Automation puts supply chain workers at high risk for exploitation

Dive Brief:

The growth of automation in the workplace increases the risks of exploitative work and modern slavery in the supply chain, according to Verisk Maplecroft's 2018 Human Rights Outlook released Thursday.
Machines conducting routine tasks will drive down labor costs, leading workers to compete for fewer jobs at lower wages, the analysis said.
Workers in developing economies are particularly at risk. The International Labor Organization (ILO) estimates 56% of workers in the ASEAN-5 — which includes Cambodia, Indonesia, Thailand, the Philippines and Vietnam — will lose their jobs to automation by 2040.

Dive Insight:

As companies scale up their use of automation, they'll create new jobs with different skill sets, putting unskilled jobs on the chopping block. When that happens, supply chain workers will be forced to compete in the ranks of robots for fewer jobs at lower wages.

Garment, textile and footwear (GTF) jobs are at high risk of automation, as "sewbots" rise in popularity and major apparel manufacturers, such as Nike and Adidas, move to automate their factories.

If jobs are shifted to automation, 2.6 million Vietnamese women could lose their jobs, the report said. The finding is troubling as many business are sourcing more products from Vietnam, especially as a trade war brews between the U.S. and China.

Vietnamese workers face risk of exploitation — Verisk Maplecroft

And it's not just the ASEAN-5 — later this year, a factory will open in Arkansas where robots sew garments from start to finish without any aid from a worker. "The dark side of automation could therefore mean fewer alternatives to exploitative work and a spiral into modern slavery that renders the SDG [sustainable development goals] targets irrelevant," Verisk Maplecroft said in its report.

Preventing worker exploitation and forced labor has come into the spotlight, as many companies move away from a low-cost-at-all-cost model. But the decision to automate is a matter of balance.

Automated facilities carry myriad benefits, from cost savings to consistency in product quality to shorter lead times. But automation comes with the social cost of "large numbers of low-skilled workers who depend on brand supply chains for jobs ... at risk of losing their livelihoods," the report said.

While some responsibility lies within national governments to reskill workers and prevent job loss, businesses can play a role in preserving work in their global supply chains.

"The scope of the impact on millions of workers in supply chains built specifically to service the brand will raise alarm bells," the report said.