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kuhla

The future of blue collar.

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This topic may be a bit too broad but here goes....

 

source - http://www.theguardian.com/world/2016/may/25/adidas-to-sell-robot-made-shoes-from-2017

 

 

[....]

The 4,600-square-metre plant is still being built but Adidas opened it to the press, pledging to automate shoe production – which is currently done mostly by hand in Asia – and enable the shoes to be made more quickly and closer to its sales outlets.

[....]

Hainer insisted the factories would not immediately replace the work of sub-contractors in Asia. “Our goal is not full automatisation,” said Gerd Manz, head of innovation and technology.

[....]

Six subcontractors of Adidas in China declined to comment on the new factories or said they were not aware of them.

In the longer term Adidas is planning to build robot-operated factories in Britain or in France, and could even produce the shirts of Germany’s national football team in its home country, said Hainer.

The shoes made in Germany would sell at a similar price to those produced in Asia, he said.

Adidas is facing rising production costs in Asia where it employs around one million workers. Arch-rival Nike is also developing its robot-operated factory.

 

This is just one of a handful of headlines I've seen over the last couple months regarding automation/technology replacing "blue collar" jobs. I am not sure how it will affect anyone in this group but I think it will impact a number of people in general negatively. I'm the last person to say we should side-step efficiency/technology just for the sake of employment numbers but I imagine some new solutions will have to be explored. I know some spots on the planet are experimenting with universal basic income but I wonder if our economic system is setup to handle that right now (I want to say no).

 

New problems for a new age.

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I'm not sure I would classify outsourced low wage garment/shoe manufacturing as "blue collar", those jobs pay significantly lower than our federal minimum wage. I feel like many of the garment/apparel jobs will slowly come back to the West as automation improves and increases, as well as various other jobs like CNC jobs, manufacturing/assembly for appliances etc. I consider the garment industry one that will experience dramatic change in their supply chain in the next decade. We're starting to see more companies become aware of the unethical business practices that are being used by the sub-contractors that make many of these garments. Not to mention the wages and shipping costs begin to become an issue once these countries' standards of living begin to rise. Countries like Bangladesh, India, and South East Asia are going to get hit very hard when we start replacing their low wage labor with automated labor located in western countries. We've elevated their standards of living slightly and now we're going to chop them off at the knees by closing down some of the largest exports they're known for.

 

As far as more western "blue collar" jobs that are being replaced by automation. These jobs have been getting slowly replaced for the last few decades. We use less factory workers to assemble and build cars and appliances, but on the flip side we've also created a decent number of CNC operators. While this is still a net loss in jobs, and more importantly most of the new jobs created do not overlap with the old jobs that are being destroyed, automation isn't merely going to replace every factory job. Also the elimination of a factory worker who's payed reasonable union wages is much easier to accomplish than replacing low wage positions because of the breakeven point being much higher.

 

This is a rather inflammatory new article talking about the replacement of McDonald's workers with machines (warning: fox news link):http://www.foxbusiness.com/features/2016/05/24/fmr-mcdonalds-usa-ceo-35k-robots-cheaper-than-hiring-at-15-per-hour.html

 

While I think that article is mostly rhetoric, I do think that some of the fast food process will inevitably be replaced by robots. I have no issue using a kiosk to order food from a restaurant, and the likelihood of replacing that person's job with a machine is pretty high. But even in a low margin environment like McDonalds, I don't think they're going to be replacing the cooks anytime soon, because of the process being too complex for current levels of automation to handle. Same thing with janitorial work, I doubt we're suddenly going to fire all the janitors in the world and replace them with roombas, that level of automation is at least 10 years away.

 

More to your point about the end game of all this technological progress. I think we're going to see the elimination of many "bullshit" jobs, and the shift towards fields that involve critical thinking or creative fields.

I'm far more concerned about random mid level office people getting automated out of a job than I am about manufacturing jobs. I have a feeling the largest threats to jobs will come from programming/scripting rather than robotic replacements.

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As I checked a few more headlines today, another one shows up, just illustrating the trend more and more.

 

source - http://www.bbc.com/news/technology-36376966

 

 

Apple and Samsung supplier Foxconn has reportedly replaced 60,000 factory workers with robots.

One factory has "reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots", a government official told the South China Morning Post.

Xu Yulian, head of publicity for the Kunshan region, added: "More companies are likely to follow suit."

[....]

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I expect this to become a rather large issue for China as well. Their working class is going to suffer pretty heavily from automation and the disruption it causes.

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I expect this to become a rather large issue for China as well. Their working class is going to suffer pretty heavily from automation and the disruption it causes.

 

What will happen to those 60k people in those factories who were let go? Other factories are starting to do the same so they can't more laterally. They are too old to really be re-educated and even if they could be no one will want to fund it. No jobs? No future? Then what? Accept indentured servitude, working for zero, just to have a roof, clothes and food?

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They have to find new jobs, and new skills. Just like the people who are let go from American factories or European factories. There is no easy solution.

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For reference, this is a better way of putting some of the issues we'll be facing with blue collar work.

Structural Unemployment: https://en.wikipedia.org/wiki/Structural_unemployment

 

Now in the US, my understanding is that some people who are laid off because of a large reduction in workforce or a manufacturing plant closure are eligible for job retraining. I sincerely doubt that exists in China or other non-western countries. Even the people who go through job retraining may not find the skills or simply may not be hired in a new position. The simple fact is that when 60,000 manufacturing jobs are cut it doesn't suddenly create 60,000 jobs throughout the rest of the economy. There's also the prevailing trend of people working longer, and the reduction in retirement/worker turnover is causing issues with the job market here in the US.

 

I think there are jobs available, and ideally people can find jobs that cannot be easily automated, but that does require some effort and skill. More than that it also requires the willingness to relocate, which isn't always an option for people. I think the safest place for blue collar work is in the trades: construction, electrical, plumbing, carpentry etc. Those blue collar jobs are very hard to automate, and often provide decent pay, but of course they're physically demanding and have little room for advancement. Not everyone wants to learn how to be a plumber after working on an assembly line for 10+ years, let alone think about starting at an entry level position in their 40s or 50s.

 

To touch on a separate point kuhla brought up. I don't think that simply providing universal income is a solution (or indeed if it's even feasible on a large scale). Universal income would almost immediately increase the money circulating in the economy and would probably cause a large spike in inflation. This is why often our social welfare programs eschew cash in favor of directed resources (food stamps, government housing etc.) because this negates most of the inflationary pressure. Additionally I think if we somehow managed to apply universal income with no inflation we would most likely see a commensurate drop in wages across most positions (if people are paid x and basic income is y then afterwards people would be paid x-y). Additionally you run into issues of local pricing, universal income would have to be higher in Southern California than it would be in rural Alabama because of the difference in costs of living. But should the government scale the basic income too well, there would be incentives to move to places with higher basic income (why be poor in a shitty area when you can be poor somewhere nicer?) There are way too many issues to consider implementing universal basic income here in the US because of our size and diversity as a country, but some smaller countries, or local municipalities it might work out.

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The think the issue of automation in China is a longer term problem (5+ years out) that isn't really important at the moment. More important to China right now is the large scaleback in production due to their lower infrastructure investment. What does automation matter, if the job doesn't even exist anymore? Not for the worker or the robot. Automation is a steady replacement decided while a industry shift is a sudden changes that affects everyone simultaneously

That's whats happening now with their 1.8 million steel workers:

http://fortune.com/2016/02/29/china-coal-steel-g20/

 

A good idea on how they might handle automation is to look at how they handle this crisis. For note, they presently have not received any retraining and the service industry may not be able to cope with this influx of available laborers.

 

https://next.ft.com/content/e5eb8716-f0c7-11e5-aff5-19b4e253664a

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The think the issue of automation in China is a longer term problem (5+ years out) that isn't really important at the moment. More important to China right now is the large scaleback in production due to their lower infrastructure investment. What does automation matter, if the job doesn't even exist anymore? Not for the worker or the robot. Automation is a steady replacement decided while a industry shift is a sudden changes that affects everyone simultaneously

That's whats happening now with their 1.8 million steel workers:

http://fortune.com/2016/02/29/china-coal-steel-g20/

 

A good idea on how they might handle automation is to look at how they handle this crisis. For note, they presently have not received any retraining and the service industry may not be able to cope with this influx of available laborers.

 

https://next.ft.com/content/e5eb8716-f0c7-11e5-aff5-19b4e253664a

 

I heard a blurp about this on the radio the other day. I agree it could serve as a kind of case study. The cause is different but the symptom might be the same.

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Other than trade jobs as malaphax mentioned and others like it- physically demanding and complex, there won't be a future for blue collar jobs. Robots are getting so good that all you really need is someone to manage the robot.

 

Same can be said for a lot of "simple" white collar jobs.

 

People in this sector will have to transition to either service sector or reeducate themselves.

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