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No. That sentence should have read "There is no way I am paying someone $15/hr to put screws into holes". The problem this forced wage has created is that you

No. That sentence should have read "There is no way I am paying someone $15/hr to put screws into holes". The problem this forced wage has created is that you can't hire people without some pretty solid justification for what they will deliver in exchange. Businesses are forced to make an ROI choice on everything, including people and their wages. This is why you are seeing things like burger flipping and fries making robots. You just can't pay people that much and stay in business. There will be plenty of high paid jobs. Just not jobs that cannot justify an artificially forced minimum wage that is not sustainable in the context of a global economy. I'll give you a simple and real example from a recent job we sent out to bid to nearly two dozen manufacturers in the US and China. It consists of a part made by a wire forming machine and with some manual labor. The average US-cost for that part was in the order of $6.00 per unit PLUS shipping. The average cost of the same part made in China INCLUDING shipping, was $1.00. Now, somebody tell me how we can make that part in the US when minimum wage, taxes, regulatory costs, etc. make it impossible to get anywhere even close to Chinese prices. I mean, you can't make the part in the US for even TWICE the Chinese price. And, keep in mind that shipping from China costs 10x more today that it did not too long ago. People might not like what I have to say. That does not invalidate the truth of it, you can't invalidate reality with a down-vote. Like it or not. Most people replying to my comment have never even tried to manufacture something at a non-trivial scale in the US. In other words, they don't even know what they are talking about, yet they are quick to have an opinion because words like mine hurt their feelings. Well, economics cares not one bit about feelings. Again, like it or not.

hotpotamus 5y ago
So if your product can be made entirely in China by cheap workers and shipped here, why would I order from you? What value do you add? I can already order directly on Aliexpress and even talk to Chinese customer service agents in English - and they've been delightful to work with by the way.
- robomartin 5y ago
  You can do that with some products, not all. In some cases all we have left are things like local support and software development. This is particularly true in industrial segments --which is where we are. In the consumer sector things are increasingly in the picture you painted. You can do this on Amazon for just about anything. Once the Chinese figured out how to sell directly through portals such as Amazon, that gig was up. Design, domain expertise and more in-context areas is were the west still leads on many ways. It's product dependent, of course. That's why Apple designs here and manufactures in China. In our case, it is a combination of our embedded and workstation software that creates a reasonably solid barrier to entry. This, along with some of the protection offered by patents and trademarks (which can be near zero in some cases). To be sure, this is a very complex and difficult landscape that has evolved over about 50 years. I you go back that far, China was mostly an agrarian economy. There's a solid argument that says that this is something that has been mismanaged for five decades. You don't get where we are now overnight. That is not to say I hate China or the Chinese. They are doing what they have to do in order to further their economy and more. We might not agree with some of their government's darker policy positions. Not much we can do about that. On the subject of being laser-focused on economic growth through rabid entrepreneurial drive, China is probably without equal. That, as an entrepreneur, I have to admire. Most people would be floored by what they would learn from just one trip to Shenzhen. The "I can just buy it on Aliexpress" argument is fine and very real. The problem with accepting this without looking inward at the decisions and policies that do not allow us to compete is that things will get worse here and better there. It is inevitable. I'll give you a simple example: There's a international postal treaty dating back to the 1700's (or was it 1800's, I don't remember) that gives China the ability to ship products into the US for nothing or nearly nothing. We, the US, subsidize these shipments 100%. I cannot ship from Los Angeles to New York for free. I have to pay. A Chinese competitor can offer free shipping all the way from China. I either have to charge a significant amount for shipping or take a margin hit (which means growth, job creation and the ability to survive events such as pandemics are compromises). We are not making intelligent decisions.
  - hotpotamus 5y ago
    > The "I can just buy it on Aliexpress" argument is fine and very real. The problem with accepting this without looking inward at the decisions and policies that do not allow us to compete is that things will get worse here and better there. It is inevitable. Is it not the exact analog to "I can just outsource my production to China"? What differentiates a Chinese worker from a US worker? And if they are the same in your eyes, then why shouldn't things get worse here and better there until they reach some equilibrium?

hotpotamus 5y ago

So if your product can be made entirely in China by cheap workers and shipped here, why would I order from you? What value do you add? I can already order directly on Aliexpress and even talk to Chinese customer service agents in English - and they've been delightful to work with by the way.

robomartin 5y ago
You can do that with some products, not all. In some cases all we have left are things like local support and software development. This is particularly true in industrial segments --which is where we are. In the consumer sector things are increasingly in the picture you painted. You can do this on Amazon for just about anything. Once the Chinese figured out how to sell directly through portals such as Amazon, that gig was up. Design, domain expertise and more in-context areas is were the west still leads on many ways. It's product dependent, of course. That's why Apple designs here and manufactures in China. In our case, it is a combination of our embedded and workstation software that creates a reasonably solid barrier to entry. This, along with some of the protection offered by patents and trademarks (which can be near zero in some cases). To be sure, this is a very complex and difficult landscape that has evolved over about 50 years. I you go back that far, China was mostly an agrarian economy. There's a solid argument that says that this is something that has been mismanaged for five decades. You don't get where we are now overnight. That is not to say I hate China or the Chinese. They are doing what they have to do in order to further their economy and more. We might not agree with some of their government's darker policy positions. Not much we can do about that. On the subject of being laser-focused on economic growth through rabid entrepreneurial drive, China is probably without equal. That, as an entrepreneur, I have to admire. Most people would be floored by what they would learn from just one trip to Shenzhen. The "I can just buy it on Aliexpress" argument is fine and very real. The problem with accepting this without looking inward at the decisions and policies that do not allow us to compete is that things will get worse here and better there. It is inevitable. I'll give you a simple example: There's a international postal treaty dating back to the 1700's (or was it 1800's, I don't remember) that gives China the ability to ship products into the US for nothing or nearly nothing. We, the US, subsidize these shipments 100%. I cannot ship from Los Angeles to New York for free. I have to pay. A Chinese competitor can offer free shipping all the way from China. I either have to charge a significant amount for shipping or take a margin hit (which means growth, job creation and the ability to survive events such as pandemics are compromises). We are not making intelligent decisions.
- hotpotamus 5y ago
  > The "I can just buy it on Aliexpress" argument is fine and very real. The problem with accepting this without looking inward at the decisions and policies that do not allow us to compete is that things will get worse here and better there. It is inevitable. Is it not the exact analog to "I can just outsource my production to China"? What differentiates a Chinese worker from a US worker? And if they are the same in your eyes, then why shouldn't things get worse here and better there until they reach some equilibrium?