Will Foxconn Automation Help (Improve Working Conditions While Creating Cheaper Labor-Saving and Communication Devices?) Or Hurt (Lead To Job Losses?)?

At the end of July 2012 Terry Gou, the founder and chairman of the the world's largest maker of computer components Taiwanese technology giant Foxconn, announced a plan to purchase 1 million robots over the next three years. That means that by the end of 2013 Foxconn will have 300,000 robots performing repetitive tasks like spraying, welding and assembling which are now mainly conducted by workers.

One immediate result of the transition to an automated workforce at Foxconn may be that many low and moderately skilled workers will lose their jobs. And the numbers at Foxconn (currently employing around 1.2 million people, with about 1 million of them based on the Chinese mainland) are suggestive of just how turbulent the transition to this new level of automation may be for workers without advanced training at Foxconn and across other industries that will be automating in the next few years.

In the short term, many new jobs may be created. For example, the changes at Foxconn will require workers who can design, manufacture and operate robots. But in the long run, technological progress (while reducing injuries to workers and boredom while increasing productivity and corporate profits) may leave many less-educated workers worse off.

History tells us that not everyone benefits equally from technological progress. For example, over the past 50 years weekly wages for US workers without a high school degree have fallen and wages for those with a high school degree or a high school degree and only some college have stalled.

As technology replaces labor, the skilled workers and owners of the machines benefit - while the low-skilled workers (like the workers at Foxconn replaced by labor-saving robots?) may find it increasingly difficult to get another job.