Hi Gunther,
Aw, you know, everything in this country (world) is driven by money and the old "You have something on me, but I have something on you" mentality. It's how these guys hold on to power. I've begun to notice that, for example, and this is off the topic, most large corporations do business the exact same way. Is Coke really that much different than Pepsi? Are they competitors? Well, when you consider (I read the names a few years ago) that at least 20 people sat on the boards of both companies you begin to think not. One thing's for sure--neither would accept "Gunther Cola" in the marketplace and would work together (not that we would ever know it) to trash your good name and product. Nothing would be out of bounds. Why is everything made in China? Because it's cheaper? Think about this...
Some $200 (factory cost) electronic device is mass-produced. Let's say 50 people work 10 hours a day using sophisticated machines to produce 1000 devices. Hardly mass-production. At $10 an hour you've spent $5,000 raw, or $5 per unit in labor. Let's throw in another 20% for some benefits/taxes here in the US. $12/hr., right? $6000 is $6.00 per unit. At $1/hr in China (ouch! but who knows what it really is?) your raw labor is $500 ($.50 per) and we won't throw in the 20%. So by saving $11.00 an hour in a third-world factory you reduce the raw labor cost of a $200 item a mere $5.50, or 2.75%. More importantly, you've removed $5000-$6000 from the local economy each day, and that money would later filter both up and downstream in all directions, enriching the life of everyone who touched that money in the process.
Now, play with the numbers and you'll begin to see how truly greedy and secretive these people are. What if 50 workers could produce 1500, 2000, or even 10000 of this item each day? That could make the difference PENNIES, not dollars! What if we paid them the $8.00 minimum wage?
I don't know, and I doubt it, but what if they could only produce 500 a day with the sophisticated production machinery? Even at half-production it's only an $11.00 difference on $200. 5.5% is hardly a reason to close the factory, pack up the manufacturing equipment, and ship it lock, stock, & barrel overseas. 50 people keep their jobs and spend it all. The point is, and I learned this from a "socialist" Econ professor (he was brilliant, by the way) back in '82--it's all a big lie. And everyone has adopted it. Do you think they pass the savings on to us? It's sort of a rhetorical question. The answer is NO! They get to keep the difference.
I've been in business most of my life, and different ones at that, and although I have never experienced factory economics--numbers can be very deceiving to the uninformed. They simply don't want us to know. If we learn the truth the upper hand is gone.
Same with politics...
Bert
P.S. This is a simple view of a complex idea, but the numbers are crazy on a large scale. I believe the point is valid. One last thing: People confuse our National Debt with the trade imbalance. They are separate things. The trillion+ we owe China is not for all the crap we buy from them in stores. That's all paid as it's purchased. It (the debt) is because our govt doesn't take in enough money in taxes to pay its bills--so they borrow. So, why did Gunther Electronics close its doors and move to China, robbing the govt of badly-needed revenue? Three words--Richard Nixon, 1971. It's a 40-year-old poorly thought plan Reagan later called "trickle-down economics." And no president will touch it with a 10-foot pole. Why not? Because "they (China) now have something on us (USA)." And many of us have watched it unfold before our very eyes.
