In response to rising wage costs in Indonesia, Nike is cutting the number of workers in its factories there, turning instead toward cutting-edge manufacturing technology. The FT reports that the company is now using 3D printing to make “prototype soles” and is exploring other ways to “engineer the labor out of the product.”
The upward pressure on labor costs in Asia is not a new development: Workers across the continent have been demanding better wages and working conditions for some time now. The most dramatic signal of this trend is the recent kidnapping of Chip Starnes by employees at his China factory, who demanded he pay them generous severance packages before they released him (even though he wasn’t firing any of them).
Asian workers have scored some victories in rising wages, but many are learning something the West has known for some time: Employers will seek out the cheapest labor on offer, and machines are even cheaper than an underpaid human. In the late 20th century, manufacturing jobs shifted from America to China, then from China to Southeast Asia, and now even those are being automated.
For America, at least, this trend shouldn’t be so disconcerting. After all, it’s developed economies like ours that are designing the robots Nike is now using. Low-wage manufacturing jobs are drying up, but they’re being replaced by jobs in building, operating, and repairing the tech in question. Increasingly, companies will be likely to “onshore” these jobs to America, when shipping and distribution becomes much easier and cheaper. Manufacturing, it seems, will come full circle.
[Chinese factory workers image courtesy of Shutterstock]