This isn't true. First, Dell started off building computers in the US. Namely, in Dell's dorm room, then later in a Texas Manufacturing Plant. Dell's claim to fame was build to order. It got the parts cheap, and put the product together cheap in the US. Eventually it moved operations. Apple didn't build to order, but it did own the manufacturing. Apple did away with it's own manufacturing plants for a reason different to save on labor cost. Under accounting rules, Apple has to account for inventory it has on hand. When it owns the factories it has to count all the inventory even at the factory. Now Apple only has to count inventory it has actually received. It benefits Apple to have as little inventory on hand as possible.
Why everybody went overseas was all the rich people got to together and convinced the government to do away with tariffs that have been in place since the beginning of this Country. They did this in the richest economic times this Country has ever had. Namely the mid to late eighties. These tariffs were used to keep competition fair so Americans didn't have to compete with essentially slave labor in Countries like China. After the so called free trade agreements went into effect, hundreds of thousands of jobs went overseas, and both federal and local government have lost hundreds of millions of dollars in taxes from income and tariff related taxes. Now the Chinese get to keep those taxes, and are gracious enough to loan us Billions of dollars so the rich can get even more tax relief.
Yet, you are correct in the sense that people do often go with the lowest sticker price. Unfortunately, now that most manufacturing is in China the prices have not really come down for many products. It is just the manufacturers save money in taxes thereby making more profit.
Further, people pay more now because local governments are having to raise taxes and cut services to make up for the tax loss.
Quote:
Originally Posted by jmmx
That is what many people say. But when the chips are down they all run to the discount stores with the cheapest imports. This is what fueled the move to overseas labor. Those who did not move could not compete.
This is the model pioneered by Dell. Everyone else followed out of necessity.
Given the pressure that FoxConn is putting on Pegatron in electronic manufacturing in the region, the pay rates are slowing increasing. To put these rates in perspective, consider the following reported/official statistics:
in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.
Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)
As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.
This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.
Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?
How many of you will whine when Apple is unable to meet demand??
Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?
I would not be surprised if Apple is funding the additional hourly pay.
Why can't Apple do this, it would massively boost Americas economy.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
Not to mention the ridiculous assertion that having unskilled, overpaid factory workers would somehow "massively boost" an economy like ours. We already have plenty of those, they're called the UAW, and they managed to run our auto industry into the ground.
How much more would you be willing to pay for your iPhone to provide higher wages in China?
I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.
I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.
First off, I'm glad to see you posting again ... I've not seen much of you lately ... welcome back. Secondly, I'd be interested in your view of a scenario that has been rolling around in my mind for a few years now.
I'm of the mind that we have to find a way to increase manufacturing in both of our countries. Not everyone is going to have the "smarts/education" to work in the high tech industry. The problem, as I see it, is that unless all manufacturers are willing to do it then the ones who don't will have an unfair advantage over those who "produce at home".
At the risk of being labeled a "communist or socialist" I would suggest that governments will have to place some serious import duties on that which is not manufactured at home. This would give all companies an option .... pay "our wages to our workers" .... or pay higher "taxes" to our governments .... and at the same time ensuring that no company would have an unfair price advantage. How do you feel about that kind of a solution?
Lastly, I love your signature tag .... the only change I would make is going from this: It is an extreme form of skepticism .... to this: It is an extreme form of arrogance. I don't know .... just seems to be more fitting for this site. Thoughts?
I don't think anyone would disagree that intellect, creativity and motivation for profit are desirable attributes in our free market society, but I also believe we have possibly gone too far in depending on it exclusively. We can only give away so much of our industrial capital before we run into an imbalance. We cannot keep coming up with game changing technologies at the rate necessary to fuel our economy. The US gave away cameras, stereos, tvs, computers, auto, printing, textiles, steel, agriculture and a host of other lucrative businesses to concentrate on financial, academic and theoretical sciences, leaving our public education and blue collar industrial capabilities to die. Politics has a lot of responsibility in this social demise but to think this current model is sustainable is pure fantasy. It is a dead end and it is probably already too late to change course.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
There is a lot of issues in your comment...but the japanese were able to come to the US, build auto plants, use american workers and produce quality cars.
Granted iPods are different to cars but it could be done...rather than filling the skies with exhaust fumes from 747's delivering all our Mac gadgets....
Given the pressure that FoxConn is putting on Pegatron in electronic manufacturing in the region, the pay rates are slowing increasing. To put these rates in perspective, consider the following reported/official statistics:
in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.
Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)
As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.
This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.
first, does US statistics takes account of housing cost into the consideration? as far as i know, those chinese factory workers are provided with sort of free living. housing is a big chunk of living cost as i hope i can make this assumption.
second, it is true that wage is one of reasons that manufacture moves from taiwan to mainland china. another reason one has to consider and can not neglect is that the pool of skilled workers. taiwan has about 23million of people in total and let us say 20% of them doing manufacture work, it is only about 5 millions. just manufacturing is not enough, as it has to be a chain of industries: chip fab, component factories, etc. it might be that other countries might not be able to provide such steady source of workers in term of headcounts and skills at lower rate.
third, chinese gov. poured into hugh amount of effort in term of money incentives and free land usage, etc to encourage this massive manufacturing transformation. i don't think any other regions and countries have ever done it at this level. even japan in its old days can not match up to this level.
the only country who can catch up with china is india. but india has to spend hugh amount to build up its infrastructure frame work, such as power plants, roads, air transportation, etc. further government has to grand more incentives to manufacturing industry. the timing is critical because india does not enjoy the low material cost as china had over the past 20-30 years of development.
How much extra would manufacturing the iPhone in the US cost? I'd be willing to pay a premium if I knew that the workers were being treated well. I know that Nokia, Sony Ericsson, Samsung, LG, et al still all make at least some of their phones in their home country.
Comments
Are you sure? Pegatron is the one driving the workers to work on their most important holidays, Lunar New Year, more important then X'mas or New Year.
Pegatron is manufacturing partner of Apple- iPuppet.
This is OK. Children don't need a holiday anyway.
That's a good one.
because then their price won't be competitive, when everybody else are building their stuff in China.
Not to mention the long supply chain since many of the components would still be manufactured in Asia.
Why everybody went overseas was all the rich people got to together and convinced the government to do away with tariffs that have been in place since the beginning of this Country. They did this in the richest economic times this Country has ever had. Namely the mid to late eighties. These tariffs were used to keep competition fair so Americans didn't have to compete with essentially slave labor in Countries like China. After the so called free trade agreements went into effect, hundreds of thousands of jobs went overseas, and both federal and local government have lost hundreds of millions of dollars in taxes from income and tariff related taxes. Now the Chinese get to keep those taxes, and are gracious enough to loan us Billions of dollars so the rich can get even more tax relief.
Yet, you are correct in the sense that people do often go with the lowest sticker price. Unfortunately, now that most manufacturing is in China the prices have not really come down for many products. It is just the manufacturers save money in taxes thereby making more profit.
Further, people pay more now because local governments are having to raise taxes and cut services to make up for the tax loss.
That is what many people say. But when the chips are down they all run to the discount stores with the cheapest imports. This is what fueled the move to overseas labor. Those who did not move could not compete.
This is the model pioneered by Dell. Everyone else followed out of necessity.
Absolutely nothing.
I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.
Then again, I must be one of those crazy xenophobic isolationists.
How much more?
Ditto.
Why can't Apple do this, it would massively boost Americas economy.
Ha!
Everyone should be forced to take Econ 101.
in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.
Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)
As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.
This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.
Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?
How many of you will whine when Apple is unable to meet demand??
Hmm... trollers are here in full force today.
Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?
I would not be surprised if Apple is funding the additional hourly pay.
Ditto.
Why can't Apple do this, it would massively boost Americas economy.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
Not to mention the ridiculous assertion that having unskilled, overpaid factory workers would somehow "massively boost" an economy like ours. We already have plenty of those, they're called the UAW, and they managed to run our auto industry into the ground.
How much more would you be willing to pay for your iPhone to provide higher wages in China?
I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.
I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.
Atlas Shrugged
Read it
Ha!
Everyone should be forced to take Econ 101.
First off, I'm glad to see you posting again ... I've not seen much of you lately ... welcome back. Secondly, I'd be interested in your view of a scenario that has been rolling around in my mind for a few years now.
I'm of the mind that we have to find a way to increase manufacturing in both of our countries. Not everyone is going to have the "smarts/education" to work in the high tech industry. The problem, as I see it, is that unless all manufacturers are willing to do it then the ones who don't will have an unfair advantage over those who "produce at home".
At the risk of being labeled a "communist or socialist" I would suggest that governments will have to place some serious import duties on that which is not manufactured at home. This would give all companies an option .... pay "our wages to our workers" .... or pay higher "taxes" to our governments .... and at the same time ensuring that no company would have an unfair price advantage. How do you feel about that kind of a solution?
Lastly, I love your signature tag .... the only change I would make is going from this: It is an extreme form of skepticism .... to this: It is an extreme form of arrogance. I don't know .... just seems to be more fitting for this site. Thoughts?
Atlas Shrugged
Read it
I don't think anyone would disagree that intellect, creativity and motivation for profit are desirable attributes in our free market society, but I also believe we have possibly gone too far in depending on it exclusively. We can only give away so much of our industrial capital before we run into an imbalance. We cannot keep coming up with game changing technologies at the rate necessary to fuel our economy. The US gave away cameras, stereos, tvs, computers, auto, printing, textiles, steel, agriculture and a host of other lucrative businesses to concentrate on financial, academic and theoretical sciences, leaving our public education and blue collar industrial capabilities to die. Politics has a lot of responsibility in this social demise but to think this current model is sustainable is pure fantasy. It is a dead end and it is probably already too late to change course.
Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.
If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
There is a lot of issues in your comment...but the japanese were able to come to the US, build auto plants, use american workers and produce quality cars.
Granted iPods are different to cars but it could be done...rather than filling the skies with exhaust fumes from 747's delivering all our Mac gadgets....
Given the pressure that FoxConn is putting on Pegatron in electronic manufacturing in the region, the pay rates are slowing increasing. To put these rates in perspective, consider the following reported/official statistics:
in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.
Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)
As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.
This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.
first, does US statistics takes account of housing cost into the consideration? as far as i know, those chinese factory workers are provided with sort of free living. housing is a big chunk of living cost as i hope i can make this assumption.
second, it is true that wage is one of reasons that manufacture moves from taiwan to mainland china. another reason one has to consider and can not neglect is that the pool of skilled workers. taiwan has about 23million of people in total and let us say 20% of them doing manufacture work, it is only about 5 millions. just manufacturing is not enough, as it has to be a chain of industries: chip fab, component factories, etc. it might be that other countries might not be able to provide such steady source of workers in term of headcounts and skills at lower rate.
third, chinese gov. poured into hugh amount of effort in term of money incentives and free land usage, etc to encourage this massive manufacturing transformation. i don't think any other regions and countries have ever done it at this level. even japan in its old days can not match up to this level.
the only country who can catch up with china is india. but india has to spend hugh amount to build up its infrastructure frame work, such as power plants, roads, air transportation, etc. further government has to grand more incentives to manufacturing industry. the timing is critical because india does not enjoy the low material cost as china had over the past 20-30 years of development.
Absolutely nothing.
I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.
Then again, I must be one of those crazy xenophobic isolationists.
You absolutely don't have to be xenophobic nor isolationist to wish we could revive manufacturing in the USA.