When "Cheap Asian Labour" Isn't Enough--Robots Work for Even Less
Some big North American outfits are moving production back to this continent for various reasons. Among them is the perceived need to shorten the supply line, but also because it's no longer as cheap in China, for example, as wages rise.
My reaction when I heard this was: hey, that's good. Why shouldn't everyone have better wages, and if the Chinese have reached that point, more power to them. Some of us remember when "Made in Japan" was synomous with "cheap." That hasn't been the case for decades, thanks to the intelligent way the Japanese managed their post-WW II recovery.
But it turns out that the story is much more comples because, in large part, of increasing robotization of manufacturing, according to The New York Times. On Friday Catherine Rampell had a very intersting analysis of the situation. Relatively cheap energy costs in North America are part of the story, and so is the decreasing gap in wages.
"Inflation-adjusted average wages in China, for example, more than tripled over the decade from 2000 to 2010, according to a report released Friday by the International Labor Organization," , she reports. On the other hand, "in the developed world, wages are just barely higher than they were in 2000. In the United States, other studies have shown that median household income is lower today than it was in 2000."
Yet the coup de grâce may well be coming from robots doing the work--and making the machines that make the machines that do the work. As Paul Krugman says: "...the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad." That's not an isolated case: "...similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers."
This is not something new unders that sun. In 1817 the economist David Ricardo wrote that "the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades."
And that might well be what is happening here. Be warned.
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My reaction when I heard this was: hey, that's good. Why shouldn't everyone have better wages, and if the Chinese have reached that point, more power to them. Some of us remember when "Made in Japan" was synomous with "cheap." That hasn't been the case for decades, thanks to the intelligent way the Japanese managed their post-WW II recovery.
But it turns out that the story is much more comples because, in large part, of increasing robotization of manufacturing, according to The New York Times. On Friday Catherine Rampell had a very intersting analysis of the situation. Relatively cheap energy costs in North America are part of the story, and so is the decreasing gap in wages.
"Inflation-adjusted average wages in China, for example, more than tripled over the decade from 2000 to 2010, according to a report released Friday by the International Labor Organization," , she reports. On the other hand, "in the developed world, wages are just barely higher than they were in 2000. In the United States, other studies have shown that median household income is lower today than it was in 2000."
Yet the coup de grâce may well be coming from robots doing the work--and making the machines that make the machines that do the work. As Paul Krugman says: "...the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad." That's not an isolated case: "...similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers."
This is not something new unders that sun. In 1817 the economist David Ricardo wrote that "the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades."
And that might well be what is happening here. Be warned.
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