Robots and the unreasonable labor force

Amid all disgusts, frustrations and furies over the burial of the country’s former president, Ferdinand E. Marcos, some important developments and policy briefs that are of much significance are overlooked.  These are information that shall surely give us so much to ponder on and shall certainly affect us now and in the future.

For one, the United Nations Conference on Trade and Development (UNCTAD) issued last month a policy brief (Policy Brief No. 50) entitled “Robots and Industrialization in the Developing Countries”.  Among others, it stressed that “Increased use of robots in developed countries erodes traditional labor-cost advantage of developing countries.    Thus, it advised that “Developing countries need to redesign education policies and embrace the digital revolution – this approach should be combined with supportive macroeconomic, industrial and social policies.”

This development, coupled with the call of newly elected US President Donald Trump (similar to the rhetoric of President Obama in the 2012 election) of bringing American companies’ outsourced jobs back to his country, will really make us shiver in fear.

To recall, early in 2012, he (Obama) enjoined American businessmen to invest in America at the White House "Insourcing American Jobs" Forum.  Then, the forum focused on “the increasing trend of insourcing – where companies are bringing jobs back to the USA and making additional investments in America”.

Among others, the companies that had representations then were Ford of the Americas, DuPont, Otis Elevator Company, Intel, ThyssenKrupp, Rolls Royce, Master Lock, Lincolnton Furniture, GalaxE Solutions, AGS, KEEN and Chesapeake Bay Candle.  These companies’ representatives made strong commitments to bring jobs back to the USA.

Looking at the aforementioned companies’ names, not anyone of us may chill, well, in 2012. After all, these companies were manufacturers and do not have significant plants in the country that may have to close down.  However, with the growing popularity of robots and the rabble rousing approaches of some labor groups in demanding unreasonable  pay hikes, some foreign companies in our export processing zones may just go back to their origins.  Or, at the very least, employ robots either to replace retiring workers or meet new requirements (for expansions). 

To recall, several business groups (including those based in the export processing zones) raised their concerns on the wage increases demanded by the Trade Union Congress of the Philippines (TUCP) and Alliance of Progressive Labor (APL).  Records show that TUCP and APL were seeking for P161.00 and  P140.00 across-the-board daily wage increases, respectively, in Region 7. 

As we all know, demands like these from different labor unions and coalitions for increases in the country’s minimum wages will always be unrealistic.  Thus, business groups (foreign and local) have always reacted against the labor groups’ demands. 

Henceforth, our labor groups must rethink their approaches.  Remember, the use of robots is slowly becoming prevalent.  For one, UNCTAD reported that each year, since 2013, “China has bought more industrial robots than any other country”.   It further said that by the end of 2016, “it is likely to overtake Japan as the world's biggest operator of industrial robots, the policy brief says”.  This is an attestation of robots’ growing popularity.   Therefore, for other countries (especially those with very high wages) to be more competitive, they might just follow China’s and Japan’s lead.

Sadly, this is bad news for us.  Remember, we have yet to address our current jobless woes.  It might even worsen if our pissed-off moneyed Filipino-owned companies will even go for it (robots).  In both instances, we shall suffer from unemployment woes.

So that, let us not give these foreign investors a viable reason to either leave this country and bring their manufacturing operations back to their homeland or transfer to other developed countries. More importantly, let us not give our domestic companies enough justification to employ robots instead.  How?  By being reasonable.