The revolution in technology is pushing the world’s workers out of production
In the immense corn and wheat fields of the American Midwest, unmanned tractors are seeding and harvesting crops. In California’s Silicon Valley, high-tech new industries are producing world-changing new products with only a handful of workers.
Even in China and India, the world’s great reservoirs of labor, industrial tycoons are replacing their workers with robots.
Is it any surprise, then, that the unemployed, the underemployed — and those who just see the handwriting on the wall — are in the streets protesting in country after country.
We live in revolutionary times. And underlying all the great changes underway is the revolution in technology.
In the American industrial “Rust Belt,” auto giant General Motors is producing almost 10 percent more cars with 25 percent fewer workers. In the low-wage South, GE is proudly showing off “advanced manufacturing” plants that produce its complex jet engines and gas turbines with only 350 workers.
Corporate honchos are well aware of the unemployment they are creating. But “it’s not as if we can say, ‘Let’s have low productivity (and employ more workers),’ GE CEO Jeffrey Immalt defensively told a reporter for the Financial Times. GE and other companies have no real choice other than replacing workers with robots if they are to stay competitive, the reporter acknowledges.
“But it illustrates why manufacturing employment has fallen by 5.7 million in the past decade.”
U.S. manufacturing output rose by almost 50 percent between 1997 and 2007. But, with robotic production, productivity (output per worker) almost doubled, meaning that and millions of jobs were lost.
In the U.S., workers have been much concerned about corporations exporting jobs — “outsourcing” them to cheap-labor countries. But now robotic production is replacing workers even in China and India.
Chinese tycoon Terry Gou employs more than a million workers in his sprawling industrial empire, where they manufacture fully half of the world’s outsourced high-tech products — computers, games, iPods.
But at a party he threw for employees at his biggest factory complex, he gleefully announced that he was buying a million robots, which would replace many of them. “His audience,” reports the Financial Times’ Beijing correspondent, “was shocked.”
India is already manufacturing the robots that are replacing workers worldwide. Headquartered in India’s car-making capitol, Chennai, Precision Automation and Electronics makes robots for Caterpillar, Ford, and Chrysler.
CEO Ranjit Date says that he had a hard time convincing Indian manufacturers to use robots because labor is so cheap there. But automation is even cheaper, and “we have grown in waves with the Indian economy,” he told the New York Times.
When Ford wanted to double its production in Chennai, it brought in 92 robots — “part of a planned transformation… to involve higher levels of automation,” reports an Indian business magazine. “The plant was originally designed for manual assembly.”
For decades, workers in the U.S. have been told that automation would create new industries and millions of new jobs — in services as well as manufacturing.
That is no longer true.
Small businesses — many of them start-ups — have generated two thirds of the new jobs over recent decades. Today there are as many or more new, small-business start-ups as before the recession began in 2008, but they are producing a third fewer jobs.
Online computer programs make it unnecessary for start-ups to hire staff for such basic things as accounting, inventory, and customer service. Doing its business online, for instance, a new mattress manufacturer needs only two part-time employees.
In telecommunications, a rising giant among service industries, jobs are also rapidly vanishing. The demand for things like smart-phones and tablet computers has been booming.
But call-center operators and sales people are rapidly being replaced by on-line buying and servicing, and the industry has terminated an eighth of its workers.
Sprint alone laid off 20,000 employees.
“Of all the lies that the American people have been told the past four decades, the biggest one may be this,” writes Harold Meyerson in the Washington Post, “[that] we’ll all come out ahead in the shift from an industrial to a post-industrial society.”
Yet that can, and should, be true — but only if we revolutionize society so that all of us, not just the oligarchy, can benefit from the revolutionized technology.
