Monday, August 01, 2011 7:05:19 PM
Moreover, automation (resulting in fewer jobs overall) is the trend overseas as well:
Foxconn to Automate: Be Careful What You Wish For
Aug. 1 2011 - 7:21 am | 699 views
I think we’re all familiar with the regular cries that Foxconn, over in China, should pay its workers more? It is, after all, a fairly regular cry, that these people really ought to be paid more than the $200, $300 a month that they are.
Those with decent memories might remember this:
Foxconn, the world’s largest maker of computer components which assembles products for Apple, Sony and Nokia, is in the spotlight after a string of suicides of workers at its massive Chinese plants, which some blamed on tough working conditions.
That the suicide rate among those who work at the Foxconn factories was lower than the suicide rate in the general Chinese population did seem to pass many by at the time.
The thing is though, higher wages are not something that happen in a vacuum. Or if you prefer, there are no answers in economics, only trade offs. Foxconn wages have gone up and here’s the trade off coming:
Taiwanese technology giant Foxconn will replace some of its workers with 1 million robots in three years to cut rising labor expenses and improve efficiency, said Terry Gou, founder and chairman of the company, late Friday.
The robots will be used to do simple and routine work such as spraying, welding and assembling which are now mainly conducted by workers, said Gou at a workers’ dance party Friday night.
Higher wages means that automation becomes, relatively, more profitable. And it is to automation that most jobs go to die, not trade or international competition.
These robots are being used at Foxconn for the same reason that self-service checkout counters are being used in supermarkets, for the same reason that self-service yoghurt shops proliferate. The change in relative prices between labour and machines means the machines are being used in place of the people.
Those who have been agitating for higher wages can pat themselves on the back for those who keep their jobs will indeed be getting higher wages. But there will be fewer of them as a result.
Manufacturing jobs, minimum wage jobs, service jobs, whatever, the result is always the same: raise the price of labour and more automation will happen.
http://blogs.forbes.com/timworstall/2011/08/01/foxconn-to-automate-be-careful-what-you-wish-for/
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