Why Don't Workers Fight for the ‘Robot Dividend’?

Abstract

Since 2015, ‘workerless factories’ have surfaced in various industrial zones in China, capturing media attention. In one case, on the shop floor of a mobile phone module manufacturer, conveyor belts were staffed not by dispirited and sweating workers, but by robots executing repetitive pre-programmed tasks. China became the largest market for industrial robots in 2013. This wave of robotisation is largely triggered by the rising labour costs and growing labour activism. By 2019, 140,500 new robots were sold nationwide—a twofold increase from five years earlier. While media touted how industrial automation pushed Chinese economy to shift from leveraging its ‘labour divided’ to developing a ‘robot dividend’, labour scholars and activists began to wonder how workers could gain a fair share of the ‘robot dividend.’ Recent research has confirmed that in some firms that adopted robots, wage increases lagged far behind the growth of productivity, while in others, wages remained stagnant or were even slashed. It is obvious that the growing wave of labour insurgencies that spread China in the early 2010s was not extended to struggles over labour’s benefits in technological upgrading. Why? Industrial Automation’s Impact on Employment and Skills Even in firms less extreme than the ‘workerless factories’, the power of industrial automation to slash labour is very dramatic. My own research in four factories in a city in South China identifies a dramatic reduction in labour demand, ranging between 67 and 85 percent cut per production line. A recent study of 299 manufacturing firms that adopted technological upgrading in Guangdong Province showed each firm fired an average of ninety-six employees, accounting for 9.58 percent of the total workforce. On the shop floor, about 80 percent of positions could easily be replaced with machines1. However, so far, we have not witnessed a large number of the workers made redundant by technological upgrading being thrown on to the streets. There are several reasons. First, firms upgraded their equipment gradually rather than resorting to wholesale shifts to new automated lines. Such incremental arrangements gave companies time to adjust workers’ positions and limit new recruitment. Second, taking advantage of migrant workers’ high turnover rate and specific wage structure, most employers did not have to actively dismiss workers, but used other tactics—e.g. slashing overtime work hours--- to force workers to quit on their own initiative. Third, a few firms were able to absorb the surplus labour by expanding their production lines; however, that is contingent on the firm’s position in the value chain as well as its broader market status. The impact of automation on workers’ skills is equally controversial. Although technological upgrading has the potential of upgrading workers’ skills, the outcome is highly contingent. My research has discovered that skilled workers are often the main target for job replacement due to their high wages and enhanced bargaining power. Another research has revealed that women workers are offered much less in-house training than their male counterparts because most employers uphold an ideology of gender stereotyping that considers women to be ‘fearful of machines’ or deficient in logical thinking2. Considering that China’s past development path has hinged on labour-intensive production positioned in the low-end of global commodity chain, many manufacturers are either slow or reluctant to take up labour retraining. Among the eight manufacturers I studied, only one invested in training workers, and this was because the company engages in high-precision metalwork that requires substantial levels of skill in the production process. Mr Zhou, the owner of a firm that produces highend parts for optical-fibre communication equipment, chose to automate to achieve quality improvement, not just larger output. Building on his previous experience working in a state-owned enterprise, he set up an in-house apprenticeship program to train skilled workers. He stated: ‘Machinery is something everybody can buy, but a good production process needs to be designed. One component is hardware and the other is software.’ As a small and medium-sized enterprise, the case of Mr Zhou’s company is quite exceptional. Given the high turnover rate, very few employers in Dongguan are willing to invest in workers’ training. Workers’ Reactions to Technological Upgrading How have...