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Foxconn Cuts 60,000 Jobs, Replaces With Robots (thestack.com)
An anonymous reader writes: In a bid to accelerate growth and reduce labor costs, Apple supplier Foxconn cut 60,000 jobs at a single factory, work that is now being completed by robots. As many as 600 companies in the Chinese manufacturing hub of Kunshan may have similar plans to automate their workforce, according to a government survey. Foxconn spokesperson Xu Yulian said, "The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labor costs." He added, "More companies are likely to follow suit."
These changes are spurred in part by a desire to reduce labor costs, but have also been made in response to an explosion at a Kunshan factory in 2014 that killed 146 people. The explosion was attributed to unsafe working conditions in the Taiwanese-owned metal polishing factory, which were recognized and documented. After the explosion, the local government pledged 2 billion yuan per year in subsidies to support companies that install industrial robots on their production lines.
These changes are spurred in part by a desire to reduce labor costs, but have also been made in response to an explosion at a Kunshan factory in 2014 that killed 146 people. The explosion was attributed to unsafe working conditions in the Taiwanese-owned metal polishing factory, which were recognized and documented. After the explosion, the local government pledged 2 billion yuan per year in subsidies to support companies that install industrial robots on their production lines.
Those who say "we're going to build our economy by bringing back manufacturing" are deluding themselves. Those who vote for those people are also deluding themselves. (yes, this is a not so veiled Trump reference)
Yeah, I was wondering that. Surely if robots are cheaper manufacturing can be brought back home now? Whats the advantge now of making stuff in china with all the associated shipping costs?
I know, those horrible lower costs should have never come along. We were better off when 43% of our income went to food (circa 1900), instead of 11.5% (circa 2015). We should have never improved technology; we were best off when cell phones cost $4,000 (1983, $9,000 in 2015 money) and 2 hours per week of voice would cost you $250/month ($550/month in 2015).
All we ever got for lowering costs were a bunch of whiny middle-class talking about how poor they are spending 40% of their income on junk, buying more and better health care, and buying larger houses than ever. Not only that, but poor people can more easily afford things like food, so they don't die and shut up as fast as when 90% of the labor force was farmers.
We were best off when Americans were poor because everything was high-cost. Anyone making less than ten million dollars per year doesn't deserve rich-people luxuries like cars, home ownership, pools, medical care, and cellular telephones. Only the elite should have internet access.
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. . . .the trend to automation of mass manufacturing has been accelerating for decades. The REAL question is, what do we do with the displaced manufacturing workers, who are becoming increasingly replaced by robots? And the "service sector" does not have jobs for them, either.
There is a rather ominous trend when you have a surplus of workers, especially young male workers without prospects. The long term solution is fewer children, as is happening in the West. But all too often, the short-term result is war.
I'm sure someone will start suggesting "basic income", and as automation increases to the point where we transition to "prosperity economics", that may well be the long-term solution. But getting through the short term is likely to be worrisome. . .
Your sarcastic tone was unnecessary to get your point across. In the long run it's impossible to argue with the benefits of industrial efficiency, and robots are a clear winner over humans for efficiency.
The problem is that society (an umbrella term encompassing individuals and their attitudes; government lawmakers and executives; and corporations' leadership) collectively has few ideas (and even fewer plans to actually implement those ideas) about what to do to take care of the laborers whose jobs are being taken away by this efficiency. We continue to see global population growth; there are more people than ever, but fewer jobs are needed as automation increases.
The whole "let them eat cake" philosophy won't work. You're talking about a 21st century revolution in the way business is conducted. You can't expect the current societal structures and economic theories to continue to work when you're making such a drastic change. The change is ultimately for the better, but only if we change our society to look after the people who will be out of work.
Let's hope that industrial efficiency and automation helps us reach the high ground, instead of delving into a horrid dystopia.
Still relevant: http://marshallbrain.com/manna...
Well, there are a few ideas that eventually will be forced to take shape out of necessity:
1. Basic income. With all this productive efficiency that don't need human labor, either you deal with a mass uprising, kill them off, or you tax the rich (those who've benefitted) enough to quell the masses with a basic income. You'll then essentially create two classes of people: productive people and dilettantes.
2. People will, due to a lot of time, a need for work and that creativity humans are known for, create more stuff that only humans can create. One obvious area is art and personal services. We saw the shift from physical labor to factory labor when agricultural technology improved. We're now seeing the shift from factory labor to office and household labor due to manufacturing technology improvements. In the future, gadgets may be what food is like now: something only ~5% of the population needs to work on and is universally supplied to all. People will spend ~10% of their income on it just like they do clothes and the majority of spending will be on "touchy feely" objects like "artesian, infused craft beer".
The president of Foxconn was asked about this in 2010; why not manufacture in the US using automation? He said, "I worry America has too many lawyers. I don’t want to spend time having people sue me every day.” Labor costs aren't the only concern; the US is a regulatory and political mine field filled with lavishly funded pressure groups that impose huge costs on industrial investment.
Pointing this out invariably provokes the knee-jerk Sierra club trained response; "so you think the filthy pig-dog capitalists should be allow to pollute everything right?" This is done using some device manufactured in China because the writer couldn't afford to purchase a machine manufactured under the regulator regime he insists on for his own country. So we shit up Asia instead and feather our own regulatory nest.
Maw! Fire up the karma burner!
Take a look at the water pollution and air pollution associated with that manufacturing, then take a look at the environmental regulations in the USA versus China.
Now you have your answer why.
Cost of labor isn't the only reason that manufacturing has moved to the third world. One of the big reasons that the rivers and air in the USA is cleaner now than in the 50s and 60s is the migration of dirty manufacturing plants out of the USA.
Decide for yourself if that is good or bad.
60,000 people, even at 10 cents an hour, is a lot of money.
Average factory wages in China are about $3/hour, not 10 cents. Since prices for many things are much lower in China, $3 buys as much as $10 in America. A Chinese factory worker can't afford a house and a car, but they can afford an apartment and a bicycle.
> We need to lose this mentality of selling our time and labor to make a living.
> and when I have an answer, I'll be sure to first make my billions off of it before I share with the World.
My company is pretty much fully automated from the customer's perspective. Our automated systems provide the service to the customer. One of the first things I did when I got hired was I analyzed the code and made the automated system run 30% faster, and more reliably. Because the changes which I did once were deployed to dozens of servers servicing thousands of customers, it was very valuable to the business. It basically multiplies my value by thousands of times - I improve the code once, thousands of customers benefit forever.
It's been true for a while and I think it will become more true - for a good income it's best to provide knowledge and skill rather than basic labor. I study about 6 hours per week, and will continue doing that. That might be a new frame of mind for many, that your job is to a) improve your skills and knowledge and b) apply that immense knowledge. Also, for ling term financial stability you've got to invest the 10%-15% of your income in income-generating assets, so you become a part-owner (shareholder) of the robots and other equipment through the businesses that own them.
Mass automation of grunt work and more free time because of it should be a good thing. But, we don't know how to distribute the resulting goods and wealth. We seem to be entering a new phase of history and economics with different rules. It's both exciting and frustrating.
The economies of "mature" nations are not behaving normally:
1. The "recovery" is slower than past patterns.
2. Inflation is too low. Economies tend to do best with inflation around 2.2% (annual), but we've been hovering around 1.7% for a while.
3. Low interest rates are not triggering investments.
4. Investors and companies prefer sitting on cash instead of investing.
Taxing the wealthy heavily is one common suggestion for distributing this "jammed" wealth, but this rubs many people wrong.
Outright printing money and distributing it to regular consumers is another suggestion (AKA "helicopter money"), but nobody is sure of the side-effects.
Reducing regulations is another suggestion, but most federal regulations were put in place because one or more organization were doing sleazy things. We don't want to become a 3rd-world dump in order to compete with the 3rd world by polluting more and having abusive working conditions. State-level regulations, which are often passed with less scrutiny, are possibly a better place to clean up bad laws, but require state governments to act.
What are the other options? We may have to just experiment with one or more of the above, but admitting you are experimenting looks bad, politically.
Table-ized A.I.
So-called 'Universal Basic Income' will not scale up; everyone points to small EU countries who are only talking about it, haven't actually done it, who don't have trillions in National Debt to deal with. It won't work here in the U.S and in any number of first-world countries.
You UBI people also make another fatal assumption: That people, not having to work, will 'find their purpose in life'. They will not. Most people have no clue, their entire lives, what their 'purpose' is, and never find one; these people need to be given a purpose; it's called 'earning a living and surviving', AKA 'having a job'. Most people will sit around, eat, have sex, get fat, litter the planet with their directionless offspring, and otherwise get in trouble out of utter boredom and too-much-time-on-their-hands, all on the government dole.
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
Most people will sit around, eat, have sex, get fat, litter the planet with their directionless offspring, and otherwise get in trouble out of utter boredom and too-much-time-on-their-hands, all on the government dole.
Yes, this is exactly what the millions of Americans who are independently wealthy do all day. Or do they actually get a great education, work even harder than everyone else, and make great contributions to our society? Probably a little of both. If you don't think inherited wealth ruins the rich, there is no reason to think that a UBI will ruin the poor either; unless you think that the poor are inferior in an absolute and unchangeable sense.
Let me add, I'm not really saying things will be different this time. I'm saying this is all part of a continuing trend; the same automation trend that you are talking about. Except now automation is not just for factories, it is for everything. It is a known fact that salaries have been stagnant since the 70's despite a 12x increase in productivity. Executives now make, what, 800x more than the common worker as opposed to 20x more in recent memory. Everything is changing and the end game has always been to lower costs as much as possible. Except when automation was expensive or not available, people were seen as necessary cost and now they are expendable. Really this is all obvious, not even sure why I'm taking the time to explain it.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Speak for yourself. If I had enough money to retire right now, I'd have more than enough cool personal projects to last me the rest of my life. :-)
But seriously, you're right that most people need some kind of work to have a purpose. However, that doesn't necessarily mean that it has to be corporate work for a company trying to make a profit. Right now, there are lots of nonprofits that just can't work because of the costs involved. I have at least a couple of them in mind right now that I'd love to start, but lack the tens of millions of dollars of seed money to build facilities and hire people. (I'm not going to hire people unless I know I can keep them employed for more than a few weeks, and that's not something I can do with my own personal cash supply.)
However, if I knew that there were millions of unemployed people on the government's payroll who would be willing to volunteer, that would change the equation significantly. Suddenly, I could bring in volunteers for the nonprofit to do the work, and I wouldn't have to worry about not being able to pay them, because they would be guaranteed enough of an income to pay the bills. I might even be able to raise enough money to supplement that income a bit, knowing that if things got tight, we could cut our expenses down to basically zero without our staff starving.
I predict that a basic income would create a new revival for nonprofits, providing a wellspring of staff willing to volunteer.
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So-called 'Universal Basic Income' will not scale up; everyone points to small EU countries who are only talking about it, haven't actually done it, who don't have trillions in National Debt to deal with. It won't work here in the U.S and in any number of first-world countries.
You UBI people also make another fatal assumption: That people, not having to work, will 'find their purpose in life'. They will not. Most people have no clue, their entire lives, what their 'purpose' is, and never find one; these people need to be given a purpose; it's called 'earning a living and surviving', AKA 'having a job'. Most people will sit around, eat, have sex, get fat, litter the planet with their directionless offspring, and otherwise get in trouble out of utter boredom and too-much-time-on-their-hands, all on the government dole.
Okay, calm down.
You are predicting that something won't work based on little more than your opinion. Let's throw some facts into the mix.
POINT 1
Taking the US as an example, since you mentioned it specifically, note that the GDP per capita in the US is a little over $53K per person. If the productivity output of the US were evenly distributed, that means that every man, woman, and child could spend $53,000 on goods and services this year, and next year they would have another $53 to spend.
Count only the working adults (about half the population) and that number doubles.
POINT 2
Productivity has about doubled since 1970. That's only 40 years ago. If you believe the trend is linear, it will double again in another 40 years, but if it is exponential, then it will quadrouple in another 40 years.
POINT 3
A hypothetical $1,000,000 invested in an index fund is expected to return around 7% interest over the long term. You need to take the long view on this rate, and not cherry-pick individual past decades - it's been consistent with the rise of productivity. See point 2 above.
Given 1% for management fees and 2% to account for inflation, that $1 million would pay out $40,000 per year in perpetuity.
The US could start a process of putting $1 million deposits aside and awarding the payouts to working class people on some schedule. A lottery, for example. If you want to work, you don't have to enter the lottery.
Note that the cost of the Iraq war was $1.7 trillion dollars, spent over a decade. That amount of money awarded to worker annuities could have reduced the workforce by 1.7 million workers, making the remaining jobs easier to find.
POINT 4
Note that we are rapidly developing self-driving vehicles. The first self-driving semi is on the road right now!
Even if the self-driving vehicle isn't useful 100% of the time (snow, limited visibility), by my calculations this will dump 2.5 million into the labor force almost instantly.
Note that Amazon is experimenting with delivery by drone. This could potentially drop another million into the workforce almost overnight. (If you include postal workers and some others not accounted for in the previous link.)
POINT 5
Regardless of whether you think it will work or not, something has to change.
You either make it work, or try to survive the burning destruction of the US, a modern recast of the French Revolution.
Do you have kids? You might consider what type of world you want them to live in.
The thing is, most of us here in Europe already have it of sorts. I just checked the standard for social aid here in Norway, essentially the lowest form of benefits if you don't qualify for anything else and have no means to sustain yourself. Last year it was 5700 NOK/month = $8200/year + cheapest form of housing with insurance and utilities. Norway is expensive so purchasing power parity adjusted that's more like $7400 and since we have 25% general VAT, 15% on food the government will make quite a bit back so maybe more like having $6000 in the US. But with rent, insurance and utilities taken care of you can stretch those $500/month quite a bit if you just look for second hand stores, flea markets, giveaways and such. That said, some counties have also introduced activity requirements so you will be wasting your days doing community service, not just sit around and play WoW. But nobody's going to end up in a tent camp, unless they have such drug problems we can't really house them anywhere.
Live today, because you never know what tomorrow brings
You mean bunk bed with 10 other workers.
Dormitories are available at many factories in Shenzhen, and other cities with largely migrant workforces, but they are optional, and most factory workers do not live in them. Factories in cities with more settled workforces usually do not offer dorms. I have never seen a dormitory at any factory in Shanghai.
And now you've accidentally discovered the truth about our "free market economy". Minimum wage workers cost less than slaves.
Isn't it grand?
You are welcome on my lawn.