With the COVID'19 pandemic affecting the labor market drastically, we aren't surprised anymore to learn about mass layoffs in a plethora of firms like Uber, Boeing, Rolls Royce, etc. A zoom call is enough to let you know that you're fired! Meanwhile on observing the trends, a lot of studies suggests that a major proportion of laid off workers are middle level employees (i.e. employees with moderate skill set). This is because of their outdated skill set needed to perform thriving tasks conceding to the rapid growth in the market. With regards to wage polarization, almost every employee in a firm faces a pay cut due to the pandemic, with high and middle level employees carrying majority of the burden. The disruptive technologies are procured in many of the firms these days, as they feel the productivity has plummeted in the recent times with the change in technological trends. AI is a favorite for any industry, due to its ability to do a myriad of tasks at a single go. Or in other words, it simply replaces a lot of middle level employees and polarize the wages of the rest of them. Wages are nothing but the gratification for the work you've done and the effort you have put in to finish the task assigned to you. When technology is leveraged to do the same task more efficiently, why would an employer pay you the same money for less work. Hence, a polarization occurs in the fields where there is a significant shift towards computation and it's unavoidable to say the least.
A relevant example would be of the automobile industry. Automation in assembling, designing, etc has prompted layoffs and wage polarization across the world. A profit maximizing firm tries to reduce its costs as they look on surge the production, so they react with the employee wages since the automation set up is a one time investment and is permanent unless wear and tear.
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