Recent graduates in China want to be using iPhones, not making them, resulting in increased competition for the shrinking pool of workers willing to do factory work, which drives up wages. The minimum wage—about $207 a month in Shenzhen—has risen in China by almost 22% in the last year, according to the Financial Times.
Thus China faces losing manufacturing jobs to countries with lower labor costs, most notably Vietnam and Bangladesh. Even Foxconn has moved much of its manufacturing to Malaysia and China’s interior. Which brings us back to robots.
Industrial robot sales were up 18% worldwide over the last year. The IFR predicts that over the next three years “rising wages and the increasing standard of living” will “push automation in the still low-wage countries of Eastern and Central Europe as well as in Asia and in South America.”
Talk about pushing automation; China’s state-run Xinhua News Agency reports that Foxconn is looking to produce 300,000 robots by next year and one million in the next three years. The industrial robots will perform simple tasks such as spraying and assembly. If all goes according to plan, an estimated 500,000 of Foxcon’s 1.2 million jobs will be obsolete.
In September, Slate’s Farhad Manjoo ran a series about how robots were poised to one day take over white collar jobs in the fields of law, medicine and media. For blue collar workers, that day is already here. The barrier to robots taking over jobs in medicine is, at this point, technological; the barrier to robots taking over factory jobs is a matter of simple economics. It’s still cheaper for a factory owner in Vietnam to pay human workers $85 a month than it is to install industrial robots.
But that might be changing. The IFR predicts that China will be the top robot market by 2014. If more large companies such as Foxconn put their muscle behind building industrial robots, economies of scale could make it cheaper for other manufacturers to buy and install robots. If the number of industrial robots rises to, say, three or four million, who knows how it would affect developing countries’ labor markets.
Foxconn did not respond to an email query by the time this story was published.