Wednesday, January 18, 2012

Made in China

This article talks about the relationship between trade with China and how it has created a gap between high and low skilled jobs. Because the cost to make something in China as well as other third world countries is much less than making it in America, more and more companies are moving out of the US and setting up factories else where thus taking away factory jobs i.e medium skilled jobs from Americans. Without these medium skilled jobs, people who don’t have the ability to work a higher skilled job have to resort to a lower skilled job where the pay is much lower. This also creates an other gap between upper class and lower class. Many Americans believe that foreign workers are “stealing their jobs” which in fact it’s American companies taking away jobs from Americans. Many products made in foreign countries aren’t being sold by the third world country they are made in but in fact sold by American companies. American companies chose to have their produce made over seas because the cost of labor and raw materials cost less over seas.

4 comments:

Smith said...

You bring up a good point about the jobs being “stolen” vs. taken to other countries. Would you, as a business owner, stay in America and pay a higher overhead or cut your costs by taken production to another country? Do you see a viable solution to this problem?

Erin said...

This is an interesting economic fact. Bringing manufacturing back into the United States would also bring higher labor costs and higher corporate taxes. When a company has to decide where they want to produce there product they have to consider the beneficial factors of producing in foreign countries over the needs of the employment issues here. However, with rising taxes in China it is becoming less resourceful for companies to produce there.

michael.parleto said...

It will continue to happen until companies have a reason to keep production domestic. Now, companies can pay foreign workers a fraction of American minimum wage to do the same job, with fewer benefits (if any). The overhead of a factory in China is pennies compared to one in the U.S. Consumers need to get over it and start paying a premium for products and brands that are American made. If the U.S. government were to pressure countries like China and Mexico into implementing or increasing their minimum wage to the point that it is no longer cost effective to outsource jobs. Or, the government should implement some sort of tax on companies and products that are outsourced to the point that it isn't any cheaper to have products built overseas. That way, the jobs will come back to Americans, strengthening the economy.

Sarah Craig said...

Many Americans looks for products made in the US. For example my mother is one of these people. However if I was a new company starting up trying to grow fast, I would set up factories overseas then once my business took off I would start transferring some of the factories over to America. Plus if I produced in America and also sold in America, I wouldn’t have to pay for transportation from one country to another, just state to state.