Why the US can't just start making everything here

[motorguy222]

This may be a little

Something that many are overlooking on the board is that there are those here in the US that have to buy the cheapest,not because ther are cheapskates as has been implied to some extent but because they dont have the extra money.Theres millions of people in this country that are not as rich as some seem to be on the board.

Not every job pays 50.00 an hour and has an air conditioned office.Let me say this and be very clear,there is nothing wrong with having a job that makes less and I dont want to hear that they should get a better education,that is degrading to the extent that it makes it sound as if they are a lesser person for having the job they have.

There are jobs that have to be done and they are not 50.00 an hour jobs,the people doing them are just as good a people as those that make 50.00 an hour and are probably in many if not most ways,better.

The job or position that you have in no way makes you any better than anyone else regardless of how much a person may think it does.The amount of money that you make doesnt make you better than anyone else,those that feel that they have the right to treat others with contempt are only showing their lack of decency.

 

[d00df00d]

Originally Posted By: Vikas
If you bought $120 shirt, why is that factory which made the shirt in Bangla Desh gets only $6? Who is pocketing the $114? Doesn't the blame then lies on the American company which is keeping that $114? Why doesn't that company make the shirt in USA for $60 and be happy with $60 in profit? Because they do not want to lose out on the extra "free" $54.

- Vikas

There are many layers. Usually, the factory gets contracts through agents. Then there's the brand's share, and then the retailer's. Plus, there are distribution costs at every stage. I'm not sure how much profit is made at each stage; presumably it varies. Some agents require... financial persuasion, which increases costs. Some brands sell their clothes at their own stores, which cuts down on costs.

The only thing that seems clear to me is that American customers are not willing to spend more than they do, and that cuts off the only sure-fire way we might have to persuade the corporations to improve conditions at the factories or bring more jobs here. Maybe there are other leaks that can be plugged. I'm not informed enough to say.

 

[mechanicx]

I still say that the government is constitutionally delegated to regulate trade. But its in the pocket of the global traders. When the argument is made that American companies can't compete with China on the unlevel playing field, there is no reason they should have to, it is self-imposed. Or that consumers want cheap (not that they are actualy getting cheaper retail prices) that doesn't mean they should be able to. There might be a market for stolen goods, drugs, human trafficking etc but we don't allow that.

The vast majority of this so-called free trade is nothing more than formerly profitable American companies closing down shop in the US and opening up in China for the primary purpose of increasing profits. I don't see prices going down, but quality and sometimes safety.

It's just bogus that virtually everything is produced in China and sold here. China can produce for their own market and we can produce for ours. Now even our food is coming from China. Oftentimes unregulated, low quality, toxic garbage a lot like much of the manufactured goods from there http://today.msnbc.msn.com/id/40198123/ns/today-today_health/?GT1=43001.

 

[motorguy222]

One thing that increases the cost of things is the amount of agents that are invloved in the process of getting the actual product to market.

You have an agent of the agent that works for the factory that then talks to the agents of the agents that talk to the agents agent for the wholesaler that then talks to the buyers agents agent that then talks to the salesmans agents agent that actually works and promotes the product in question.

Then you have the next set of sales agents that actually try to get the products in the stores that go through the same process again and again and again and again.

This makes a $10 dollar product cost $50 dollars at the store level,plus the taxes,cant forget the taxes.

If the product is a textile,the thread,coloring and any other material needs are taxed.

If it is plastice,the oil is taxed,the coloring agent is taxed and the other chemicals involved are taxed.

The same process applies to everything we buy and that adds to the cost.

While I agree that there needs to be regulations as far as the safety of workers and the products that are made,some of these regulations have gotten way out of control.

Here is an example of g-ment going over board.

I used to work at a company that had a huge industrial trash compactor.It was so big that it has a dead man switch on it in case someone fell in,you could hit the switch and the compactor would reverse and go back to the starting point so that the person wouldnt get crushed.

OSHA came in and decided that the dead man switch wasnt safe operating the way it did.They decided that the switch had to be changed to where it would only work if you stood and held it through the whole cycle.

Now,if during that cycle,if for some reason a person fell into the compactor,there was no longer the dead man function,there was no reverse.The compactor had to be run through its cycle to get it to return to its starting position.

If someone fell into the compactor and the compactor started crushing them,you couldnt reverse it to get them out,the switch no longer worked that way thanks to OSHA.The cycle would have to be completed to get the person out.The terrible part is that the person is probably crushed.

 

[NJC]

Originally Posted By: Vikas
If you bought $120 shirt, why is that factory which made the shirt in Bangla Desh gets only $6? Who is pocketing the $114? Doesn't the blame then lies on the American company which is keeping that $114? Why doesn't that company make the shirt in USA for $60 and be happy with $60 in profit? Because they do not want to lose out on the extra "free" $54.

I don't know how, in a "free market" environment, how the ridiculous high prices are maintained. I recently purchased some good quality kid's sandals for $100! This is from a reputable store (MEC in Vancouver) ... but come on, what a rip. And it wasn't the store nor the MFG who was pocketing the cash. Vikas is correct.

 

[Torino]

Originally Posted By: motorguy222
Originally Posted By: Torino
The basic problem here is regulation, taxation and litigation. Hourly wages have little to do with it. Sadly, its ALL intentional. John--Las Vegas.


I agree with the taxation and such but wages do have a lot to do with it.

Example,I have a company that remanufactures alternators.I have 100 employees and they make on average of $16.00 per hour,plus benefits.The alternators I make wholesale for $40.00.I have federal,state,county and city regulations and taxes that I must pay and follow,including over time pay and safety.

A company in China remanufactures alternators that are comparable.They have 50 workers and they make an average of $100 dollars a month and they dont have any benefits.The alternators made here wholesale for $20.00.The company here works as few as possible for as many hours as they want and in what may be dangerous factories.

I cant compete with the Chinese company.
Very good comment. I own a company that smelts and refines metal.My conversion costs are approx. 20% less than my main offshore competition. I pay well over the going hourly rate. I do this by automation and innovation. Alas, I am under CONSTANT attack from the various Govt. agencies. John--Las Vegas.

 

[CivicFan]

Originally Posted By: NJC
Originally Posted By: Vikas
If you bought $120 shirt, why is that factory which made the shirt in Bangla Desh gets only $6? Who is pocketing the $114? Doesn't the blame then lies on the American company which is keeping that $114? Why doesn't that company make the shirt in USA for $60 and be happy with $60 in profit? Because they do not want to lose out on the extra "free" $54.

I don't know how, in a "free market" environment, how the ridiculous high prices are maintained. I recently purchased some good quality kid's sandals for $100! This is from a reputable store (MEC in Vancouver) ... but come on, what a rip. And it wasn't the store nor the MFG who was pocketing the cash. Vikas is correct.


There really is no 'free market'/laissez-faire in our current reality. At best we have what we, the economist types, call a 'monopolistic competition'.

For the academic mumbo jumbo, see http://en.wikipedia.org/wiki/Monopolistic_competition

 

[mechanicx]

I think we have a lot of oligopoly too, http://en.wikipedia.org/wiki/Oligopoly.

 

[Mr Nice]

In 20 years will there still be any manufacturing in the USA ?

 

[Spazdog]

Originally Posted By: LT4 Vette
In 20 years will there still be any manufacturing in the USA ?

I'm not even sure we'll still be making military equipment.

The F-15 Eagle has an air combat record of 101:0. But it' an older design. The F-22 Raptor should have been better but Congress killed it.

But man oh man did we make some awesome stuff.

 

[d00df00d]

Originally Posted By: Spazdog
The F-22 Raptor should have been better but Congress killed it.

Correct that the F-22 is better, incorrect that Congress killed it. That's the story everyone's been telling, and for the life of me I still haven't figured out why. They only stopped new orders for the Raptor and spent the money on the F-35 instead.

Last I checked there are something like 168 Raptors in service, with 19 more currently in production. If early trials are any indication of the plane's capability, that should be more than enough to meet any air superiority needs we may have in the foreseeable future.

 

[PandaBear]

Dan4510 sums it up well. It is not just lower cost but other countries have the agenda to get to the top at all cost. For developing and export driven nations, selling to the massive US market is the easiest way to get out of poverty. They are not competing with the US, but among themselves offering to just feed their people even if it means they tighten their bellies.

Want proof? Mercedes are so cheap in the US people buy here to export back to Asia. Stainless steel cookwares and auto parts are so cheap here that every time I go to Asia I bring loads of them back to the countries of origin as gifts. Computers, electronics, furnitures, etc are all cheaper in the US due to the massive "Walmart" effect and size of the market, even compare to their sales price in China.

We as a nation have a "let the individuals sink or float" policy but other nations (Japan, Korea, especially) have a policy that does strategic investment in critical industries. Why do you think most of the DRAM and flash memories are made there? They cost tens of billions to build a factory and companies the size of 1/6 of a nation's GDP (Samsung) build the factory because they know the barrier to enter the business is so high, that once you are in, you are in forever.

So what are the lazze faire capitalists going to do when they can no longer get to where they want to be by lowering taxes and regulations because they are too weak to pay for the cost of entry? They get stomp to death in the market.

 

[rjundi]

I think sometimes in the US we have a view that we are the only ones in this world who want consumer items. Like or it or not the rest of the developing economies want them at a cost they can afford. Why build two factories in most cases to supply the same item?

 

[CivicFan]

Originally Posted By: rjundi
I think sometimes in the US we have a view that we are the only ones in this world who want consumer items. Like or it or not the rest of the developing economies want them at a cost they can afford. Why build two factories in most cases to supply the same item?


Most of us haven't stepped outside our borders and even then it's usually been trips to gated resorts in the Caribbean. When you don't know about the rest of the world, it's easy to fall into a myopic perception of how things really work.

 

[ZZman]

How did we ever survive before all these cheap imports?

Maybe we bought less. Maybe we bought what we actually needed.

Greed has caused this. Lets make the most profit and make our shareholders richer.

If we stopped all cheap imports and started making things ourselves we would survive. We would pay more but we would also be helping make the U.S stronger by making jobs that help people live a decent life and produce taxes that help support our governments.

These other countries do it cheaper with less wages and benefits and less environmental and safety regulations.

 

[eljefino]

Originally Posted By: ZZman


These other countries do it cheaper with less wages and benefits and less environmental and safety regulations.


If you're comparing us to other "first world" countries I'd beg to differ.

I can hang a shingle on my garage and start my own auto repair business. All I need is a sales tax certificate for reselling parts, easy enough to get; the state loves money.

If I wanted to do state inspections I'd need to invest in a lift, a headlight aimer, OBDII scan tool that meets a couple SAE specs (eg not a proprietary state-issued ripoff) and that's about it. Already have my mechanics' license, the result of a multiple-choice written test at the police barracks. No skills test.

I'd probably *want* to incorporate to protect my assets, get insurance, etc. I should also watch my back to make sure I don't pollute the groundwater.

Compare this to other countries where I'd have to go to school, be someone's apprentice, get a "brake license", and jump through enough hoops that I'd be a "lifer" to pay it off. Who can decide with certainty what they want to do at age 18? Probably less than half the populace. Then you have a workforce doing inefficient, hated work.

Of course this would be part of the "service industry" everyone decries. If I fix a 150k Hyundai and get it to 200k miles, though, I've added value on these shores and delayed the additional import of another car for those miles. It's no different that sending scrap steel to china and getting finished product back.

 

[ddrumman2004]

Originally Posted By: motorguy222
This may be a little

Something that many are overlooking on the board is that there are those here in the US that have to buy the cheapest,not because ther are cheapskates as has been implied to some extent but because they dont have the extra money.Theres millions of people in this country that are not as rich as some seem to be on the board.

Not every job pays 50.00 an hour and has an air conditioned office.Let me say this and be very clear,there is nothing wrong with having a job that makes less and I dont want to hear that they should get a better education,that is degrading to the extent that it makes it sound as if they are a lesser person for having the job they have.

There are jobs that have to be done and they are not 50.00 an hour jobs,the people doing them are just as good a people as those that make 50.00 an hour and are probably in many if not most ways,better.

The job or position that you have in no way makes you any better than anyone else regardless of how much a person may think it does.The amount of money that you make doesnt make you better than anyone else,those that feel that they have the right to treat others with contempt are only showing their lack of decency.


Thank you sir for saying this!

 

[Kestas]

Originally Posted By: ZZman
How did we ever survive before all these cheap imports?

Maybe we bought less. Maybe we bought what we actually needed.

Start by looking at your closet. See all the clothes? Do we really need all these clothes? I remember what they cost way back when they were made in the USA. We simply did with less.

My parents had to struggle with very little during the war. I now joke to people that I have enough clothes to last me through two wars.

Man's desires are unlimited.

 

[PandaBear]

Originally Posted By: ZZman
How did we ever survive before all these cheap imports?


The rest of the world was in ruin after WWII, we had no competition and no choice but to build them here. They have to import from us.

Now that they caught up, and we ran out of natural resource (oil), we have no choice but to import those that we cannot make anymore.

Then we have to factor in that the rest of the world now are in where we were 50 years ago and poorer, cheaper, you do the number.

Maybe you can convince the few of us here to go back in time and live when USA is the 3rd world, so we can make everything here.

 

[PandaBear]

Originally Posted By: eljefino
Originally Posted By: ZZman
These other countries do it cheaper with less wages and benefits and less environmental and safety regulations.

If you're comparing us to other "first world" countries I'd beg to differ.

Even 3rd world like China.

One of my family friend back there told us that in order to open a simple photo developing store in down town, you have to get 30 government regulation body's approval.

Guess what happen when you need 30 of them? Corruption. Because if you follow the right path and wait for the inspectors to come at the own pace, you'll open it 2 years later.

And that's assume you follow all the regulation to the dot. If you have a few points that you missed, even more corruption.

People forgot how good we have it in the US and whine about regulations, when we are already bare minimum to keep up with safety and health.