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Where Will Your Next Gadget Be Made?

Soulskill posted more than 3 years ago | from the not-here dept.

Cellphones 378

hackingbear writes "The New York Times is warning of the possibility of price inflation for gadgets, cars, and many other items, not from our skyrocketing government debt, but rather the increasing cost of doing business in China. Coastal factories are raising salaries, local governments are hiking minimum wage standards, and if China allows its currency, the renminbi, to appreciate against the US dollar later this year, the cost of manufacturing in China will almost certainly rise. (The report missed the biggest cost factors in China — electric and water utility costs.) 'For a long time, China has been the anchor of global disinflation,' said Dong Tao, an economist at Credit Suisse. 'But this may be the beginning of the end of an era.' The shift was dramatized Sunday, when Foxconn, the maker of the iPhone and everything else, said that within three months it would double the salaries (rather than the rumored 20% increase) of many of its assembly line workers.""And last week, the Japanese auto maker Honda said it had agreed to give about 1,900 workers at one of its plants in southern China raises of between 24 and 32% in the hopes of ending a two-week-long strike, according to people briefed on the agreement. However, while big and famous manufacturers, like those in the US and Europe, may worry about their PR images and give in to labor demands, it is unclear if thousands of smaller ones will follow. And given the millions of people waiting for work in other countries, from India to Vietnam, the only thing that may have changed is the prevalence of Made in China labels of your gadgets."

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378 comments

Honestly, I hope the US (5, Insightful)

Em Emalb (452530) | more than 3 years ago | (#32485726)

Since I live here in the US, I'd really like to see a return to the US for manufacturing. We're still teetering on the brink, don't let day to day market-droid speak fool you.

The US is not anywhere near out of the woods yet.

So...I'd like to see my next gadget have "Assembled/Made in the USA" on it.

Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget.

not sure of "out of the woods" vs. something else (3, Insightful)

sethstorm (512897) | more than 3 years ago | (#32485780)

I'm not sure it's so much "out of the woods" as much as it's beginning to be "sweep the undesirables (long-term unemployed) under the rug" to make things look better.

Re:not sure of "out of the woods" vs. something el (4, Insightful)

wealthychef (584778) | more than 3 years ago | (#32486226)

Nationalistic bickering aside, this is very good news. As living standards rise around the globe, labor will get more expensive, sure, and our iPods might cost 20% more or something, and in return, human beings on the other side of the planet have food on their table and work to do. It's good for the world that labor in china is getting more expensive in every way except the most short-term "I want my shit cheap right now" way.

We are not going to be able to bully China into submission like we are used to doing around the world. How about if we start trading with her and learning to respect their culture? That doesn't mean ignoring human rights abuses, but it means respectful engagement.

Re:not sure of "out of the woods" vs. something el (4, Insightful)

timeOday (582209) | more than 3 years ago | (#32486384)

It's good for the world that labor in china is getting more expensive in every way except the most short-term "I want my shit cheap right now" way.

Well, they are going to be using a lot more resources - eating more meat, driving more cars, more precious metals, all that good stuff. Energy costs will soar when the global economy recovers. But don't get me wrong, I can hardly complain when their consumption is on average still a fraction of mine. And maybe their armies of engineers will figure out a post-fossil-fuel economy.

Cut the crap, please.. (-1, Flamebait)

sgt_doom (655561) | more than 3 years ago | (#32486402)

"As living standards rise around the globe, labor will get more expensive.."

Puuuuhhhllease, you creeps from the National Association of Manufacturers, the Business Roundtable and the Financial Services Roundtable have been peddling this bulls**t forever at this site.

Give it a rest already, clowns!!!

Bully China into submission....what a complete load, doodette!!! You are a true slave labor supporter, clown, so just cut the propaganda, lowbrow deceiver....

Totalitarian Capitalist States and Corporate Fascist States are what you worship, so kindly STFU already....

Re:Honestly, I hope the US (2, Interesting)

Anonymous Coward | more than 3 years ago | (#32485796)

How about South America?

1. Cheap labor to be found (the capitalists love the idea)
2. They're our neighbors (free trade pitbulls will love it)
3. Shorter trip to get those cool "akihabara" gadgets (Geeks will love it)
4. Easier for our government to strongarm environmental guidelines (greenies will love it)
5. Brings jobs to South America (some people in South America will love it)

seems pretty logical.

Shoddy gadgets from another cheapish country? (3, Insightful)

sethstorm (512897) | more than 3 years ago | (#32486102)

No thanks.

Never mind the corruption(making Chicago look saintly) and contempt for the US that still exists there.

Re:Shoddy gadgets from another cheapish country? (3, Insightful)

$RANDOMLUSER (804576) | more than 3 years ago | (#32486164)

Riiiight. Because China is corruption-free and they love us there. And Chicago is far less corrupt than, say, Washington DC.

Re:Shoddy gadgets from another cheapish country? (1)

sethstorm (512897) | more than 3 years ago | (#32486202)

I'm not defending China by any means here. Just that South America isn't that much better(nothing that isn't more than a rounding error in amount).

Right now, Chicago and DC are morally equivalent.

Re:Shoddy gadgets from another cheapish country? (1)

$RANDOMLUSER (804576) | more than 3 years ago | (#32486350)

Nonsense. I'm tired of people trolling about Chicago who don't know a goddamn thing about it. Al Capone has been dead for a while now. Chicago is run more honestly (and WAY more efficiently) than many big US cities.

Re:Shoddy gadgets from another cheapish country? (3, Insightful)

Anonymous Coward | more than 3 years ago | (#32486258)

No thanks.

Never mind the corruption(making Chicago look saintly) and contempt for the US that still exists there.

For what it's worth, It's already going on.

If you happen to own an Xbox 360, there's a good chance that it was assembled in Mexico. It wouldn't be a far stretch to imagine the entire thing being manufactured there.

Re:Honestly, I hope the US (2, Insightful)

Anonymous Coward | more than 3 years ago | (#32485858)

Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget.

Corporations don't have any such preferations. They'll certainly not come back. They'll just swarm to the next flavour of the month outsourcing country.

I don't know ... some other Asian country or maybe Africa or South America. Certainly not the USA. Not while other countries are worse off.

Re:Honestly, I hope the US (3, Interesting)

Dan Ost (415913) | more than 3 years ago | (#32486092)

Corporations don't have any such preferations. They'll certainly not come back. They'll just swarm to the next flavour of the month outsourcing country.

Actually, as oil prices increase, it'll eventually be cheaper to manufacture low margin goods here than to do it overseas and pay for shipping.

Re:Honestly, I hope the US (3, Insightful)

baldass_newbie (136609) | more than 3 years ago | (#32486252)

Actually, as oil prices increase, it'll eventually be cheaper to manufacture low margin goods here than to do it overseas and pay for shipping.

Talked to a guy on a plane who has a Senior Exec for a manufacturing firm. He said that even with the high price of oil (it was much higher during this flight last year) it was still cheaper to build a plant with a 10-15 year lifecycle and ship everything back than to retrofit an existing plant in the US.

It's going to take higher oil prices, plus significant increase in the renmibi (or yuan) and huge salary increases for it to even out - and you still won't have the increased costs of environmental legislation or the CODB for manufacturing in the tort-happy US.

Pack a lunch. We won't be making much of significance for a while on these shores - especially if the Employee Free Choice or 'Card Check' legislation gets passed. In fact what little offshore company manufacturing done in the South will likely go even further south.

Re:Honestly, I hope the US (1)

0123456 (636235) | more than 3 years ago | (#32486410)

Actually, as oil prices increase, it'll eventually be cheaper to manufacture low margin goods here than to do it overseas and pay for shipping.

Shipping is extremely cheap compared to other forms of transport: this is why coastal cities have been the biggest economic centers for most of human history. With oil at $500 a barrel you'd easily be better off bringing products to a coastal city from China on a container ship than driving them from a factory half-way across America by truck; at a minimum you'd probably need to build a vast network of electric rail for transport inside America to be competitive.

For example, when I emigrated across the Atlantic half of the cost of shipping my stuff over paid for taking it thousands of miles from Europe through the Panama Canal to the West coast and the other half on the remaining few hundred miles by truck from the port to my house.

Re:Honestly, I hope the US (1)

sethstorm (512897) | more than 3 years ago | (#32486170)

What do you do when you've run out of hell-holes, and don't have enough robots or automated processes to cover?

Re:Honestly, I hope the US (2, Insightful)

magarity (164372) | more than 3 years ago | (#32486370)

Corporations don't have any such preferations. They'll certainly not come back. They'll just swarm to the next flavour of the month outsourcing country
 
Contrary to a popularly repeated theme, corporations don't have preferences in a mindless vacuum; they prefer to make what their customers want. Since most (not all) customers in most (not all) markets want a product that meets functional specifications (first) for the lowest price (second) this drives companies to seek the lowest priced manufacturer that can produce to specification.
 
Note that if the customers prioritized "Made in x" then the companies would seek that. Look what happened with Walmart getting stung on fake Made in USA labels a few years back. It's now possible to find made in USA versions of many (not all, maybe not "most", but many) categories of products when shopping at Walmart.
 
If more companies were pressured by a majority of constomers then manufacturing would relocate locally. Until then, it isn't the companies' fault for seeking the lowest priced manufacturing worldwide.

Re:Honestly, I hope the US (4, Interesting)

OrangeTide (124937) | more than 3 years ago | (#32485890)

It's tough to make gadgets in the US because it is hard to scale regional supply chains to the size you'd need for a popular gadget. In parts of China or Taiwan there are hundreds of companies available to select as component suppliers. They can put crates on a truck and have more available within the hour. There are lots of places to go for large scale PCB manufacture in these regions as well. Even in silicon valley we have trouble with companies if we want to scale past about 10k units. For enterprise equipment those volumes are acceptable, and there are a few companies that make expensive equipment in the US. There are also lots of places that do final assembly in the USA (Dell), or some components in the USA (Intel).
It is possible to build up partners to get all the components you need. You can find everything (or nearly so) manufactured in some quantity in the US. And if there is money to be had, those businesses will scale up to meet your demands, eventually.

Re:Honestly, I hope the US (1)

seanadams.com (463190) | more than 3 years ago | (#32486354)

And if there is money to be had, those businesses will scale up to meet your demands, eventually.

Or not. Domestic suppliers will interpret rising volume as an indicator that you will soon be drawn offshore for lower pricing. Unless they have other customers who will use the facilities, they will not scale their production capital just to watch you jump ship. When it comes to electronics they really only cater to the small volume / high margin production that is still feasible in the US.

In the longer term that might change with the failure of the USD, but the network effect of the Asian supply chain that you mention is going to make it a difficult transition.

BRIC with Mexico (0)

Anonymous Coward | more than 3 years ago | (#32485898)

Brazil
Russia
India
China

Those are the current four countries moving up in the world. How long before Mexico goes into the mix.

Re: (1)

sethstorm (512897) | more than 3 years ago | (#32486134)

Not if the US military has their way. Not so much direct influence as much as it is pulling strings to get things done.

But then it's not hard to move upward when you're a Third World country.

(Yes, it's painful to hear, but modbombing is not a valid response.)

Re:Honestly, I hope the US (2, Insightful)

bmajik (96670) | more than 3 years ago | (#32485900)

There are two commonly held misconceptions in your post:

1) the US manufacturing sector is in decline

This is not true. US manufacturing _output_ has been going up for years. However, the number of US manufacturing JOBS has been going down.

So, we're still making lots of stuff here, but we need fewer people to do it.

2) The US economy is recovering

[technically, you stated that we're not out of the woods "yet", which is true, but you seem to think that there is any evidence that we might be improving or heading in the right direction. There isn't, because we aren't.]

The US economy will cease to exist as you know it within your natural lifetime. I say "natural" lifetime because with the pending socio-political-economic collapse, many people will probably come to unnatural ends much sooner than they expect.

The US dollar is on a crash course towards hyperinflation. The United States Federal government, as well as the governments of 49 of the 50 states, are legally insolvent. Not only is the federal government out of money, but the largest area of spending growth is debt servicing. Even if there is a politician who can actually cut spending [I'd trust Ron Paul to do it; but that's about it], my earlier statement holds.

To rescue the federal government, and the US dollar, you'd have to roll back so much government -- so quickly -- that the federal government would be unrecognizable to "Americans" today.

Re:Honestly, I hope the US (1)

seifried (12921) | more than 3 years ago | (#32485924)

The United States Federal government, as well as the governments of 49 of the 50 states, are legally insolvent.

I'm curious, which one is solvent?

Re:Honestly, I hope the US (0)

Anonymous Coward | more than 3 years ago | (#32486022)

Texas of course.

Captcha: unarmed =)

Re:Honestly, I hope the US (1)

Joey Vegetables (686525) | more than 3 years ago | (#32486072)

What are your thoughts regarding a Soviet-style collapse? I've always hoped for this outcome as probably the best one possible in terms of minimizing suffering and loss of life. Do you think this is still possible? Can states that are close enough to solvency today shrink enough to be able to borrow money on world markets and thus operate credibly? Alternatively, could the American people be trusted to start over, to create something resembling lawful, Constitutional government(s), free of all the cruft that accumulated over the years and ultimately killed it?

Re:Honestly, I hope the US (2, Interesting)

Anonymous Coward | more than 3 years ago | (#32486246)

Here's the thing about saying that 49/50 of the states are insolvent... sure California is insolvent, but if we were our own nation state, we'd be fine. CA pays out WAY more to the Fed than it gets back... if we could keep all that money locally, we'd have no problem being solvent.

Re:Honestly, I hope the US (5, Informative)

senorbum (1795816) | more than 3 years ago | (#32486360)

Hmm, its a nice apocalypse theory but has really nothing to back it. The US dollar is no where near hyper-inflation. If you knew anything about Bernanke you would recognize that he is extremely anti-inflation and has been well before he took his current roll. Over spending is only a small issue in regards to the deficit. The current shortfall is due to a loss of Tax Dollars, not due to a major increase in spending. The U.S. Dollar is stronger today than it has been in a while. There is no magical 'pending socio-political-economic collapse' just waiting around the corner. If you haven't paid any attention to any of the jobs reports, in 1.5 years we went from losing 800k+ jobs per month to gaining 50-200k non-gov't jobs per month. And if you read the recent jobs reports at all you would have seen that wages increased and hours/week increased. Plus, productivity is finally flattening out which means that employers will be forced to hire new people since they can't get any more extra work out of their current people.

Re:Honestly, I hope the US (1)

chill (34294) | more than 3 years ago | (#32485912)

The question is, how much of a premium would you be willing to pay for that? If you're going to be replacing labor that costs $0.25 per hour with labor that costs $8.00 per hour, most products will see a large rise in cost.

Re:Honestly, I hope the US (1)

Em Emalb (452530) | more than 3 years ago | (#32485958)

Me personally, I don't mind the potential increase in cost. Granted, if it were across the board, I'd take issue with it (meaning across all areas of commerce) but for a specific gadget? I wouldn't mind. Would I complain? Maybe, but that's my right as a citizen of the US, right? To complain and not do anything about it? ;-)

Re:Honestly, I hope the US (1)

NF6X (725054) | more than 3 years ago | (#32486174)

The question is, how much of a premium would you be willing to pay for that? If you're going to be replacing labor that costs $0.25 per hour with labor that costs $8.00 per hour, most products will see a large rise in cost.

I'll happily pay a premium of $7.75. :D

An increase in quality as well as price. (1)

sethstorm (512897) | more than 3 years ago | (#32486270)

If that increase translates into a higher-quality product (and less suicides in Potemkin villages like Foxconn's), then it is indeed worth it.

Re:Honestly, I hope the US (1, Insightful)

Monkeedude1212 (1560403) | more than 3 years ago | (#32485934)

Are you willing to pay at an increase in price upwards of 300%?

Because thats what its going to take to get products made in a country where the hourly minimum wage could buy a motorcycle in a developing nation.

If you look at the entire lifecycle of a product before it reaches your hands, it goes through a lot of people and a lot of time, and a lot of effort goes into it. How is it possible that handheld radio at Radioshack is only $10? The cost of the materials alone should be in excess of that. Then the man hours spent refining the materials, assembling them, testing them, shipping them, and all that, its almost baffling. So who is paying for all that? Usually its the Chinese Labourers working at substandard wages. And all the other people who get abused along the product line.

Story of Stuff is worth a watch, if you haven't seen it yet.

But yeah, thats basically why you don't see anything made in the states, Canada, UK, France, etc etc.

Re:Honestly, I hope the US (1)

aliquis (678370) | more than 3 years ago | (#32486296)

The only problem is for those without work since they lose out, I would believe everyone else win because they can get more for less.

What good is say 25% higher "income" for the whole country by manufacturing items locally if you have to spend 3 times more to get them? Everyone still get less.

Re:Honestly, I hope the US (1)

Abcd1234 (188840) | more than 3 years ago | (#32485996)

We're still teetering on the brink,

Err, the brink of what, exactly? No, really... what, domestic apocalypse? Dirty-30's style depression? What?

Re:Honestly, I hope the US (1)

somersault (912633) | more than 3 years ago | (#32486010)

Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget.

Not really.. I like cheap things. I'd be pretty happy to pay an extra 10% on gadgets if I knew the workers were getting fair wages, but if stuff was being made here in the UK then it probably would be even more expensive. Especially at first since we're not geared up to produce lots of gadgets.

I'll tell you what I want... (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#32486016)

I'll tell you what I want, what I really, really, want. A penis in the butt! What what?

Re:Honestly, I hope the US (1)

Locke2005 (849178) | more than 3 years ago | (#32486020)

Our best hope is to make transportation so expensive that it no longer makes economic sense to ship raw materials to China, have them made into cheap knockoff products there, then ship them back to us.

Re:Honestly, I hope the US (1)

Locke2005 (849178) | more than 3 years ago | (#32486066)

Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget. Some African countries have such a low opinion of their own manufacturing capabilities that their residents would rather NOT see "Made Here" on their gadgets. And Walmart is still in business because US consumers aren't willing to pay more for a product with "Made in the USA" proudly displayed on it.

Re:Honestly, I hope the US (1)

aliquis (678370) | more than 3 years ago | (#32486132)

Just as I'd suspect anyone from another country would prefer their country to be the country of assembly for their next gadget.

Actually no.

Buying anything labeled "Made in Sweden" would most likely be much more expensive than "Made in China."

And regarding economy we shouldn't try to compete with China or the rest of east Asia for low-salary manufacturing of low-tech goods. What good could come from that? "Yeah! Finally we're at Chinas/whatever level!"

We should do things we do best / they don't, at-least as long as they are behind, and spend the money generated buying cheap stuff from them (that way we got more stuff than if it was created here to ..)

labor will go to the lowest cost country (0)

Anonymous Coward | more than 3 years ago | (#32486220)

labor will go to the lowest cost country - period. end of story. issue is - we may be starting to see the start of the long dreamed of day when labor prices start to equalize worldwide. sucks if you are labor in the US or EU - it was great for Mexican labor, until China opened up, and now it's gonna be great for India, Vietnam, and probably a few Latin American and African counties.

Once the capacity of a local is exceeded, prices rise, the some of the work moves. Not all of it, but the lowest value add portion. So the Chinese labor will finally feel what the American auto assembly line work felt in the late 80's as their work moved offshore - disruption.

Re:Honestly, I hope the US (0)

Anonymous Coward | more than 3 years ago | (#32486274)

If adopted on a large scale, it would mean the end of our way of life as we know it and a return to a pre-WWI-style economy. Costs will go up, wages will go down. And I don't just mean costs of the gadgets... food, clothing, basic everyday necessities will be dramatically affected.

Re:Honestly, I hope the US (1)

russotto (537200) | more than 3 years ago | (#32486310)

Since I live here in the US, I'd really like to see a return to the US for manufacturing. We're still teetering on the brink, don't let day to day market-droid speak fool you.

It won't come back to the US in any great quantity. It might go to Mexico and Central America, though (Intel has a large presence in Costa Rica, for instance.. closer than China and more stable than Mexico)

In another hell-hole of a country? (2, Insightful)

sethstorm (512897) | more than 3 years ago | (#32485736)

It's no longer efficient to do anything of substance unless it is required(and only to those requirements).

Re:In another hell-hole of a country? (4, Interesting)

MozeeToby (1163751) | more than 3 years ago | (#32485908)

Yep, another hell-hole almost definitely. But, is that really a bad thing? It seems to me that outsourcing menial labor is the one international aid package that has a long term history of success. There's a lot of countries that are prosperous, developed nations today that were poor, developing nations when we started sending jobs there.

I'm betting that the next manufacturing center will be Africa, maybe even Somalia (no taxes! (Only joking obviously)). Guess what, anywhere that people can work for pennies on the dollar compared to the competition is going to be a tempting target for industry. And generally anywhere that people are willing for so little is by definition a place where very little is better than what they have now. Eventually, after enough money gets dropped into their economy pennies isn't enough anymore and we move on, but the factories, businesses, and trained workers remain and their economy is much better for it.

I'd love to see manufacturing jobs return to the US, but that isn't going to happen until automation is cheaper than developing nation manual labor. And when that does happen it's going to put the brakes on every developing country who relies on rich countries outsources to them for cheap labor.

That's all right (1)

overshoot (39700) | more than 3 years ago | (#32485758)

... the rest of the world's countries can just rehire all of those skilled workers and reopen the factories we shut down.

Oh, wait.

Less outsourcing? (1)

postmortem (906676) | more than 3 years ago | (#32485766)

Finally, manufacturing in USA will be viable option for at least some companies...While in USA labor costs are usually one of biggest expenses for companies, it ain't so in China.

Globalism should aslo mean there is fair labor rate everywhere.

Re:Less outsourcing? (1)

danbert8 (1024253) | more than 3 years ago | (#32485816)

Well fair labor rate is relative since the cost of living isn't the same everywhere. Not to mention the standard of living. Unless you want Chinese workers to live in mansions just because everyone in southern California does.

Re:Less outsourcing? (1)

postmortem (906676) | more than 3 years ago | (#32485944)

Sure - but at rate that Chines workers they are working for now, they need 12 hours work days in order to survive .. that does not buy you similar standard as ~$15/hr + overtime for manuf. jobs in USA.

Re:Less outsourcing? (1)

gyrogeerloose (849181) | more than 3 years ago | (#32486014)

Well fair labor rate is relative since the cost of living isn't the same everywhere. Not to mention the standard of living. Unless you want Chinese workers to live in mansions just because everyone in southern California does.

Excuse me, but I live in Southern California and I have to ask you this: does an 1100 sq. ft. duplex count as a mansion?

Re:Less outsourcing? (1, Insightful)

Anonymous Coward | more than 3 years ago | (#32486090)

If you spend a day in the house of a Chinese factory worker, I'm sure it does count as a mansion.

Re:Less outsourcing? (1)

Jhon (241832) | more than 3 years ago | (#32486388)

For what I paid for a 3 bedroom, 1700 sq ft "fixer" home on 6000+ sq ft lot in 2005 in SoCal, I guess it could be called a "financial mansion" if not the physical space of one.

I just call it the "black hole sucking away my financial solvency".

Re:Less outsourcing? (1)

swanzilla (1458281) | more than 3 years ago | (#32485936)

Globalism should aslo mean there is fair labor rate everywhere.

Global Socialism is not neccesary in Globalism, which is not to be confused with Globalization.

This particular story deals with Globalization.

Re:Less outsourcing? (3, Insightful)

Lemmy Caution (8378) | more than 3 years ago | (#32486100)

Globalization is the way that capitalism wrote an IOU to itself. That IOU is coming due.

Re:Less outsourcing? (0)

logjon (1411219) | more than 3 years ago | (#32486062)

We'll be outsourcing to Africa decades before the global market reaches a state such that American manufacturing is an option, at which point domestic manufacturing will likely be almost entirely automated. In order for American manufacturing to be a realistic alternative, there cannot be anywhere in the world that would be cheaper to manufacture in and import from.

Nooooo (2, Insightful)

Korin43 (881732) | more than 3 years ago | (#32485822)

How will I ever afford electronics if the people making them are paid 50 cents a day rather than 25 cents a day? :(

The next chinese will be robots (3, Insightful)

Maxo-Texas (864189) | more than 3 years ago | (#32485840)

The fact is, most of us can't afford to live in an america where everything is made by people who are paid $46,000 a year.

It's been said, a pair of $75 nike's would cost $300 if made by americans.

I think the next step will be more versatile machines (aka robots). Which leaves the issue of jobs for americans still unsolved.

Pay $50k for a robot, and run it 3 years, and you undercut even a $20k job. (not including social security taxes, etc.).

Re:The next chinese will be robots (5, Insightful)

NJRoadfan (1254248) | more than 3 years ago | (#32486002)

It's been said, a pair of $75 nike's would cost $300 if made by americans.

Those $75 Nikes have quite a markup. They could be made and sold here for around that price, but Nike's profit margin would suffer. There are shoes still made in the USA, and they are affordable.

Re:The next chinese will be robots (3, Insightful)

Skuld-Chan (302449) | more than 3 years ago | (#32486042)

No - the obscene profits companies make would have to go down if things were made in America - that is all this is about.

Those 75$ nike's cost a dollar to make...

Re:The next chinese will be robots (0)

Anonymous Coward | more than 3 years ago | (#32486232)

So using federal minimum wage it takes less than 7.8 miniutes of total work (from everyone from the guy delivering the materials to every person who touches it on the assembly line to the person who boxes it to the person who loads it on the truck) to make the shoe? Of course that does not include cost of materials or the cost of shipping.

Re:The next chinese will be robots (3, Interesting)

moogied (1175879) | more than 3 years ago | (#32486086)

Or, we could stop buying new nikes every 6 months. You know what shoes of mine have lasted the longest? American made work boots. Thats what shoes. They cost me 140$, but they are frigen bomb proof.

Re:The next chinese will be robots (3, Interesting)

Locke2005 (849178) | more than 3 years ago | (#32486148)

I gave up on buying $60 cowboy boots and started buying $200 boots a long time ago. The reason? They are not only more comfortable, they last so much longer that they are actually cheaper in the long run. Tony Lamas are still made in El Paso, and are much cheaper at the factory stores there.

Re:The next chinese will be robots (1)

CapnStank (1283176) | more than 3 years ago | (#32486244)

But for those of us who prefer running, certain sports, etc. "Workboots" just don't cut it. My last pair of shoes were some simple DC skater-style shoes. They lasted me two years until I wore the sole down so far it burned a hole through the bottom. I went to buy another pair of DC because they were so good to me but I sadly found that my local store didn't have any leather ones anymore. Only synthetics and the sole on the new shoe was thinner than some parts of my two year old shoes...

You're right saying consumerism is a part of the problem but the solution isn't "HEY EVERYONE BUY x PRODUCT"

Re:The next chinese will be robots (1)

blueg3 (192743) | more than 3 years ago | (#32486144)

The fact is, most of us can't afford to live in an america where everything is made by people who are paid $46,000 a year

That America doesn't exist. The median income for individuals 25 and older in the U.S. is $32k (or $39k among only full-time workers) -- a bout 70% of the U.S. population earns less than the figure you quoted. Minimum wage is about $12k/year.

That may have been said, but .... (3, Insightful)

King_TJ (85913) | more than 3 years ago | (#32486182)

This also illustrates why in the USA, *small business* success is so critically important to any hope of "economic recovery".

When we talk about such items as $75 Nikes that "would cost $300 if they were made in a factory full of USA union labor, paid $45K plus per year", we neglect the possibility that SMALL companies making unique shoes could compete nicely - providing a truly USA made shoe at more like an $85-100 price point - while still earning respectable salaries for the people working there. Sure, they won't employ nearly as many people as a big factory, or even sell as much product -- but the point is, MANY smaller companies can co-exist, all offering alternatives for footwear.

Sometimes, I think we're so fixated on the concepts of "economies of scale" that we forget it's not a universally beneficial thing? When a business grows to a certain size, they have to spend a LOT of money on advertising/marketing to convince people their product is the one they want to buy/keep buying. (And how is all of THAT paid for? Yep ... rolled right back into the price tag of the product.) They also tend to make so much product, it starts making economic sense for them to automate/mechanize all sorts of processes that allow hiring cheaper labor (employees who don't need as many skills or as much intelligence, because they're pressing a button or pulling a level repeatedly, instead of *understanding* how to do whatever process happens as a result). That leads to a lot of low-paying jobs, vs. a relatively small number of higher-paying ones.

With many smaller businesses turning out similar, competing products - you tend to encourage people to buy more regionally/locally from whichever supplier is nearby -- and they can sell to those folks without needing to launch multi-million dollar marketing campaigns with celebrity sponsors, etc.

China Wins Big no matter what (5, Interesting)

tekrat (242117) | more than 3 years ago | (#32485870)

The Chinese are in a wonderful and unique position to take over as the number one superpower and number one consumer of goods, turning the USA into a number 2 or 3 within a few years. Let's start off with the fact that China now has a "middle class" of fairly affluent working class people that is over 300 million strong.

Let me repeat that in case you missed it: Their middle class is as large (or larger) than the entire population of the USA. This middle class is buying. China can now self-sustain. In other words, there are enough people now in China with the money to buy stuff made in China.

So, we, the USA, need the Chinese more than than China needs the USA. Furthermore, the Chinese are smart enough to both "outsource" to cheaper countries than themselves, while acting as middle-men to their USA 'bosses', and while we will eventually get around to cutting them out (as we did to Japan), it will be too late by then, China will be selling in the USA directly (as the Japanese do, with established brands), and, as I said, they can self-sustain.

China, however, may "import" slave-labor (or nearly so, within boundaries of international law), allowing the Chinese a more relaxed lifestyle while imported workers do the grunt work for low wages. This will allow them to keep prices low and maintain their existing infrastructure of factories.

We just need to be careful though that *we* aren't the slave labor they decide to import.

Re:China Wins Big no matter what (5, Insightful)

Joey Vegetables (686525) | more than 3 years ago | (#32486150)

While your point is valid overall, I would point out that the definition of "middle class" in China or any developing country is not the same as in the West. The whole structure of production and prices of available goods and costs of living is wildly different. For instance, middle-class workers in China or India are very unlikely to be able to afford two cars, a huge house in the suburbs, and wide screen TVs in every room. On the other hand they are much more likely than we are to be able to afford nannys, maids, drivers, etc., because the cost of domestic labor is much cheaper there compared to here. These differences make it very difficult to compare purchasing power, especially when currency exchange rates, interest rates, and labor costs are not allowed to clear in most countries for political reasons.

Re:China Wins Big no matter what (1)

sethstorm (512897) | more than 3 years ago | (#32486374)

Actually, they stand to lose more if we default on the debt.


We just need to be careful though that *we* aren't the slave labor they decide to import.

If that happens, I will not hesitate to send them to see Vincent Chin in the hereafter.

Re:China Wins Big no matter what (2, Insightful)

russotto (537200) | more than 3 years ago | (#32486390)

The Chinese are in a wonderful and unique position to take over as the number one superpower and number one consumer of goods, turning the USA into a number 2 or 3 within a few years.

No, they aren't, and the reason is the currency. They've been subsidizing the rest of the world on the backs of their own people by keeping their currency undervalued and not freely convertible (by Chinese people). The only way they could "take over" as number one consumer would be to eliminate that policy and allow their citizens to enjoy the fruits of their labors... but doing so would raise the costs of Chinese good enough that the boom could not be sustained.

They will be made in the next cheapest country (4, Insightful)

Akido37 (1473009) | more than 3 years ago | (#32485874)

Anyone remember "Made in Japan"? Then "Made in Taiwan"? Now, "Made in China". Manufacturing moves to the cheapest location. This is how globalization works, for better or worse. If China becomes too expensive, somewhere else will arise to take up the slack and open near-slave labor factories.

Hopefully, this results in a rise in living conditions for everyone - My personal pessimism has doubts.

Re:They will be made in the next cheapest country (0)

Anonymous Coward | more than 3 years ago | (#32485988)

Anyone remember "Made in Japan"? Then "Made in Taiwan"? Now, "Made in China". Manufacturing moves to the cheapest location. This is how globalization works, for better or worse. If China becomes too expensive, somewhere else will arise to take up the slack and open near-slave labor factories.

Hopefully, this results in a rise in living conditions for everyone - My personal pessimism has doubts.

Probably manufacturing will move to india... or africa. Maybe this manufacturing business is actually the best for of aid you can give a low developed country?

Re:They will be made in the next cheapest country (0)

Anonymous Coward | more than 3 years ago | (#32486048)

Haiti or another middle/south america could be the next one. Take Haiti for example- accessable by sea, near wage parity with china, cheaper shipping (IE materials from the americas, to destination markets in europe and americas. and it's also pretty close to panama. could even be worth it enough to withstand the hurricane season.

Re:They will be made in the next cheapest country (0)

Anonymous Coward | more than 3 years ago | (#32486068)

Yes, the labor source will trickle down. My only glint of hope is that the world is finite, and *eventually* we'll reach a point where we already outsource to the cheapest possible location, and there's nowhere else to go except to comply with the increasing living conditions around the world and adjust your price accordingly.

However, for this to work, we must reach the stage where every inhabited location in the world is at a minimum politically and economically stable enough to support construction of factories (without them bombed by an airstrike, invaded by rebels, looted by criminals, or seized by the next ultranationalist dictator), basic training of workers and conditions which allow a stable working day (without them being killed by rebels or dying/missing too much time due to disease/hunger), sufficient supply chain management (not requiring too expensive military escort to prevent attacks on convoys, being decimated by excessive government corruption, or being subject to excessive tariffs/taxes), and a few other requirements like that.

In other words, we're decades if not centuries away.

Re:They will be made in the next cheapest country (1)

NonUniqueNickname (1459477) | more than 3 years ago | (#32486126)

In the future everything will be manufactured by robots.

Re:They will be made in the next cheapest country (1)

SOdhner (1619761) | more than 3 years ago | (#32486314)

In the future everything will be manufactured by robots.

Fine, fine, but where will the robots be made? And as for slave labor, well, there's always some job that won't be done with robots - the fact is that we have a long way to go before robots are cheaper to replace than kids. If we ever somehow pass that line (we won't) then I guess we can turn the poor into Soylent Green.

Re:They will be made in the next cheapest country (0)

Anonymous Coward | more than 3 years ago | (#32486372)

I know a guy who knows a guy who manufactures springs for train trucks in BC and sells them to China.

Interesting that it was economical enough to do so. There must have been some fancy labour-saving technology used in the production.

Re:They will be made in the next cheapest country (1)

sethstorm (512897) | more than 3 years ago | (#32486406)

All the goods were junk, and only Japan tried to give any attention to quality.

The rest continue to output junk from despots.

Beginning of the end? (1)

aztektum (170569) | more than 3 years ago | (#32485910)

Now that the Chinese are raising wages (not just Foxconn either, I read about Honda paying more to one of its parts makers there), this is going to spread. Sure you can move more to other countries, but none have the sure population that China has, except India, but I would argue they're well beyond China as far as worker rights and if China is getting more money they're going to want more.

How long until they cost benefit you have from cheap labor + shipping back to the U.S. isn't worth it? It's only a matter of time.

China is not stupid... (1)

boggin4fun (1422043) | more than 3 years ago | (#32485960)

China will not allow themselves to be unseated as the manufacturing backbone of the majority of the world. If anything, they will allow for inflation within the economy, thus effectively negating the salary raises. It is all a math problem and china did not get to where they are now by being stupid.

two times nothing is still nothing (2, Insightful)

swschrad (312009) | more than 3 years ago | (#32485990)

curiously, as costs at the bottom rise, some manufacturing comes back to the home shores. sometimes it's shipping costs, sometimes it's snafus avoided, sometimes it's market pressure to have a made in USA alternative.

the rest of the market goes downhill further, as they move to green monkeys in Kenya, with the local human population pushing chips and solder into the trees, and catching the hot circuit boards as the monkeys drop them down.

when the monkeys need too many figs to keep working, it will go to pirahnas on the Amazon, or little green men from space who need busywork while their flux capacitors recharge, or whatever.

best you can do as a consumer is reward those who don't participate in the race to the bottom.

who cares where it's made..... (2, Informative)

Lumpy (12016) | more than 3 years ago | (#32486028)

I care where I get it. I've been getting more and more used instead of new. There are a lot of "trendy" types that sell things use at a insane rate. I got a iPhone 3Gs that was like new for $159.00 off ebay for her used.

I buy everything used now. you get more value for the dollar.

I end up with more stuff and more money. It's a Win-Win.

Government debt (1)

WarJolt (990309) | more than 3 years ago | (#32486046)

not from our skyrocketing government debt, but rather the increasing cost of doing business in China.

Government debt and personal debt still can cause this. It's hard to ignore that our fed is printing money like devaluing the dollar. The trade deficit with China is unsustainable, but let us not ignore the devaluation of the dollar. In 2005 our monetary base was about $800 billion. Now it's over $2 Trillion.

Bigger picture (2, Interesting)

MonsterTrimble (1205334) | more than 3 years ago | (#32486138)

My boss would have a field day with the summary.

As he likes to say, percentages mean nothing without harder numbers. Let's use one of the original articles [marketwatch.com] for number basis:

Wage hike: $84 million per quarter over entire company (with a raise of 20%)
Workers: 300,000 at one plant.
Assume 300,000 workers are 1/4 of entire workforce

$84 million * (100%/20%) = $420 million
$420 million / 1.2 million workers = $350 per worker per quarter.
Assume 1 quarter is 13 weeks, with each week being 40 hours
$350 / (13*40) = $0.6731 per hour.

Assume that it takes 2 man-hours to build a motherboard
Assume $100 motherboard is marked up 70%

Motherboard Cost: $30
Percentage increase: (2*$0.6731)/$30=4.49% increase in costs

Assume price increase carried through the entire pricing package, The former $100 motherboard is $104.49 now. Not a world class problem.

Don't Forget Eastern Europe (1)

damn_registrars (1103043) | more than 3 years ago | (#32486154)

Many former 2nd-world countries are scaling up their high tech production of ... just about everything. Just one example, my current blackberry was made in Hungary; but of course there are many many other similar examples of electronics coming from your favorite former soviet bloc country.

To address the question (1)

ImABanker (1439821) | more than 3 years ago | (#32486162)

From my experience, the answer is likely vietnam or cambodia. I have seen a few firms considering pulling out of china due to rising wages/price inflation, and they were all looking at these two countries.

It won't change (1)

Random2 (1412773) | more than 3 years ago | (#32486212)

I find it unlikely that China plans to do that, and so does the US:

http://www.uscc.gov/annual_report/2009/annual_report_full_09.pdf [uscc.gov]

As pointed out in the article, not only does that fixed price help China's markets grow and build cash reserves; but high technology specifically is a critical aspect of China's plans. Thus, it's very unlikely that they're going to stop trying to bring over development of these high technologies until they finally hare a more integral process in their development.

They've been stubbornly holding the renminbi low for years, and there' no real reason to stop now, not until they have a larger say in the IMF.

Where Will Your Next Gadget Be Made? (1)

John Hasler (414242) | more than 3 years ago | (#32486392)

Depends on what I build next. If it's the new arena drag I'll build it out in the machine shed where I do my welding. Motorizing the grinder Robin uses to powder beet pulp I'll do out in the shop. If it's an electronic gadget such as the tractor ECU I've been planning it'll be made mostly upstairs and here on my desk.

Epson and HP (1)

Ukab the Great (87152) | more than 3 years ago | (#32486418)

A hundred years from now most things will come out of an inkjet printer. And then you have the real thorny question of what we'll do with the unemployed global masses of humanity when factories have been made obsolete. Not everyone can be employed making matter printers.

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