Technology

To Comment on this article Click Here

If you live long enough, you see the ebb and flow of many things.  Events seem to have a cyclic nature to them.  The struggle of workers to achieve dignity is a constant, however.

When concentration of wealth in a small percentage of the population reaches a certain point, an increase in tensions and the fabric of the economy starts to shred.  The recent deep world-wide depression called a recession has made this clear. 

Canada, so far, has escaped some of this, but the signs are not good, with the great northern democracy's economy shrinking by 1/10 of one percent in the second quarter.  Two straight shrinking quarters would put Canada in a technical recession. 

The big neighbour to the south has not done well, nor has Europe and the far east.  The US economy is still growing, but at a rate that does not fuel jobs in North America.  US companies have vaults of money, but they are not spending it, nor are they paying taxes as they play tax chess with low tax countries.

A living wage and a strong middle class with low unemployment is what makes possible a quality of life that is expected by human beings out of the dark ages.  Even the super rich acknowledge this as they tear up their tax obligations by moving money and company  logos off shore.

The Lords of the Manor knew this. Warren Buffet, Steve Jobs and Bill Gates know this.   The wealth of the super rich is accelerating.  The above three are alarmed by this.  Moving money around is taxed less than spending it in the United States.

The use of technology has really made big inroads in productivity and this means that some classifications of workers become redundant.  Is high unemployment and concentration of wealth inevitable?  Are we creating a new class of the super poor?

This has seemed to rush upon us.  Why is this so?  The real reason is that technology really did not have much influence on productivity in the past despite the hype, but now it does.  Computers are really making a difference and this is reflected in the high and unacceptable unemployment rate in the United States that stands at 9.1% with zero jobs being created in the in the month of August.  Although the hype was there going back to the late 1960's, the reality of technological impact has taken place in the last few years.

The US requires from 200,000 to 250,000 jobs to be created each quarter to keep up with retirement and fund government programs.  After all it is a balance of income to a government that comes in the form of growth and wise spending that controls deficits.  

The US national debt is about $15 Trillion, while the gross domestic product (GDP) is about the same number.  Japan has twice the debt to GDP ratio that the US does.  Japan has not fully recovered from their 1990's recession.  Canada's debt to GDP ratio is about 30%, which is very good at present.  This is down from its 1995 ratio of about 70%

Is the deficit the problem or is it revenue and the rate of change of the deficit?  Simplifying things to a household as a basic economic unit, we would not be alarmed if a family had an income of $100,000 and a long term debt of $100,000.  We would be concerned if the debt was rising $15,000 per year, however with income stagnant.

So what has technology done to the working family?  It has allowed work to be distributed across the world.  Concentrations of industry in tight geographic areas is no longer essential and this has made it possible for companies to move plants and acquire work forces across the globe to get things done cheaper or so they believe.  This has made a big impact on the life of the middle class in North America.

So who gets the blame for all this?  Is it the teacher's unions?  They seem to attract a lot if unwarranted ire from people who should know better and have never taught a child to read.  The cost of education is a good investment for all of us, but it hardly gets a ripple of real attention. 

Have you gone to a Bluewater School Board meeting lately?  They have a big debt and they are always trying to cut things.  You can help by paying attention even if you no longer have children in the system.  Constant cutbacks in school budgets and pressure on teacher salaries has been due to our lack of attention to what's going on in schools, not the teachers unions. 

Even if we no longer have kids in school, education influences our life  more than we think.  It even reaches out to our costs relative to law enforcement.  A poorly educated child with no job prospects is ripe for trouble with the law.

Does our School Board use technology to contain costs?  The new board building in Chesley says no!  With the Internet, much of the administration could have been distributed to homes and the old building would have been fine for concentrated staff and meeting rooms.

How about our industry?  Don't you think we can compete with workers any place in the world?  Are our toolmakers and their ability to use modern technology limited?  The answer is no!  Lots of technology has been moved to India, Taiwan and China.  Much of what is done there is automated, so why is it done there and not in North America?

There is something in the wind, however.  Companies are finding it more and more difficult to deal with a work forces and management half-way around the world, when the end result is an automated process anyway.  Wages in India and China are increasing and problems with pollution, safety and worker health care and compensation are quickly showing that all across the seas is not simple.  It's not a simple matter of a call centre in Manila taking jobs away from Canadian workers.

The reason we ignore things seems to be due to apathy on the part of our populace and a certain stigma to collective bargaining and unions.  We are too quick to say:  "Move it or lose it"  The truth is that unions know more about technology than the general populace and many of the executives in companies.  They have to deal with it as their members use it and are the target of it too.  They know where it will help because they study it deeply.  Ask your friendly CAW representative about it.

In the recent saving of General Motors in the United States, which has proved  successful so far, it was shown that the average UAW worker makes $56,000/year with health care that is comparable to OHIP in Ontario, but paid for by the company and workers together.  The UAW gave up a lot in the benefits area to help out.

There is a misapprehension that unions don't want technology.  That is not the case.  They recognize that it is here to stay.   They realize they cannot fight it, but they have to understand it and train for it. What they want is a chance to use it and improve the process whereby it is utilized.  They want to win as much as the stockholder and the bonus driven executive.  While the executive lives quarter to quarter an the bonus and bottom line, the workers wants 30 years of a good job to educate and feed their families.  Unions want to have a steady work force that is compensated, pays their dues and retires and is able to take care of themselves.

Here is an example of automation and innovation.

Why should the popular recreation shoe called Crocs be made in Asia unless it is being shipped to Asia?  A trite answer would be it's cheaper to make in Asia regardless of where it is shipped or the cost of shipping.   Let's look at the facts:

• Crocs was originally conceived by a Canadian Company called "Foam Creations".
• It was popularized and modified by three friends Scott Seamans, George Boedecker and Lyndon Hanson, who bought out the original company and knew how to market and manufacture.  The headquarters are in Colorado.
• They manufacture all over the world including China.

Now, it's clear that the manufacturing of Crocs can be fully automated.  It's a relatively simple process.  One asks the question:  Does it make sense in any way to make a Croc in China and ship it to North America for cost reasons?

No, because the process is automated and you can produce thousands of Crocs in any colour you want using automation in any town in the world.  Somebody has to pack them, but that's partially automated too.  So it would be cheaper to make a Croc in North America and ship it to North America and make a Croc in China and ship it to the far east.

It's so easy to do that Crocs has been faced with fighting 'knock-offs' all over the world. To see the shoe is to see automation written all over it. Their big problem is not cost to manufacture, but infringement of their design and technical patents, by Asian based companies who don't do the market research or technical research.  They just make the knock-off and ship it.  It's like putting up a sign in an Asian marketplace that says:  "Genuine Asian knock-off Rolex Watches sold here!"

So on Labour Day 2011 let's have an open mind about doing work here in North America.  Lot's of manufacturers use automation and people too.  Who, but people, can buy Crocs?  Have you ever seen a many robots wearing them?

^{for world news, books, sports, movies ...}

Monday, September 05, 2011