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NAFTA did not cost millions of American jobs. Government regulations and taxation cost millions of American jobs. Wage costs are not the primary reason most employers move overseas, its business friendly governments and hands off approach. Go try and open a new factory in the states, by the time you get the required permits and EPA approval close to 10 equivalent factories would have been built in Mexico or China. Putting taxes on imports is equivalent to placing yourself under embargo.
The biggest thing American business should be protesting is foreign governments blocking American made goods from entering the marketplace and at home the tax/regulation burden that business's face.
the truth is we all buy foreign made goods for one reason. we perceive whatever it is we are buying to be the best value for our money..
it elevates our standard of living many times and gives us world class products at an affordable price.
anyone want to guess what kind of inflation we would be seeing here with the 50-100% rise in many commodities if it wasnt for far cheaper labor then we can provide here?
regardless of whether the emperor of japan ever orders something from me or i can sell my goods in another country is really a moot point as to why i buy from a particular country.
anyone want to guess what kind of inflation we would be seeing here with the 50-100% rise in many commodities if it wasnt for far cheaper labor then we can provide here?
I don't have to guess, I've involved with US based manufacturing and commodities have indeed gone up 50~100%+. Over the last 1~2 years wholesale material for effected items has gone up around 12~20%, foreign suppliers prices have actually gone up more than domestic which probably has something to do with transportation costs. Anyhow, to keep the same margins an increase of around 3~4% in retail costs would be required.
So the answer is...about the same as we're seeing now: not much at all.
So they traded away their livelihood, lands, and eventually their lives for $24 in cheap trash trinkets imported from overseas. How do you think they enjoyed that "higher standard of living" that $24 worth of imported trash trinkets brought them?
Amazing to watch this happen in the here and now. Must be a cross between Karma and deja vu, but the business morons will actually trade US away for trinkets and beads, like the Indian Chiefs of before.
I don't have to guess, I've involved with US based manufacturing and commodities have indeed gone up 50~100%+. Over the last 1~2 years wholesale material for effected items has gone up around 12~20%, foreign suppliers prices have actually gone up more than domestic which probably has something to do with transportation costs. Anyhow, to keep the same margins an increase of around 3~4% in retail costs would be required.
So the answer is...about the same as we're seeing now: not much at all.
labor costs and production costs are the biggest part of a price.. transportation and advertising are 2nd. prices would be much much higher then they are if labor costs were higher... right now labor costs in china plus transportation dont come close to what labor and production costs would run us here in my company trying to make the parts here..
labor costs and production costs are the biggest part of a price.. transportation and advertising are 2nd.
I love how you state "facts" that are nothing more than useless generalities. Every business is different, for some raw commodities are the "biggest part of the price" for others its R&D, etc. It all depends on the business.
Quote:
Originally Posted by mathjak107
prices would be much much higher then they are if labor costs were higher...
You spoke about commodity costs...now you are talking about labor costs. For me the labor costs as a percentage of retail price is around 2-3%.
Quote:
Originally Posted by mathjak107
right now labor costs in china plus transportation dont come close to what labor and production costs would run us here in my company trying to make the parts here..
So what? What does that have to do with the effect of increasing commodity costs on domestic production? The company you work has decided that its easier and cheaper, at least in the short-term, to have its products manufactured in China rather than spend the time and money to cost effectively make them in the US.
labor costs and production costs are the biggest part of a price.. transportation and advertising are 2nd. prices would be much much higher then they are if labor costs were higher... right now labor costs in china plus transportation dont come close to what labor and production costs would run us here in my company trying to make the parts here..
The model you are citing varies widely across different products and even across the same products depending on the methods used. If one uses decent quality manufacturing methods, labor costs fade, and some industries have little to no transportation or advertising costs.
But if recall things correctly, you work with Flowserve?
I love how you state "facts" that are nothing more than useless generalities. Every business is different, for some raw commodities are the "biggest part of the price" for others its R&D, etc. It all depends on the business.
You spoke about commodity costs...now you are talking about labor costs. For me the labor costs as a percentage of retail price is around 2-3%.
So what? What does that have to do with the effect of increasing commodity costs on domestic production? The company you work has decided that its easier and cheaper, at least in the short-term, to have its products manufactured in China rather than spend the time and money to cost effectively make them in the US.
even a loaf of bread has wheat accounting for only 10% of the purchase price..,. a 60 buck pair of jeans has less then 2 bucks in cotton at todays prices.... they were just discussing this on blumberg radio this very week....
true, different businesses vary but even those that use commodities as there basic ingrediant dont have that commodity counting as much as we all think. most products they looked at had labor and cost of production as number 1 accounting for most of the resale price. second slot was transportation and advertising costs.... dead last in the resale price of all the goods were cost of commodities.
Last edited by mathjak107; 02-18-2011 at 03:58 PM..
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