Stitches

Here’s the real headline: it’s decreasingly the impact of globalization that is reconfiguring the job market; today, it’s all about automation. The shift has been most dramatic in manufacturing, replacing every level of skillset – from cheap third world manual labor assembly lines to the most sophisticated, custom computer-designed manufacturing robotic machines. It has seeped into even higher level arenas – financial analysis as well as investment planning and implementation to surgery – as well as fields that one would think cannot be taken over by robots and automated systems – like construction, mining, oil extraction and stoop labor farm work.

The promise of “reshoring” (bringing manufacturing back to the U.S.) under the notion of U.S. job creation is beyond empty these days. No business with an ounce of economic understanding is going to take cheap-labor overseas manufacturing and bring it back into the United States with the same extent of vastly more expensive labor. And with Congress pretty much telling Mr. Trump that they are not open to punitive duties on American companies who manufacture abroad, the only kinds of manufacturing returning to the United States is driven by the elimination and substitution of labor by automated machinery. And more and more, that automation includes the ability to “learn” and improve the process without human intervention. Artificial Intelligence (AI).

In other words, income inequality fans, the folks who benefit most from reshoring are those who own those sophisticated and automated manufacturing systems – wealthy owners of companies and their financial support communities – and those who lose the most are the displaced workers. Sure reshoring creates a few jobs, a couple of supervisors, monitors and maintenance workers (and even those jobs are getting reduced as artificial intelligence grows), but the number of people required in the manufacturing process is dropping like a stone.

Reshoring creates the economic anomaly of a rising stock market (which appears to be in a bubble anyway) and a falling unemployment rate – all generally accepted measures of a successful economy – when in reality life for average working Americans is becoming increasingly challenging. The kinds of jobs that are growing are hardly the high-paying work with solid opportunities for advancement, the kinds of jobs that create more opportunities for U.S. job creation; they tend to be in low-level service sectors. For more specifics, please see my August 13^th Jobs, Jobs, Jobs – Tips, Tips, Tips blog.

The notions of job security and a general expectation of there always being available work are dying fast. That nagging fear, especially for older workers finding that their skillsets are obsolete, is one of the great driving forces behind the success of Donald Trump’s populism, even though he is exceptionally unlikely to be able to deliver on the majority of his economic benefit promises to the vast horde of displaced workers in his base. Nothing brings this reality home – that it’s no longer a job threat from globalization – more than an example presented by Adele Peters in the August 25^th FastCompany.com: her description of a fully-automated, smart and AI-driven, sewing manufacturing system that even threatens those notorious sewing mills in countries like Bangladesh (above left).

They’re called “SewBots” (above right), and they are built and programmed by an Atlanta, Georgia, SoftWear Automation. It took ten years to develop, primarily through Georgia Tech’s Advanced Technology Development Center(with a Department of Defense DARPA innovation grant), but the system is stunning in what it can do… and for the longer-term impact on the global notion of labor itself.

These machines manipulate fabrics with macro and micro movements through the cutting and stitching process via computer-controlled suction elements built into a table. That table feeds the cutting and stitching robots that actually do the physical work. The computerized instructions can be configured to implement very different results: sizing and the actual nature of the item of clothing being made. Jeans, T-shirts, dresses, etc. Visually-based sensors measure quality and effectiveness, making all required adjustments in real time. Oddly, this system not only implements those computerized instructions but is fully capable, on its own with no further programming instructions, of improving the manufacturing process, making it faster and more efficient. Artificial intelligence.

This equipment is not just something that developed countries need to compete with nations with traditional cheap labor; even countries with cheap labor are taking notice, realizing that they can replicate or improve their cost structures right in their customers’ backyards: “When the Chinese clothing manufacturer Tianyuan Garments Company opens its newest factory in 2018, it will be in Arkansas, not China, and instead of workers hunched over sewing machines, the factory will be filled with fully autonomous robots and their human supervisors.

“Once the system is fully operational, each of the 21 production lines in the factory will be capable of making 1.2 million T-shirts a year, at a total cost of production that can compete in terms of cost with apparel companies that manufacture and ship clothing from the lowest-wage countries in the world. The factory will be one of the first to use a technology that could herald immense changes in how the apparel industry works.” FastCompany.com.

The managers of SoftWear Automation argue that there will still be room for high-end custom work to be manufactured by hand and that the subsistence workers engaged in the repetitive and routine manufacturing mills in third world countries will be released to more artisanal work at higher wages. Really? “In practice, the transition is likely to be messier. Sewing robots may only threaten certain jobs in developing countries; the machines are expensive (the company  [SoftWear Automation] won’t disclose the cost) and the company is initially only selling them in the U.S., where manufacturers can save money on the total process because they can avoid factors such as higher industrial electricity bills in some other countries, and can benefit from a ‘Made in USA’ label (the military, for example, is required to buy clothing that’s made in the U.S., while factories that can produce that clothing are dwindling, and the average garment worker is nearing retirement).

“They can also have faster turnarounds on orders. For factories in India or China producing cheap T-shirts for a local market, cheap local labor will still make more sense than investing in robots. But some jobs are likely to be displaced. That displacement may grow as others develop similar technology and the cost drops. Another designer is also working on a T-shirt-sewing robot. Amazon filed a patent in April 2017 for ‘stitch on demand’ technology’ that would sew clothing after an order is placed.” But as with any technology, the cost of this equipment will, inevitably, fall considerably.

These trends are rather quickly and dramatically redefining one small industry. Alone, such technology will displace millions of workers, sooner or later. But this kind of technological automation is also rapidly migrating to every form of manufacturing… and accelerating fast within the highly-skilled white collar community as well. That notion will displace millions, even billions, of workers in every facet of just about every industry… everywhere… sooner or later. With fewer people working, who exactly will be able to purchase all these new, cheaper goods?

I’m Peter Dekom, and we have so far failed to address this inevitability and plan for its impact, suggesting that the results of conflicts with angry populists seeking to turn the clock back to Make America Great again, without any realistic chance of succeeding, will only grow.