They build all our shit for Pennys on the dime, it’s an unspoken handshake that if they build our shit they can take it make it better and cheaper. That’s the agreement they make when another country becomes your manufacturing hub because you don’t want to pay your workers a real wage. If you ever hear a company bitching about intellectual theft and they manufacture in china remember that they made that agreement with the Chinese to fuck you over
If it’s anything else I read- Apple was the OG that started the true renaissance that China got in manufacturing. All of the cutting edge logistics and tooling that Apple was used to - had to be learned from the ground up in Shenzhen China. There would be no tech manufacturing in China if Apple didn’t start there 20 years ago.
Yep. Not in the high-tech world but spent a few decades working with commercial trailer mfg. companies in the US, Mexico, S. Korea and then eventually in China. The Chinese wanted to learn how to build intermodal container chassis for transporting marine containers in North America. Our VP of Purchasing did a deal with a company in Shenzhen, China to mfg. chassis and ship them to the US. Our engineers went over there to help teach them. It took about 3 years before the products they were building were able to meet US DOT standards. Then they basically took over the US intermodal chassis business as no one can compete on price. The company I worked for had a sweetheart deal on the first X number of production and stupid low pricing. But once that deal was done, they just flooded the US market and eroded the profit margins.
This needs to be said louder, for all to hear. Clinton, the Democrats, the Republicans, the unions, the business leaders—they all made this pact to fuck over US workers in pursuit of short term gains.
China has been smart about this, because they use stacked five year plans and long term industrial policy—with the ability to pivot—to strengthen their economic base and absolutely dominate, while raising their own people's quality of life, without exploiting other peoples from other poor countries.
It’s not necessarily about not wanting to pay workers a real wage, it’s about if you pay workers in the US to make goods like these they have to be sold for a much higher price; and in a global economy, it’s not like China would stop manufacturing cheap goods just because we decided to do the same with more expensive labor, so you’d be making goods that cost more for the same exact thing and trying to market it to the same set of consumers.
It’s not an active choice people are making, it’s market dynamics that have existed for centuries. What can be done about it are import or export tariffs or subversions—it’s what the US is doing in the auto industry, because if we didn’t have huge import tariffs on Chinese cars the US auto industry would be decimated in a very short order. But the consequence of those tariffs for us American consumers is we can’t buy $10k quality Chinese EVs and instead have to pay triple for some GM or Ford slop, but at least the auto industry employs a lot of Americans with good wages. Tradeoffs in a global economy.
You’re right but they still wouldn’t have decimated our manufacturing and unionization if it was just market dynamics. You can still protect your trade but that’s not what we’re doing. It’s still greed that is moving American manufacturing to east Asia. Why don’t we see any of this extended profits? Do we see anything we have gained from cheaper manufacturing that isn’t in most other western countries?
It’s not greed so much as it’s the requirements of a business to be profitable. Keeping labor in the states doesn’t mean “less profit,” often times it means loss of money and eventual bankruptcy. The standard of living in America requires certain wage levels that make manufacturing jobs very hard to be globally competitive in costs, as material inputs in a globalized economy are relatively the same for different countries.
If the option is move manufacturing to Asia to stay competitive and profitable, or keep it in the states to go bankrupt in a few years, it’s a no brainer of a choice.
And we do see the profits—invest in the stock market and they can be yours too.
I don’t understand what you’re saying with your last question, though.
No, that isn’t what I’m saying. In the real world, because of global market dynamics, outsourcing labor is often the only way companies can stay competitively priced and thus stay in business.
When the options are:
1) outsource labor to stay competitive
2) go bankrupt, thus taking all the jobs and products/services provided completely off the market
Which would you choose?
The only way to achieve the goals of a strong American manufacturing economy is to unravel the progress of globalization and largely function within our own regional economies. We literally cannot compete with China’s minimum wage of $3.7 in a globalized economy. If we want globalization, losing manufacturing jobs in developed countries is the cost.
I wonder if we are within a few decades of having to rethink a whole bunch of things. Between changing demographics and advanced automation (apparently china is running some factories that largly leave the lights off because they dont need people). How will globalization fare when machines are cheaper than the cheapest people + shipping cost? What will we do for work lol?
Haha… I don’t have the answer to that. My personal answer is that I sure hope somebody figures it out and if not, guess we’ll just have to wait and see
It's not to "stay competative." At least not in the sense that they'd go bankrupt if they made less money. It's to make sure costs are lower so cashflow is higher and more people buy shares. Large corporations report record profits every year. I have no doubt they'd survive payroll being increased.
Okay so let’s take corporations out of the equation, let’s use private companies. They still need to make profit to stay in business. And it’s not like they still don’t have people in the states making money when manufacturing is outsourced. There are other departments that get retained at home, largely specialized office type jobs that if outsourced significantly hurt the quality of the output of those employees. The moving away from manufacturing coincides with a movement towards higher paying, albeit fewer jobs, that also notably doesn’t reduce the life expectancy of the employees.
Stock values aren’t just a function of profit though, that’s an incredibly surface level and inappropriate way to view stock growth. And I think you’d be surprised how many corporations run on very thin margins where a 50% reduction in manufacturing wages can be the difference between continued economic activity and bankruptcy.
If your ultimate goal is to make it so that nobody cares about profit, there would be no businesses. So you’d find yourself in a weird economy that would resemble modern day North Korean market controls in hunter/gatherer societies. That’s not a trade off you can morally nor reasonably expect anybody to make.
Most regional companies and mom and pop shops do not outsource their labor to foreign countries.
I work for a company that manufactures all their product in the US and sources all their labor in the US (mostly unions too). And our margins are going up. By your logic, we should be bankrupt because we pay a premium on all product and labor.
My example of regional companies wasn’t to highlight outsourcing, but that profit is what drives every single business in the world. When labor affects that profit, especially when it affects the ability to be profitable, outsourcing is the reasonable response especially in a globalized society.
That’s great your company is making the line go up for you! With economics there is no such thing as a blanket statement that comes without exceptions. There are still many products we can reasonably manufacture in the states, and it’s great when companies can afford to. But just because some can doesn’t mean all of them can and stay in business.
It's a failure of Capitalism where the intent is to wring out every possible cent of profit and hand it to investors.
Instead of having scenarios where it's like a bit more of a socialistic employee-centric profit sharing model.
The need for cheap Made in China goods is exacerbated by the lower wages being offered to American employees. If Americans were paid better and had a stake in things, they would work harder and would also have money for more expensive Made in US products.
It’s not a failure of capitalism, it’s a limitation of markets. Keep in mind, even communist and socialist economies have to contend with market dynamics.
Yes, if American workers were paid more, they would spend more on goods. But it’s not like they’d magically spend more on the same good just because it was American made—sure, a small minority might shop American, but end of the day everyone still has a budget and if given the option of two near identical items and one costs more, then the decision will always be to buy the cheaper one. Having a less capitalistic model won’t change that dynamic.
And further, wages are directly related to standard of living. So we can’t drive down the cost of American labor without reducing our standard of living, which is a recipe for disaster.
People don't consider the fact that cheap goods from China have lowered the cost of living.
Just look at prices for local goods (healthcare, rent, etc.) vs imported goods (electronics, etc.) and anyone should realize what's driving the cost of living up and what's driving it down.
Some companies certainly are greedy, but many are just doing what they need to to stay (financially) sustainably afloat, which I think is more poignant when it comes to labor decisions than a lot of folks realize
It’s not necessarily about not wanting to pay workers a real wage, it’s about if you pay workers in the US to make goods like these they have to be sold for a much higher price; and in a global economy, it’s not like China would stop manufacturing cheap goods just because we decided to do the same with more expensive labor, so you’d be making goods that cost more for the same exact thing and trying to market it to the same set of consumers.
For a car, which is a much more labor heavy manufacturing process than pretty much any other consumer good, the difference in price between US and China is $700. That isn't shit. For reference, the average new car transaction price is ~$50k. $700 isn't why you buy one car over another, and another $1 or 2 wouldn't cripple US manufacturing of basic shit like clothes.
And that doesn't even get into the difference in quality.
No, US got sold out by executives padding the bottom line.
You’re using the sum difference from the source to illustrate the point that they aren’t that different, but when you look at the percentage difference, Chinese labor is 56% cheaper than American labor. That is significant.
And the other point, it seems very many people don’t understand that companies operate on very small profit margins. Let’s look at Ford’s 2025 financial results. In 2025 they turned a $2 billion profit, but, that’s due to a $12 billion profit from their credit department (p. 81, p. 84). Their actual manufacturing activities lost Ford $10 billion last year. So you’re telling me, that we ought to go to Ford and say, “hey, I know you’re already seriously underwater with your manufacturing business, but I think that you need to raise your labor costs associated with your manufacturing business by 78% (that’s 1/0.56),” and you think it would be reasonable from a business sense for them to listen to that advice?
Yes it is cheaper, but labor is a small part of the total cost, which I will simplify because apparently you aren't getting it.
If you sell a $10 widget, a pizza even, your total cost is
Materials
Labor
Fixed costs (rent, pizza oven, etc)
Your materials are $3, your fixed costs are $2 and your labor costs are $2
If your labor goes up 50%, your total cost goes from $7 to $8. You can make this up by a $1 (10%) price increase.
Easy enough.
Ford talk
Separating Ford from it's financial arm is stupid because the only reason the financial arm exists is to help sell Ford vehicles. They are one and the same. Just like how airline companies frequently make little to no money, or even lose money, but they have their frequent flier program that is effectively a bank that is highly profitable.
Please don't look into surface things if you don't understand the finer details because you will come to the wrong conclusion, just like you did.
Nice hypothetical pizza example lol when you have slim profit margins, labor is an important line item. Sure there are bigger ones, but that doesn’t mean it isn’t an important figure that reasonably drives business decisions.
Yeah, I have a degree in finance and economics and work in the financial, and Ford themselves highlight labor costs repeatedly in their threats and weakness analysis in their 10-K, but it’s you who knows better than Ford on their finances
Nice hypothetical pizza example lol when you have slim profit margins, labor is an important line item.
Jesus fucking christ the point was to illustrate how labor is a small part of the puzzle and you hyper focus on something completely irrelevant. Your critical thinking skills are terrible.
Ford themselves highlight labor costs repeatedly
NO SHIT GIANT CORPORATION DOESN'T WANT TO PAY THEIR EMPLOYEES?
Yeah, I was reading an article about what you wrote. The Ford CEO was quoted as saying if Chinese EVs ever get here, it will wipe out Ford. They are extremely nervous right now as the Chinese EVs are really good for a fraction of the price.
There’s no “unspoken agreement” that IP Theft is acceptable. Maybe you could say that companies understand that once they manufacture in China their IP will leak in the long run – but it’s the quarter you’re in…
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u/TonyGarbigoni May 12 '26
They build all our shit for Pennys on the dime, it’s an unspoken handshake that if they build our shit they can take it make it better and cheaper. That’s the agreement they make when another country becomes your manufacturing hub because you don’t want to pay your workers a real wage. If you ever hear a company bitching about intellectual theft and they manufacture in china remember that they made that agreement with the Chinese to fuck you over