reggieb Offline Upload & Sell: Off
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ckcarr wrote:
In 2016 the average annual Chinese manufacturing wage was 59,470 CNY or $9,114 per year.
In 2016 the average US manufacturing wage was $19.43 per hour, or $40,414 per year.
Based on average wages alone the cost of manufacturing in China is roughly 22.6 % of what it costs in the US.
American manufacturers who actually follow the law are also saddled with FICA @ 6.7%, Medicare @ 1.45%, Federal Unemployment, State Unemployment, Workers compensation, vacation time, sick time, holidays (all downtime because the employee isn't working), overtime rates when needed, and of course medical and dental insurance... not to mention group life, possibly short and long term disability insurance premiums... And, the highest federal and state tax rates in the world (especially in California). Total of just the employee burden is typically another 40% on top of the wage.
So to be fair, a Chinese competitors L-Bracket identical to an L-Bracket made by Really Right Stuff and being sold for $160 by RRS ought to be sold by the Chinese imitator for $36... or 22.6% of the RRS price - following the logic here
If you're paying 1/3 of the price, which would be $53 you're getting ripped off!...Show more →
Of course, while the average American manufacturing working makes more than the average Chinese, they're more productive in terms of units, due to a higher level of automation in the US. China is now shifting that way, too. But we're further ahead. So, of course, your numbers aren't accurate for final cost of production. Which doesn't determine price anyway, by the way - at least not directly. In reality, shipped cost of the RRS gear is probably not much more than the chinese stuff, certainly not to the level that you're describing.
And by the way, why shouldn't you buy based on comparative advantage? If they make that widget for less in China, buy it from China. There are larger durable goods that should be produced in the USA, because their shipped cost will be lower than the same product produced anywhere overseas. Why not shift manufacturing to those areas where WE have a comparative advantage? Certainly our manufacturing sector today is not suffering. It's what, the second largest employer and producing more than we ever have?
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