Foxconn’s robot recruitment drive: the beginning of the end of labour?

Paul Raven @ 01-08-2011

Alex Knapp picks up on the story about Foxconn’s plans to draft in a cool million robots for their manufacturing plants within three years, and ponders whether this is good news for the unemployed in the West:

A good portion of this move to robotics labor has, no doubt, to do with labor costs and the reports of working conditions in FoxConn’s factories in China. I do wonder, however, what this means for the future of outsourcing to Asian markets, though. If labor costs can be reduced by employing more robots in the factory, and if its feasible for a company like FoxConn to use such a large number, it begs the question of why Western companies might continue outsourcing.

One of the major reasons, after all, that companies are outsourcing their operations to Asia is for the labor costs. If those labor costs can be obviated by greater automation, then other considerations come into play. After all, America and Europe are still where most of the customers are, and with the price of oil on the rise, cheaper transportation costs might come into the mix. Moreover, with both Europe and the United States teetering on the brink of another double-dip recession, policies geared towards bringing manufacturing home via tax incentives and other measures are more likely to become law.

Hmm. Even allowing for the traditional hyperbole of corporate press releases, a million automated machines will displace a whole lot of jobs. But Knapp is far more confident than I am about governmental willingness to pass laws that make demands of their corporate paymasters, let alone ones they’d actually be obliged to adhere to; the geographically-bound nation-state has no leverage on the transnational corporation, and the only incentive you can offer them is a taxation low-ball and further erosion of worker’s rights. In other words, sure, you might get manufacturing returning to the West, but it’ll only happen because labour costs have equalised… and that’s only going to happen in places where you’ve carefully created a huge stock of labour that doesn’t have any other options. Sweatshop USA… it’s a sign of how bad things are if you can count that as a victory condition.

And to extrapolate further, the rapid maturing of fabrication technology is going to obsolete a lot of more complex machinist gigs, too. They may well be countering fabbers and sinterers among the Foxconn “robot” list, of course, though the article mentions more simple stuff – welding, spraying, low-level assembly, which are exactly the sorts of jobs that robots have traditionally obsoleted before. I watched pick’n’place machines and surface mount technology completely gut the electronics assembly industry here in the UK back in the nineties, and less than a decade ago it was already cheaper for one company I know of to source components internationally, ship them to the UK for collation, ship them out to Thailand for assembly and then back again for QA and (extensive) rework, than it was to pay UK workers to do the full process locally. That sort of price margin isn’t going to be significantly eroded by concessionary tax rates, though increased transportation costs will admittedly contribute as well.

I think if there’s anything to take away from this inexorable slide toward nigh-total automation, it’s that we can no longer sustain a global economy that relies on mass employment in the manufacturing industry to keep the money moving. I suspect there’s a tipping point in the near future (or possibly in the recent past) at which – barring existential-scale disasters that knock us back into pre-industrial ways of life – it will never again be cheaper to get humans to build things than it is to get machines to do the same work.

What happens after that point to the business models of tchotchke makers and Next Big Thing gadget creation, I have no idea… and the more economists and politicians I listen to, the more I suspect that no one else has a bloody clue either. If anyone can show me how this *isn’t* a big old zero-sum game that’s going to hit a brick wall sometime soon, please pipe up and do so.


White faces in the day labour queue

Paul Raven @ 11-11-2009

I clearly remember my first day travelling in Mexico, walking out from my hostel to check out the zocalo at the centre of El D.F. and catching sight of long rows of men stood by their open toolboxes, with little signs explaining what sort of work they’d do, and for how much money. I’d never seen people queuing for day labour before; I don’t know if it’s ever happened in the UK during my lifetime.

It’s a more common sight in the US, apparently, especially in cities with high densities of immigrants, legal or otherwise. And now in Las Vegas (and elsewhere) the immigrants are being joined by US-born citizens as the economy continues its slow grind through the low times [via GlobalGuerrillas]:

In the latest sign of the Las Vegas Valley’s economic free fall, U.S. citizens are starting to show up in the early mornings outside home improvement stores and plant nurseries across the Las Vegas Valley, jostling with illegal immigrants for a shot at a few hours of work.

Experts say the slow-starting but seemingly inexorable trend is occurring nationwide.

“It’s the equivalent of selling apples in the Great Depression,” said Harley Shaiken, chairman of the Center for Latin American studies at the University of California, Berkeley.

It’s grim news from an economic perspective… but there may be a positive outcome, depending on your attitude. While there’s every chance that competing with illegal immigrants for low-dollar work may exacerbate the resentment and racial tensions that certain talk-show hosts love to exploit, in some cases the reverse may occur – citizens brought low by the financial crisis coming to realise that immigrants are people just like them, in other words.

Bernabe said organizers came across one case where a local sheriff had been sending officers to answer complaints about day laborers and then found one day that the sheriff’s neighbor, a citizen, was among them. Police in that area have been less likely to harass laborers since then, he said. These events will occur more, changing people’s attitudes in the process, he said.

“For a long time, people have looked at day laborers and said, ‘The problem is the immigrants.’ Now the economy is changing. Now people may see it’s a problem of the labor market, of the rights of workers,” Bernabe said.

Buchanan, meanwhile, looks forward to a future that includes a steady job and an apartment. “I’m trying to dig my way out of this,” he said. When he does, however, he sees himself as a changed man.

“Before, I was part of the majority. Now I’m part of the minority … I’m not going to forget this. I’m not going to forget any of this.”

It’d be ironic if the recession helped people to realise that the divide that really matters isn’t the border lines drawn on a map, but the invisible one drawn between the poor and the rich – the one that cuts across nationality and ethnicity in every country on the planet. It’d be ironic, but it’d also be the best thing that the recession achieved. What social changes might we see in a country where the poor refuse to be divided and conquered by the rhetoric of the rich? Would the atmosphere of brotherhood last, or would the first signs of recovery herald a return to the status quo?


From prison ship to labour camp – interstitial employment, coming to a port near you

Paul Raven @ 23-02-2009

prison-ship labour campThere’s been a labour dispute here in the UK regarding European companies shipping in workers from their native nations rather than hiring locally for UK-based contracts; given the current state of the economy, it’s caused a fair amount of angry words and governmental filibustering on all sides. [image via Financial Times]

Subtopia looks beyond the obvious headlines, however, and examines the former prison-ships being used to house the immigrant workers – partly to keep them safe from angry locals, but perhaps also subliminally as a reminder of their menial economic status:

While UK laborers bark about equal opportunity and contract fairness (and perhaps spew some racist vitriol in the process) there is the greater undercurrent of geo-economic exploitation here bobbing spaces of injustice on the surface. Particularly eerie to me in this picture is the spatial intermixing of incarceration and migrant labor, and how architecturally speaking the surplus of global capital’s industrial bodies are rounded up at sea inside the old remains of an overcrowded penal system, once oceanic jails now filled with a new kind of transient inmate, a new kind of quasi-prison labor force.

The bulk shipping of cheap outsourced labour isn’t nice for the local population, but what the mainstream media here in the UK is skipping over is how desperate the immigrants must be for work that they’ll put up with such deeply unpleasant conditions. This is the nasty underbelly of corporate globalism at work, and I expect we’ll see a lot more of it as the economic power of nation-states declines and the corporations move into their place.


Re-invigorate the economy: immigrants buy a house, get a free visa

Paul Raven @ 16-02-2009

Real estate for sale signHere’s a quick and dirty fix for the US economy – instead of closing up the borders, why not open the gates to skilled migrant workers, and give them a free green card with every house purchased?

While his tongue was slightly in cheek, Gupta and many other Indian business people I spoke to this week were trying to make a point that sometimes non-Americans can make best: “Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”

[snip]

We live in a technological age where every study shows that the more knowledge you have as a worker and the more knowledge workers you have as an economy, the faster your incomes will rise. Therefore, the centerpiece of our stimulus, the core driving principle, should be to stimulate everything that makes us smarter and attracts more smart people to our shores. That is the best way to create good jobs.

It’s easy to see why that piece is in the NYT’s op-ed column… but even so, it doesn’t sound like the craziest idea for ending the recession that I’ve heard in the last week. [via MarginalRevolution]; image by TheTruthAbout]