The impending job losses the so-called bots are set to bring, according to global risk analytics firm Verisk Maplecroft, are expected to produce a spike in slavery and labor abuses across global supply chains.
“Automation is revolutionizing routine manufacturing processes and lowering labor costs to the extent that companies in China, and even the U.S. may be able to undercut cheaper rivals,” Verisk Maplecroft noted in its annual Human Rights Outlook report released Thursday.
According to International Labour Organization (ILO) estimates, 56 percent of workers in key apparel sourcing countries, including Cambodia, Indonesia, Thailand, the Philippines and Vietnam (the ASEAN-5), will lose their jobs to automation by 2040. And according to Verisk, if governments don’t take early measures to address displaced workers, these manufacturing countries — and the brands and retailers that source from them — could be facing an unethical labor mess.
“Displaced workers without the skills to adapt or the cushion of social security will have to compete for a diminishing supply of low-paid, low-skilled work in what will likely be an increasingly exploitative environment,” said Verisk Maplecroft’s Head of Human Rights, Dr. Alexandra Channer. “Without concrete measures from governments to adapt and educate future generations to function alongside machines, it could be a race to the bottom for many workers.”
Because of their reliance on low-skilled labor and the already apparent labor rights violations in the ASEAN-5, Verisk said these countries will be particularly at risk when the impact of automation starts to fully set in.
“In Vietnam, for example, 67 percent of workers — 36 million people — will be seeking alternative livelihoods in an environment where the risk of exploitation is already high,” Verisk said.
The apparel, textile and footwear industry employs 39 percent of all manufacturing workers in Vietnam, and the number climbs to a higher 59 percent for Cambodia. In both countries, 85 percent of jobs in the sector are at “high risk” of automation, according to Verisk.
“Any job displacement from this sector will therefore impact a large proportion of the entire manufacturing workforce, the majority of which are women,” Verisk said. “That means roughly 2.6 million Vietnamese women and over 600,000 Cambodian women will lose their jobs and compete for work in an industry already exposed to a high risk of labor violations across the ASEAN-5. With fewer women in work — or more women forced into slavery — these countries will struggle to achieve SDG [UN Sustainable Development Goals] gender equality goals.”
More than acknowledge the expected impact of automation on apparel supply chains globally, companies need to plan for it.
“The adoption of automation technologies by companies will be gradual, but the unintended consequences for millions of workers in brand supply chains is likely to be severe,” Channer said. “Responsible sourcing departments, in particular, need to identify and understand the adverse effects of automation on human rights, and work with civil society and governments to mitigate the impacts within their own supply chains.”
Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.