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In China, the dark side of robotization of production has been revealed: people work more, get less and are fired more often.

Published: 2022-12-07

A panel of experts from the US, Canada and China analyzed China's workforce data as factory automation accelerates. It turned out that against the background of increased labor productivity, there were problems with employment, employment, income, and even with an increase in the birth rate.

Researchers from the University of Pittsburgh, Tsinghua University and the University of Toronto studied the data as part of China's five-year plan from 2016 to 2020 to increase factory automation. In these years, record amounts have been allocated for the robotization of industry in order to put China at the forefront of the new industrial revolution.

According to experts, China has the largest number of industrial robots in the world - about 943,200 units. At the same time, in terms of the number of robots per capita, China is far from the first place. South Korea, Singapore, Japan, Germany and Sweden have the most robots per 10,000 workers, followed by Hong Kong, the US, Taiwan and China, according to the International Federation of Robotics.

However, based on 2016 data, experts conclude that up to 77% of jobs in China are “prone to automation”. A striking example of this is the situation at Foxconn, where Apple products are assembled. In particular, from 2012 to 2016, the iPhone maker replaced more than 400,000 workers with robots with the goal of achieving 30 percent factory automation by 2020. In parallel, the experts analyzed another study that studied the state of families in China for the period from 2010 to 2016 (China Family Panel Studies).

According to the collected statistics, an increase in robotization by one standard deviation reduces the likelihood of a person being employed by 6%, increases the likelihood of quitting any work activity by 1%, and increases the likelihood of reporting unemployment status by 5%.

In addition, robots reduce hourly income by 9%, although this effect does not reduce income for the year. But it does not reduce for only one reason - people, as a rule, with low qualifications and age, start working more hours (+14%) to compensate for the decrease in wages.

Families are also starting to get into debt, compensating for the lack of funds "selected" by robots by borrowing (+10%). Finally, automation reduces the number of children in the family by 1.2% and forces more people to spend on children already in the family. More goes to education (+10%) and more goes to extra-curricular education (+24%).

The authors of the study conclude that if automation does not create additional jobs, then its consequences can be negative for society. This is especially important for developing countries, where inequality can be particularly strong.