Quote:
Originally Posted by eddiehaskell
Why is so much cheaper to make parts in Germany/Japan?
If it cost $5 to assemble a phone in China - how much would it cost in the US?
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It depends on the particular parts. Japan's electronic industry is highly experienced and long established. Japan benefits from shorter supply lines for certain elemental items that come from Indonesia and other close regions, all of which are often cheaper to produce at their source. Economics change, but distance does not.
Germany essentially had to completely re-build all it heavy industries, as did Japan, after WWII. none of the U.S. heavy industries were destroyed, so for about 20 years, the USSA had a massive advantage, but all of its heavy industry facilities were not modernized, so many became obsolescent or inefficient over that time, while Germany's and Japan's industry was new, modern, and more efficient.
Germany has always been a very industrial nation, and it's lines of supply are sometimes shorter than ours, and its internal lines of supply are shorter as well. The German guild tradition, a long progression of novice to expert, is a huge advantage in training new labor. The United States had an equally good training system in our unions before the unions were destroyed by the right to work laws.
Germany also lost so many adult men in the war that their senior workforce is a generation younger than ours. Their immigration laws make it much easier to replace aging workers. Many of their immigrants have moved there are some of the most skilled workers and professionals- engineers, doctors, programmers, administrators, etc. their mother countries had, and when they fled they brought those skills with them.
These workers are very happy to be allowed into the guild system. Germany has also been the beneficiaries from the unrest in the Eastern European nations that border Russia.The distance in all of Europe are shorter than those here, and German ports are as modern as their heavy industry.
All those things may be small by themselves, but the all add up.
When the entire United States are all on the same page, many of these foreign advantages are lost. But when it is not, the U.S. has a very hard time of it competing state by state instead of competing region by region.
When states began to compete between themselves too much, entire industries can become non-competitive.
Any race to the bottom always fails in the end, as there is always somewhere on Earth that is busy racing toward the top from the bottom. Many German goods cost more than their American equivalents, but Germany uses that extra money to improve their labor force, their industrial bases, and their quality.
Well-paid workers lead more contented and productive lives, as does a good working environment. Wages and products are both on a sliding scale; both degenerate when ignored for too long, and the rest of the world is now waiting for that degeneration.
If the basic minimum wage goes up, carrying the products that they produce expenses with them, American will buy better made American goods because they can afford them easier.
There is nothing inherently exceptional about Germany, Japan, China, or anywhere else. Their economies have risen because all of them engaged in a race to the top, not to the bottom.
When the goods are better, their value increases because the goods remain good for a longer period of time.
The value of time increases the good's inherent value. People buy fewer goods, because they last longer, but the population of the world continues to explode, so the market for all goods continues to expand globally.
Once our minimum wage goes up, America has everything else it needs to provide goods to the rest of the world that have real value in price, quality and durability. With a stable, well educated and well trained workforce, new industries will naturally rise where humans are better than robots.
In a race to the bottom, robots replace humans. In a race to the top, robots assist humans. When they assist, the economy grows at a faster rate, limited only by the humans who control everything. Robots are only machines. Humans are infinitely more adaptable than machines.
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