seeing their lunches stolen by machines. Those least able to afford it bear the biggest brunt.

It is a thorny problem. While the Government’s substantial job support packages help companies keep workers on the payroll, these can only be temporary patches that buy time to retrain staff. Typically, the employees who most need to retool are above 50, for whom the old way of doing things is more than a means to earn a living, it is a security blanket. Technology is befuddling and threatening, and its rollout is often met with a passive resistance born of fear.

The bigger picture

And no matter how large Singapore’s reserves, it cannot underwrite the livelihood of an entire generation of the workforce. In a crisis, the money must go to keeping otherwise healthy companies on temporary life support – to borrow a Covid analogy, by putting them on a ventilator until their lungs can work properly again. The aid cannot be used to keep bad businesses alive artificially, or our economy will be overrun with “zombie companies”. Such enterprises have no place in tomorrow’s economy. And because of Covid, “tomorrow” has been brought forward to today.

But a country is made up of its citizens. What is the point of having a thriving economy if we cannot look after all our people? The answer is not in more handouts; we need to make some seismic changes across all segments.

First, the government. It needs to take the courageous step of saying “no” to saving companies and jobs that have no place in the new economy. This will be unpopular and painful, all the more severe because there is no time to ease into the change. Older workers will be out of jobs; those leaving school will face an unwelcoming employment market. But the government must persevere in applying our reserves solely to help companies that are adopting innovations for long-term survival and workers who are willing to be re-trained and re-deployed, not simply retained.

Then, the corporates. Those in sectors that find it tough to attract Singaporeans must embrace technology and innovation to cut out back-breaking, menial work, and creating highly regarded, better remunerated roles. This will engage employees seeking value-added, complex tasks, in otherwise less-attractive industries.

Now, society. Singaporeans have to overcome our bias against certain jobs. We have a huge foreign worker population in Singapore because locals are loath to wait on tables, nurse the ill and plumb toilets – all of which are respectable jobs in the West. As a society, we need to recognise the importance of these jobs, and those who do them. Beating ourselves up over how we treat foreign workers should morph into a deeper appreciation of their role in building our nation. And if the pandemic has taught us nothing else, it should have seared the importance of healthcare work into our collective consciousness. These are not jobs to be looked down upon, certainly not when your old job no longer exists.

Extreme situations bring out the worst clichés: I have been told repeatedly that you should never let a good crisis go to waste. It is also said that this pandemic will be our generation’s defining event. Both are true, but the analogy that springs to mind is that childhood story of the frog in a pot. The amphibian does not know it is being boiled alive because the fire is being turned up gradually. Likewise, Singapore. If we do not reinvent ourselves, we may discover too late that this is no warm bath to be savoured. Coronavirus has turned up the heat drastically. Time to make the leap.