Of late, we’ve all heard a lot of anxious media talk about how automation is poised to wipe out the white collar office jobs on which middle class incomes and lifestyles depend. The looming social upheaval forms a big part of the argument for the Universal Basic Income proposal.
However, virtually no coverage has been devoted to how automation is starting to wipe out millions of the jobs in the footwear and garment sweatshops of Asia. Yes, the same sweatshops that, for all their notoriously bad aspects, still enable huge numbers of people in Cambodia, Vietnam, Bangladesh, China, Indonesia etc to avoid utter destitution.
Not for much longer. The ‘sewbots’ are coming. A report by the International Labour Organisation last week contains the grim details. On current projections, the ILO estimates, some two thirds of the 9.2 million jobs in Southeast Asia’s textile and footwear sectors stand to be wiped out by automation – and that means about 64% of such jobs in Indonesia, 86% in Vietnam and 88% in Cambodia. In other words, the era of clothing and footwear multinationals moving their factories to Asia to take advantage of cheap and plentiful labour is coming to an end. Unfortunately, no safety net exists for the workers (and their families) who rely on these jobs. The wider economies of the ASEAN countries involved will also suffer: clearly, if there is no need for cheap Asian labour anymore, there is no pressing need to have the factories based in Asia at all. As Bloomberg News recently noted, we are already seeing this trend unfold with Adidas:
Collectively, Cambodia, Indonesia, the Philippines and Viet Nam represent 55 per cent of the company’s overall source market. In 2016, Adidas successfully tested a fully automated shoe factory (also known as “Speedfactory”) using 3D technology and robotics in Germany. Adidas plans to open the second Speedfactory in the United States in 2017. Speedfactory is part of Adidas’ efforts to individualize sportswear and react quicker to consumer needs by bringing manufacturing closer to its clients and speeding up delivery. While time will tell if Speedfactory is widely successful, its profitability could usher a new trend of footwear companies using advanced manufacturing techniques to produce goods closer to point of sale.
The automation process – the sewbots work faster 24/7, are more precise and make fewer mistakes – is happening in unison with other productivity enhancing processes such as ‘lean manufacturing’ and ‘fast fashion.’ Multinationals like the Spanish clothing and accessories retailer Zara are reportedly investing in in-house electronic monitoring processes that enable factories to adjust factory volumes, to pursue quick turnarounds, to sustain short production lines, to enable the running down of inventory and crucially… to locate the supply chain closer to the main markets. Obviously, customers will still need to be serviced in the emerging middle classes of Asia – but even bigger economic gains can be won by basing these automated garment footwear and accessories factories back within the traditional markets of Europe and the United States. Bloomberg, again:
Nowhere is that shift clearer than in Cambodia. Since the mid-1990s, global manufacturers have off-shored production there to take advantage of the country’s low wages, loose regulation and large population of rural residents eager for wage-paying jobs in the city. The result was a boom: By 2015, textile and footwear exports had become a $6.3 billion industry. They now account for about 80 percent of Cambodia’s export revenue.
Under the best conditions, textile and footwear jobs are monotonous and uncomfortable (as they’ve been since the Victorian era). Under the worst, they can be degrading and life-threatening. Nonetheless, Cambodia’s 630,000 textile and footwear workers have prospered. From 2014 to 2015, their average wage rose from $145 a month to $175, in a country where per-capita income is about $1,000 a year. That trend has repeated itself across Asia, especially in the great garment-making centres of China and Vietnam.
Low, but rising wages at a time of falling prices? Something has had to give. That’s how the downward spiral now picking up speed across Asia first began:
Increasing competition from low-wage economies has pushed down garment prices worldwide. The average cost of clothing exported from Cambodia to the U.S. fell by 24 percent between 2006 and 2015. For a manufacturer, that’d be hard to swallow if wages were static; when wages are rising, it threatens to become a crisis.
Caught in that rising wages/falling price vise, and given that they had little leverage against the brands [Nike etc] Asia’s garment-makers themselves began the resort to automation which is, as Bloomberg also points out, the ultimate productivity booster. Asia now stands to bear the full impact as this process gathers up pace :
The economics for brands and retailers to place local manufacturing centres closer to major markets will become stronger, making next day delivery possible for consumers. Because of this potential to please consumers in ways previously not possible, big players are re-evaluating their supply chain to cope with faster product design, personalization and production cycles. ASEAN factories that form part of the current off-shored supplier model will increasingly be less needed.
Obviously, this process will generate a great deal of suffering – and social instability – in what were already poor and politically unstable countries.
Money for Miramar
Here’s an interesting story from the local government campaign trail, in Wellington. Mayoral aspirant Nick Leggett has vowed to shut down what he calls a $3 million ‘slush fund’ whereby a group within the Wellington City Council doles out public funds to those it deems worthy, even if in some cases it also refuses for reasons of commercial sensitivity(!) to disclose exactly how much some recipients have received, or what kind of return the public got from its fund investments. (In fact, the group of councillors involved reportedly have to sign a confidentiality agreement not to disclose to ratepayers how they’d disbursed the cash.)
Among the recipients is the Miramar Film Events Trust, which was given $95,000. Go to the Miramar Events Trust website and you find a front page featuring a photo of Oscar winning editor and Roxy Theatre/CoCo restaurant co-founder Jamie Selkirk, Roxy theatre/CoCo restaurant co-owner Valentina Dias and Trust manager Kristy Grant, who is responsible for the overall management of the Trust and its projects, notably including the Roxy5 Short Film Competition – a schools based film competition run in conjunction with Capital E and which culminates in an annual gala premiere held in May at… the Roxy theatre/CoCo restaurant complex. Among the other worthy projects cited on the Trust website is the Miramarvellous Festival, which (among other things) celebrates local restaurants, with the CoCo restaurant prominently featured.
Grand. The charitable activities being subsidised by Council do seem to be linked fairly openly to the businesses run by the people behind the Trust. So I guess everyone’s a winner, right? Although $95,000 does seem quite a lot when the Council donates say, only $5,000 towards the Wellington International Film Festival.
Oh, and Nick Leggett will not exactly be shutting down the so-called slush fund, if and when he’s elected mayor on October 8. Reportedly, Leggett is “pledging to abolish [the fund] and redirect the ratepayer cash into a strategy for tackling the “challenges” faced by Wellington’s CBD.” Which is quite different. Or kind of different. Or not at all different.
Gospel to soul, and beyond
For decades, people have recognised the role the black church played in the formation of soul, and in influencing subsequent forms of secular music. Here’s a classic example of the crossover. From 1909, here are the Fisk Jubilee Singers doing the spiritual ‘Couldn’t Hear Nobody Pray’
While still in church in 1964, the Womack brothers did their own arrangement of ‘Couldn’t Hear Nobody Pray’
Shortly afterwards the Womacks began to call themselves the Valentinos; they wrote secular lyrics to the same old tune, called it ‘Lookin’ For A Love’ and enjoyed a minor mid-1960s soul hit with it. Finally, in the early 1970s, Bobby Womack had a huge international hit with a revival of the same old song. The song had travelled a long way – and in some respects, no distance at all – from church.