On the income statement employees are a cost. Sometimes they can really be a cost.
From Rest of World, June 6:
The Serious Disasters Punishment Act was meant to be a triumph for workers' safety. Instead, it's spurring companies to erase staff
Kim Yong-rae is the CEO of Speefox, South Korea’s biggest manufacturer of capacitors, and he thinks robots are key to the company’s survival. On his factory floor, free-standing machines squeal as they spit out gleaming sheets of aluminum that roll into coils.
The air is filled with the rhythmic thud of stamping and the buzzing of machinery moving continuously, on the ground and overhead. Capacitors are essential to almost every electronic device, and these will end up in thousands of smartphones, cameras, and home appliances.
“Throughout our history, we’ve always had to find ways to stay ahead,” Kim told Rest of World. “Automation is the next step in that process.”
Speefox’s factory is 75% automated, representing South Korea’s continued push away from human labor. Part of that drive is labor costs: South Korea’s minimum wage has climbed, rising 5% just this year.
But the most recent impetus is legal liability for worker death or injury. In January, a law came into effect called the Serious Disasters Punishment Act, which says, effectively, that if workers die or sustain serious injuries on the job, and courts determine that the company neglected safety standards, the CEO or high-ranking managers could be fined or go to prison.
Experts and local media say that the law has shaken the heavy industry and construction sectors. Along with pushing the companies to invest to make workplaces safer, they point out, it’s triggered a ramp-up of automation in order to require fewer workers — or, ideally, none at all....*****....“Companies are moving to reduce human labor,” Jung Jin-woo, a Seoul National University of Science & Technology professor who studies occupational safety and has been following businesses’ reaction to the law, told Rest of World. “There’s also hesitation to jump into any high-risk projects.”....
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