Out of the Traps is an article published by The Economist on October 7, 2017. This article analyzes the issue of emerging markets from several different perspectives. It reflects on the role of the USA in forming up and affecting the global economy, tying it in with the careless moves of the newly-elected president Trump in the international arena. While the plethora of issues and facts brought up in this special report is abundant and interesting, some ideas it presented can be considered questionable. In this part of my assignment, I want to discuss a statement made about the threat of the emerging robotic technologies towards cheap labor – one of the main commodities provided by the emerging markets.
The exact quote goes like this: “The growing versatility and user-friendliness of robotic technology may be eroding the advantages of cheap labor, resulting in what economists call “premature deindustrialization.” Post-industrial rustbelts are common in rich economies like America. The fear is that emerging-market industries will turn rusty before their people grow rich” (“Out of the Traps”).
I can’t entirely agree with this assessment of the situation. Advances in robotic technology, just like any other technological advances that happened in the past 300 years, have never eroded the advantages of cheap labor. They have eroded the value of intensive labor and unskilled labor. When hearing the words “cheap labor,” the immediate association that appears is a hundred Chinese workers toiling at a low-key factory 12 hours a day using outdated technology and some of the simplest of tools. This notion is as inaccurate as it is outdated. The modern meaning of cheap labor is applied to any labor that can be bought cheaply. This applies to high-skilled labor as well.
In the 21st century, one robotic assembly line may replace a thousand unskilled laborers. However, that assembly line will require a highly skilled operator and a team of engineers and experts to maintain its functionality. These specialists, although few in number, will require as much payment as much money as a brigade of unskilled workers. In short, cheap labor is changing from quantity towards quality. And the majority of emerging economies are aware of that. Chinese education is not what it was 30 years ago. China is investing in universities and colleges and sends many of its students abroad for study, only for them to return home with newly-acquired skills. The majority of automated or partially-automated assembly lines are now located in China. Even Apple, which is considered the most American company ever, moved most of its production lines to China. The same goes for almost every automobile concern in the world. Other emerging economies, such as Russia, India, Eastern-European countries, etc., are also following this trend.
I believe that the author chose to include this statement in this report because it fits the overall narrative of the story. The author tries to warn potential investors to withhold from putting money into emerging economies and cites numerous examples from the past and present to convince them to practice patience. While I agree with the general idea of this article, I think that using questionable points like this one to support the narrative is not helping the author’s case.
Works Cited
“Out of the Traps.” The Economist, 2017, Web.