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The Rise of the Robots – Global Labor in more trouble

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Global Unemployment

The phenomenon of growing unemployment across the world has become a regular feature across daily news stories. This is not restricted to one nation or region but seems to be happening across all countries. Higher structural unemployment has become an accepted fact. Some countries like Greece, Portugal and Spain are seeing depression like unemployment levels. Emerging giants like India and China are seeing massive underemployment as well. White collar workers are making less money than blue collar workers, as millions of graduates come out of universities each year. There are just not enough jobs for the existing workforce, let alone the millions who come out ever year. In India even elite universities like the IIMs are having difficulty in getting jobs for their graduates.

The reasons for the growing unemployment are in my view:

a) Growing population

b) Rising globalization which is leading to depression of salaries everywhere

c) Capital is getting ascendancy over labor due to wrong policies pursued by the governments ( lack of big inheritance taxes, softness on tax evasion etc.)

Now an improvement in robot technology has started to pressurize labor. Foxconn which is amongst the largest private employers in the world with over a million workers is planning to replace a large chunk of its workforce with robots. Note Foxconn is repeatedly in the news for worker suicides. A spate of suicides at Taiwan’s Foxconn factories made media headlines forcing the company to increase wages under international customer pressure.

Asian White collar workers face Unemployment and Low Wages due to Increasing College Education

As India grows more prosperous and more citizens get educated, the country is facing a major problem. While every country would kill for millions of graduates passing out every year, India is finding them to be a problem. The reason is that India is seeing jobless growth with a paucity of decent jobs on offer. The real topline growth of companies has stagnated and profits are not growing. In such an environment, hiring is anemic and restricted to a few sectors only. Corruption infested sectors such as telecom, aviation, construction have seen massive layoffs in recent times. The IT industry which used to be major employer of fresh graduates is also getting saturated and cannot find jobs for the torrents of graduates that pass out every year. The income inequalities are becoming more and more stark as billion dollar houses get built, while hundreds of millions finding it difficult to find two meals a day. This socioeconomic malaise is generally ignored by kool aid drinking investors pouring the billions of dollars into the India stock market fulled by zero interest rates.

The spectacular growth in Asian economies like China, South Korea, HK, Taiwan over the last two decades has raised millions from poverty to a middle class life. This has led to increasing education levels among the new generation of Asians. Parents have poured a large part of their earnings into children education, which was seen as a ticket to a better life. But many of these newly entered work force participants are not finding the pot of gold at end of the rainbow. This is because the population of college graduated workers has increased significantly, putting  the laws of supply-demand against these workers. In fact  the wages of college educated workers have declined in some cases.

Perversely for these educated Asians, the wages of Blue Collar workers has increased at a much faster pace compared to the White Collar workers. While the wages for highly in demand skill-sets and experience approach those of the western counterparts, the wages for those with little experience and “commoditized  college degrees” continues to remain stagnant. This has been the experience in many countries across Asia like South Korea, India, China.


Taiwan’s tech giant Foxconn will hire 5,000 technicians locally this year, many of them to work on factory robots to build its gadgets, officials said Monday, in a sign the firm is refocusing operations to its home island.Foxconn said the move was due to increasing automation of manufacturing and assembly lines in China, where rising labour costs have squeezed profit margins.

Some of the new employees are to work at a software complex in Kaohsiung, in southern Taiwan, spokeswoman Laura Liu said, while others will staff a robot research unit in the centre of the island, and a development unit at the company’s headquarters outside Taipei.Chairman Terry Gou told media that Foxconn — the world’s largest maker of computer components, which assembles products for Apple, Sony and Nokia — plans to use one million robots to do “simple” manufacturing work by 2014.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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