Will Robots Cause Mass Unemployment in China?

[SJohnson]

http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#page1





The U.S. had the luxury of building a strong middle class during an earlier time. Technology was advancing consistently and increasing productivity, but it was not so advanced as to create a mismatch between the type of available jobs and the skills of workers. Unionization was strong in the private sector and helped ensure that the lion’s share of productivity increases ended up in workers’ (rather that corporate owners’) pockets. Those workers, in turn, became the broad-based consumer class that purchased the output from all those factories and kept the overall economy humming.

By Martin Ford

Read more at http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#295IvY9BFGQJRov2.99

[Igel]

1. Yup.

A lot of China's relative prosperity is due to low wages.

As wages and other expenses increase, the choice will be to transfer production to another country with lower wages or to find a way of increasing productivity to keep cost per unit low. That means automation, just as it did in Detroit and other places. Even then the push for lower wages (and other benefits) was important.

Mexico had, to a significant extent, the same problem. A lot of jobs went to Mexico. Mexican wages were undercut by Chinese wages. A lot of the jobs went to China.

It'll change when one of three things happens.

1. Wages level out internationally so that there's no wage disparity. Note that suddenly increasing wages tends to be very disruptive, so this won't happen in the next few years and probably shouldn't. The result would be either prices in the US increase or that wages in the US decrease.

2. Countries impose tariffs, and effectively raise the price of imports to meet the cost of domestically produced products.

3. People decide to willingly pay what it costs to produce things domestically instead of opting for less-expensive imports.

[unc70]

2. Not limited to China. Worldwide

Starting with easiest, most profitable items, all jobs that can be automated will be automated. Then all the rest will be automated.

[Did I Just Type This]

3. People "decide" to pay the amount for a product to be made in the states?

I pay what i can afford, so does most others. When we get a livable wage and don't have to decide between co-pays, prescriptions and food, maybe we can agree on paying a little for goods and services. I buy chinese made rpoducts because they are affordable, not because i don't care.