Outsourcing US jobs

Hi, new here but have been discussing this on a baseball site I frequent and thought it may be more productive in a forum that focuses strictly on politics. We shall see...

An issue that is complex and not an easy fix.

I hear many tv talking heads yammering about how US companies ship jobs to China (or wherever else) and pay slave labor rates, and profit off the backs of the poor Chinese (or whatever other country).

The reality is even though the US dollar has been weakened over the last 12 years 1 US dollars is equal to 6.25 Chinese Yuan. So if you are paying these people 2 US dollars an hour (slave labor rates) it is actually 12.50 Yuan/hr (Probably not a slave rate, and probably a decent living wage). I don't pretend to know what one yuan will buy in China, but I am just imagining that it is similar, if not as extreme as when you could go to Mexico and live like a king for a couple hundred bucks or less. If anyone is more knowledgeable in this area please clue me in.

So if a company can spend 2 US dollars as opposed to US rates, which are likely 5-10 times higher depending on the company, it's not hard to see why that is a pretty solid business move.

There's definitely something to be said for striking a balance, because if your cheap labor is producing your product yet your target market can't afford to buy it because so many are now out of work, that is a problem.

Perhaps we could penalize US companies who ship jobs overseas, but it'd take a pretty hefty penalty to offset the gains of the cheap labor.

The good news on this front is the fact that since the yuan has increased in value while the dollar has declined, the savings in labor cost isn't as great as it once was. Couple this with rising costs of oil, and by extension the cost of shipping products back to the US for consumption and the incentive may slowly be waning.

cledussnow said:

Hi, new here but have been discussing this on a baseball site I frequent and thought it may be more productive in a forum that focuses strictly on politics. We shall see...

An issue that is complex and not an easy fix.

I hear many tv talking heads yammering about how US companies ship jobs to China (or wherever else) and pay slave labor rates, and profit off the backs of the poor Chinese (or whatever other country).

The reality is even though the US dollar has been weakened over the last 12 years 1 US dollars is equal to 6.25 Chinese Yuan. So if you are paying these people 2 US dollars an hour (slave labor rates) it is actually 12.50 Yuan/hr (Probably not a slave rate, and probably a decent living wage). I don't pretend to know what one yuan will buy in China, but I am just imagining that it is similar, if not as extreme as when you could go to Mexico and live like a king for a couple hundred bucks or less. If anyone is more knowledgeable in this area please clue me in.

So if a company can spend 2 US dollars as opposed to US rates, which are likely 5-10 times higher depending on the company, it's not hard to see why that is a pretty solid business move.

There's definitely something to be said for striking a balance, because if your cheap labor is producing your product yet your target market can't afford to buy it because so many are now out of work, that is a problem.

Perhaps we could penalize US companies who ship jobs overseas, but it'd take a pretty hefty penalty to offset the gains of the cheap labor.

The good news on this front is the fact that since the yuan has increased in value while the dollar has declined, the savings in labor cost isn't as great as it once was. Couple this with rising costs of oil, and by extension the cost of shipping products back to the US for consumption and the incentive may slowly be waning.

Click to expand...

Chinese workers wished they made 2 bucks an hour. Chinese workers make 23-37 cents an hour and work 80 hours a week. That's 1.45 - 2.33 Yuan an hour.


washingtonpost.com: Chinese Workers Pay for Wal-Mart's Low Prices


Most of the 2,100 workers here are poor migrants from the countryside who have come to this industrial hub in southern China for jobs that pay about $120 a month.

snip...

Li said these factories often require employees to work as many as 80 hours per week during the busy season for $75 to $110 per month,


http://coinmill.com/CNY_USD.html#USD=.23

http://coinmill.com/CNY_USD.html#USD=.37

cledussnow said:

Hi, new here but have been discussing this on a baseball site I frequent and thought it may be more productive in a forum that focuses strictly on politics. We shall see...

An issue that is complex and not an easy fix.

I hear many tv talking heads yammering about how US companies ship jobs to China (or wherever else) and pay slave labor rates, and profit off the backs of the poor Chinese (or whatever other country).

The reality is even though the US dollar has been weakened over the last 12 years 1 US dollars is equal to 6.25 Chinese Yuan. So if you are paying these people 2 US dollars an hour (slave labor rates) it is actually 12.50 Yuan/hr (Probably not a slave rate, and probably a decent living wage). I don't pretend to know what one yuan will buy in China, but I am just imagining that it is similar, if not as extreme as when you could go to Mexico and live like a king for a couple hundred bucks or less. If anyone is more knowledgeable in this area please clue me in.

So if a company can spend 2 US dollars as opposed to US rates, which are likely 5-10 times higher depending on the company, it's not hard to see why that is a pretty solid business move.

There's definitely something to be said for striking a balance, because if your cheap labor is producing your product yet your target market can't afford to buy it because so many are now out of work, that is a problem.

Perhaps we could penalize US companies who ship jobs overseas, but it'd take a pretty hefty penalty to offset the gains of the cheap labor.

The good news on this front is the fact that since the yuan has increased in value while the dollar has declined, the savings in labor cost isn't as great as it once was. Couple this with rising costs of oil, and by extension the cost of shipping products back to the US for consumption and the incentive may slowly be waning.

Click to expand...

well those jobs arent coming back and most have been gone since the 80's anyways,the us couldnt compete with up and coming nations and producing products to sell to themselves produced no growth whatsoever,which will cause loss of jobs.since the us cant compete with cost on products,it has shifted to a service economy in the 80's and moved its manufacturing priority to high quality products that people will buy regaudless of price(example tools ormost products made of us steel)

but before the chinese it was the germans and the japanese.i could go through my grandfathers old pile of junk and everything made from the 6-s-70's that was not top of the line top dollar said made in japan.the japanese back then were in the same boat china is now,but their quality went up with time,and so did their standard of living and their prices,which left most countries to seek cheaper countries to make their products.

germans took an approach that was a balance of quality and price,which made their products appealing to most of the world that couldnt afford us prices but didnt want japanese junk.


japan was replaced by china,the same argument thats been made since the 60's about outsourcing is still going on,and people still economically fail to grasp the idea that a country this large cannot survive off of manufacturing jobs that cant sell,and the products that do sell are still made here,because they are still profitable and for select products quality is a must over price.

cledussnow said:

Hi, new here but have been discussing this on a baseball site I frequent and thought it may be more productive in a forum that focuses strictly on politics. We shall see...

An issue that is complex and not an easy fix.

I hear many tv talking heads yammering about how US companies ship jobs to China (or wherever else) and pay slave labor rates, and profit off the backs of the poor Chinese (or whatever other country).

The reality is even though the US dollar has been weakened over the last 12 years 1 US dollars is equal to 6.25 Chinese Yuan. So if you are paying these people 2 US dollars an hour (slave labor rates) it is actually 12.50 Yuan/hr (Probably not a slave rate, and probably a decent living wage). I don't pretend to know what one yuan will buy in China, but I am just imagining that it is similar, if not as extreme as when you could go to Mexico and live like a king for a couple hundred bucks or less. If anyone is more knowledgeable in this area please clue me in.

So if a company can spend 2 US dollars as opposed to US rates, which are likely 5-10 times higher depending on the company, it's not hard to see why that is a pretty solid business move.

There's definitely something to be said for striking a balance, because if your cheap labor is producing your product yet your target market can't afford to buy it because so many are now out of work, that is a problem.

Perhaps we could penalize US companies who ship jobs overseas, but it'd take a pretty hefty penalty to offset the gains of the cheap labor.

The good news on this front is the fact that since the yuan has increased in value while the dollar has declined, the savings in labor cost isn't as great as it once was. Couple this with rising costs of oil, and by extension the cost of shipping products back to the US for consumption and the incentive may slowly be waning.

Click to expand...

Very good points…

However there few things you need to understand. Companies could have moved to any place in the world employ whomever they want pay slave wages by our standards but probably good living by the local standard. There is nothing new here. Companies could and would do that to reduce cost of manufacturing. However before the 1990s if you did that, then you had to pay a tariff on the goods manufactured outside of US and then if you wanted to sell them in US, you either had to raise the price or reduce your profit margin. So it turned out the be a wash and not worth the hassle of dealing with overseas labors plus the added negative of not building US brands. Actually 95 of western world countries including China have these laws we are one of the few (thinking probably the only one) who abolished its tariff laws to this degree.

We also wore into law that companies would receive subsidies if they move their manufacturing to overseas. That was done during republican revolution and when they had the majority and signed by Clinton.

So in effect you as a tax payer are paying companies to make you unemployed.

It is impossible to Buy American these days…Toyota is built in Michigan, Chevy is made is Mexico. Ford engine is made by Mazda and assembled in Canada.

The big questions are … manufactures move oversea to reduce manufacturing overhead, but seldom that translates to lower cost of goods but rather more profit for the shareholders, and sadly that does not translates to more taxes back in US. With all the subsidies and tax loopholes US government which means “WE the People” is actually paying the profits that goes into the pockets of the shareholder and get nothing back. That is called Corporate welfare and it has to stop.

Ether you bring Tariff back or you increase taxes on companies who have manufacturing outside of US (or reduced taxes on those who have manufacturing inside of US). Remember 63% of US corporation pay no taxes on profits. Google pays on the average 2%. Chevron pays negative taxes (they actually get more government subsidy than they pay taxes).

And US is the only country that does that. This has to stop.

Diving Mullah

Yeah I just picked a random number for example's sake.

The question would be: what is the buying power of that 120 per month?

It would seem that if people are moving to take these jobs they must be decent wages for them no?

@ Diving:

I agree that the subsidies and tax breaks need to stop.
I also agree that we should bring some penalties on these companies that are moving jobs overseas, yet are based here to take advantage of all of the loopholes and great living conditions.

Are you saying that US produced goods have tariffs placed on them in just about every foreign country they are sold in?
I did not realize that. If that is indeed the case then that is definitely an area that needs to be addressed by our lawmakers.

I don't understand anyone in the US who thinks it a good thing that our skilled jobs are going to overseas at a fracture of the cost and skill. Microsoft is just one of many companies training unqualified people overseas at a fraction of the cost with no certs, to do the same jobs we had to pay thousands of dollar to learn to do. But I don't care at this point, let the country burn to the ground. Nobody cares at all.

cledussnow said:

The reality is even though the US dollar has been weakened over the last 12 years 1 US dollars is equal to 6.25 Chinese Yuan. So if you are paying these people 2 US dollars an hour (slave labor rates) it is actually 12.50 Yuan/hr (Probably not a slave rate, and probably a decent living wage). I don't pretend to know what one yuan will buy in China, but I am just imagining that it is similar, if not as extreme as when you could go to Mexico and live like a king for a couple hundred bucks or less. If anyone is more knowledgeable in this area please clue me in.

Click to expand...

Actually the Chinese Yuan is kept artificially low compared to the dollar in order to basically subsidise Chinese corporations and increase investment and purchasing of chinese goods.

Also they are slave rates ... given the living standards they can afford.

cledussnow said:

Perhaps we could penalize US companies who ship jobs overseas, but it'd take a pretty hefty penalty to offset the gains of the cheap labor.

The good news on this front is the fact that since the yuan has increased in value while the dollar has declined, the savings in labor cost isn't as great as it once was. Couple this with rising costs of oil, and by extension the cost of shipping products back to the US for consumption and the incentive may slowly be waning.

Click to expand...

unfortunately some sort of protectionism is necessary, Unions will help, since they slow offshoring, and something like a co-determination law, like they have in germany where half the board of directors are elected by the workers, would prevent offshoring.

currency manipulation won't do the trick, there are so many negative externalities that could happen.

cledussnow said:

@ Diving:

I agree that the subsidies and tax breaks need to stop.
I also agree that we should bring some penalties on these companies that are moving jobs overseas, yet are based here to take advantage of all of the loopholes and great living conditions.

Are you saying that US produced goods have tariffs placed on them in just about every foreign country they are sold in?
I did not realize that. If that is indeed the case then that is definitely an area that needs to be addressed by our lawmakers.

Click to expand...

Not in every country but almost all of Western First World Countries. I actually don't know any the don't have the tariffs but I have not checked every single one that is why I said almost all.

But contrast many third world countries are the opposite. The WHO and IMF goes to a whatever third world nation and says I will forget portion of your debt if you lift the tariff on our say fruit imports. The country has no choice and does it, then of course the price of fruits crashes and drives the local farmers out then comes the company and raises the price and then country ends owning more than before. This happens all the time with poultry, fishing, meat, vegetable and .... and I can name at least 20 to 30 countries who have suffered this way...

In a way we have too... oddly one of the few in the western world countries(because we don't protect our local market).

Diving Mullah

cledussnow said:

Yeah I just picked a random number for example's sake.

The question would be: what is the buying power of that 120 per month?

It would seem that if people are moving to take these jobs they must be decent wages for them no?

Click to expand...

A decent wage compared to what? Anytihng is"decent" if your choice is staying in your village and getting paid ZERO. This is the situation in China.

I think that putting taxes on those who outsource or fines are fine. I agree that most of what is gone is gone.

With our wage structure it is virtually impossible to out compete countries who treat thier people like dirt. The idea would be to make the work place a better place to work, give the employees a voice like we use to, promote the superiority of our goods from theirs and create a national pride in buying American

This is simply racism, no more no less. An American should have a job over a Chinese why exactly? Being born in one geographical area, The U.S.A, rather than another geographical area, the rest of the world, entitles you to something? Racism, pure and simple.

This topic is full of hypocrisy. Employeers Outsource jobs to save money. Consumers are notorious for wanting to save money. Consumers happily purchase products 'made in China' rather than the U.S.A. Because consumers wish to save money. The hypocrisy is obvious.

Racism is a bit of a stretch.

Although I will agree that the hypocrisy is obvious.

I addressed this in the other forum where this topic originated:

The REAL bottom line in my mind is that Americans are unwilling to actually follow through on their supposed convictions. If you have a problem with companies who outsource to China then STOP BUYING THEIR PRODUCTS!

There really isn't an easier solution.

Unfortunately too many people lack the will power to actually live the values they claim to have. Similar to the meme concerning the occupy wall street movement people protesting big corporate greed while drinking a Starbuck's coffee, talking on their Apple I-phone, with their Eddie Bauer bags and J Crew hats...