The Value of Work: Rethinking Labor Productivity in Times of COVID‐19 and Automation

• Author: Juan Chebly,Austin Schiano,Divya Mehra
• DOI: http://doi.org/10.1111/ajes.12357
• Date: 01 September 2020
• Published date: 01 September 2020

The Value of Work: Rethinking Labor

Productivity in Times of COVID-19

and Automation

By Juan Chebly*, austin sChiano†, and Divya Mehra‡

abstraCt. This article provides a new perspective on the value of

work and recommends ways to respond to labor market failures

exacerbated by the COVID-19 pandemic and by increased automation.

We consider the human right to work, the dangers of pursuing short-

term efficiency, and the use of the U.N. Sustainable Development

Goals as a framework for inclusive economic innovation. We conclude

with recommended policies to build forward and achieve inclusive

development.

Introduction: Work as a Transgenerational Human Right

Labor productivity has been an accurate measure of the develop-

ment of human capital throughout natural and written history. While

labor productivity increased negligibly during the first 200,000 years

of human history, it has exponentially increased since the late 18th

century and the birth of the Industrial Revolution. The invention,

innovation, and diffusion of the steam engine was the key to unlock-

ing the exponential growth of labor productivity. However, the steam

engine as a catalyzer of productivity also prompted inhumane work-

ing conditions for workers and initiated two centuries of environmen-

tal destruction and, in many situations, increasing income inequalities

(Sachs 2015). These trends show that, while technological advance-

ments in labor productivity have, on average, helped boost income,

social and environmental development progress has not been com-

parable. According to multidimensional measurements of progress,

such as the Genuine Progress Indicator, the World Happiness Report,

American Journal of Economics and Sociology, Vol. 79, No. 4 (September, 2020).

DOI: 10.1111/ajes.12357

© 2020 American Journal of Economics and Sociology, Inc.

*Visiting professor of economics, St. John’s University. Email: cheblyj@stjohns.edu

†Public relations manager and global researcher. Email: AustinSchiano@gmail.com

‡Doctorate in public health. Strategic partnerships officer at World Food Programme.

Email: divya.mehra@wfp.org

1346 The American Journal of Economics and Sociology

and the Human Development Index, well-being has not increased in

step with average material growth. The United States, the most pro-

ductive economy of the world, illustrates how a rise in productivity

and income has not translated into well-being for American society

(Helliwell et al. 2020).

Understanding work as a human right in the context of sustainable

development merits a comprehensive approach to labor markets that

engages in targeting root causes of labor market failures, as opposed

to merely trying to ameliorate social distress with public spending.

While labor markets have proven to be the most efficient way of allo-

cating workers to particular tasks, they fail to address persistent unem-

ployment and the positive externalities of employment, such as social

and technical skills learned by employees. These positive externalities

and the complexities of labor as part of the resource market can be

attributed to the human dimension of work.

According to Amartya Sen (1999), the freedom to work dignifies

people through human development. This approach is not far from

metaphysical and theological approaches, but it is rooted in economic

principles. Take, for instance, domestic child rearing and housework,

which go unrewarded by our economic system. This type of work

is central to all aspects of our human society. Firms gain from the

positive spillovers or externalities generated by these unpaid services

within households when firms hire workers whose human capital was

created outside the market. In addition, firms are reluctant to invest

in transferable capacities that provide benefits outside the firm. For

example, no firm willingly foregoes profit maximization to provide in-

definite paid maternity and paternity leave. Profit maximization, after

all, is the driving force of firms and markets. But profit alone does not

provide value.

The concept of the value of human labor has implications for pol-

icymakers concerned with human rights, well-being, and long-term

efficiency in relation to sustainable development. The human right to

work, for example, is addressed in Goal 8 (decent work and economic

growth) of the U.N. Sustainable Development Goals. The aspiration of

decent work for all is not only compatible with, but explicitly linked

to, economic growth. Nobel Prize winners Stiglitz (2015) and Sen

(1992) have linked social outcomes, such as human development,