Manufacturing jobs – options might be needed!

I was prompted to write about this situation especially for those people working in manufacturing jobs , or who might be considering a career in this area because of a recent article I read in the Business Spectator (this is a section in The Australian newspaper).

The article, was in the 31st May 2016 edition of the paper and written by Robert Gottliebsen, a well known, respected business and economics commentator.

While this article is mainly about engineering jobs, a number of the key points in Gottliebsen’s article apply to many of us who work in other occupations likely to be impacted by technological advances – I’ll come to why shortly.

Gottliebsen’s article is basically about unfolding events occurring with regard to manufacturing industries in China – specifically in the satellite city of Kunshan, which is part of Jiangsu province.

What’s so special about Kunshan?

Kunshan is a city with a population of about 1.65 million people.

Quoting Wikipedia about Kunshan:

Kunshan is regarded as one of the most economically successful county-level administrations in China. The GDP has grown substantially from around 20 billion yuan in 2000 to 300.1 billion yuan (US$47.08 billion) in 2014, becoming the first county-level city (in China) with a gross domestic product exceeding 300 billion yuan.

And….

Kunshan has a capital-intensive and export-oriented economy. It’s growth has been heavily relying on direct investment, and exporting.

Taiwan has been one of the key players providing enormous capital investment in manufacturing in Kunshan.

In fact, according to the South China Morning Post,  35 Taiwanese companies have spent a total of US$400 million on artificial intelligence.

Some of this money has gone to a company called Foxconn. Foxconn, based in Kunshan is a major manufacturer and supplier of consumer electronics. Its customers include a number of well known companies, including Apple.

What happened at Foxconn?

As a direct result of that capital investment into artificial intelligence, and the introduction of robots to do their manufacturing jobs, the factory reduced its employee numbers from 110,000 people to 50,000.

You don’t need Robert Gottliebsen to tell you that a cull of 60,000 employees by one company is a pretty massive decline, even for China.

Sadly, many of the people working in Kunshan, and with Foxconn are migrants from other parts of China.

Imagine the social, financial and economic impact of 60,000 people suddenly out of work in a city of 1.65 million people.

And there’s more…..

Quoting again from Gottliebsen’s article:

“According to a Jiangsu government survey, as many as 600 major companies in Kunshan have similar plans

The context for Gottliebsen’s article

Gottliebsen wrote the article mainly to highlight the fallout from the global decline in manufacturing jobs, and the impact of this, particularly for middle class workers.

He points out that those who have lost their jobs in manufacturing often find employment in service related industries. The issue here is that pay rates for these types of jobs are much less, and often the available work is part time.

This in turn results in lower standards of living and growing social unrest as the middle class now turn to politicians and governments for solutions to their reduced circumstances.

He writes that political leaders right around the world are grappling with this growing issue.

As an example of different ideas being explored at a government policy level, Gottliebsen describes the contrasting positions of the two major political parties here in Australia:

• One party advocates a large increase in government spending on infrastructure – primarily as a means of creating new jobs for the middle class
• The other party intends to encourage more entrepreneurship as the means of creating employment. How this will be encouraged wasn’t specified.

Similar to the Great Depression?

In his article Gottliebsen refers to a video discussion he saw between two Columbia Business School Professors Joseph Stiglitz and Bruce Greenwald who were discussing the cause and impact of the Great Depression of 1929 – 1939.

To quote from the article:

…the base reason for the great depression was the dramatic reduction in employment in agriculture because of better productivity. That sudden lift in production created gluts that slashed prices and bankrupted many farmers. At that time, the farming community employed a third of the total workforce in countries like the U.S.

Manufacturing is suffering similar blows to those that hit agriculture in the 1930s, although it should be noted that manufacturing employs a significantly smaller proportion of the workforce than agriculture in the 1930s.

Serious problem – no easy solution

I have written other related articles on the topic of the future of work in this blog –  click on this link if you wish to read the related material.

Technology, automation, robotics – the list goes on about the trends that are transforming the nature of work, and employment opportunities across a diverse range of occupations.

This is not just a problem with manufacturing jobs. It’s a serious global problem affecting many occupations.

Therefore, is it still safe to continue to have the mindset where all that is needed to sustain your standard of living and lifestyle is to find a job with an employer who will look after your welfare?

What happens to that job, and maybe the organisation employing you when your work is replaced by some form of automation?

In my opinion it isn’t a great option either to wait for governments to come up with some sustainable solutions whereby everyone who wants to work can do so.

You can probably conclude that I’m very much in favour of taking the entrepreneurial pathway. This at least means that I have a certain degree of control over my economic circumstances and lifestyle.

Summary

The main purpose of my article is to again highlight that the standard approach that many people have towards their employment and career management is very risky.

On a positive note – change also means opportunity. In the digital world new types of work are being created every day. Many jobs of the future haven’t been created yet.

So, what will your approach be? Wait for governments and government policy to solve this problem of future employment and maintenance of living standards?

Or, maybe start to explore what you can do for yourself so that you have more control over your future?