4 ms·

Hmmm... What an interesting paradox. What made manufacturing jobs go to China in the first place was the extremely low wages and lack of red tape, worker benef

Hmmm... What an interesting paradox. What made manufacturing jobs go to China in the first place was the extremely low wages and lack of red tape, worker benefits, safety, bureaucracy, etc... In the past months wages in China have risen enough to make some US companies return jobs to the US because they were no longer saving money in China. This was predicted to happen at some time around 2015 but we're seeing much earlier. The better the Chinese get paid the less of a reason companies will have for outsourcing in the first place. Why? Because by insourcing manufacturing back to the US businesses have more control, don't have to worry about IP theft, and don't have to wait a month for shipments to come back from China. Basically: Chinese are treated like crap = backlash from consumers + bad for workers + but more jobs for the Chinese. Chinese workers treated better = more approval for consumers + better for Chinese workers + but less jobs for China.

Joakal 15y ago
It's not much of a paradox but something that capitalists said that globalisation allows a huge demand for workers in developing countries until the workers can demand developed world wages.
latch 15y ago
Two problems with this. First, rising wages in China isn't going to bring jobs back to the US. It'll bring jobs to India. Second, from the perspective of as casual observer, it would seem Apple's success disproves all three of your concern..they seem to have ample control, IP theft doesn't seem to be a problem (Samsung "stealing" design elements, isn't a manufacturing issue), and their time to market is phenomenal.
- learc83 15y ago
  >It'll bring jobs to India. Unless automation catches up first. You're right that jobs will keep jumping from country to county as wages rise in previously developing areas. However, that will end when automation reaches the point where it's cheaper to have robots in the US build it. Also, one question I have is this: is the difference in wages between the U.S. and India, less than the difference in wages between the U.S. and China when these jobs started moving there?
- eaurouge 15y ago
  The fact that the iPhone hasn't been cloned in China doesn't mean intellectual theft doesn't occur. Given so much lower hanging fruit to clone, why bother cloning iPhone? And why exactly would manufacturing jobs go to India? Is there some preexisting manufacturing industry I'm not aware of?
  - nknight 15y ago
    I don't know how the economics work out at the moment, but India does have a couple benefits. A lot more people speak English well (like ten times as many), and it's culturally more accessible to the west. They were under British rule until after World War II, and have in general a long history of closer ties to the western world. It's also less politically sensitive in the US. Americans have a knee-jerk reaction to China that goes far beyond outsourcing and call center complaints. India is seen as an ally rather than a potential military threat.
    - pdelgallego 15y ago
      India have even more good reasons: - India's domestic consumption accounts for 57% of the GPD. - India's housing bubble is not even close to what has been going on in China. - 650 million Indian's are estimated to live on $2 a day (100 millions in china). - India's population will overtake china's during the 2020's OTHO, India has other problems like endemic corruption, less investment in infrastructure, or terrible levels of inflation for example.
      - nknight 15y ago
        From what I've seen, I'm not sure corruption is much less of a problem in China, I think it just manifests differently. Arguably an openly-corrupt society has advantages over a quietly-corrupt one.
  - latch 15y ago
    Nope, not pre-existing, but emerging. There are a number of reports on the topic, Wiki references one by PwC (1). There's also the fact that China appears to be heading for a serious problem with respect to the age of its population. Conversely, India is expected to maintain population growth for at least a couple decades longer than China. (1) http://www.pwc.com/en_GX/gx/world-2050/pdf/world-in-2050-jan-2011.pdf http://www.pwc.com/en_GX/gx/world-2050/pdf/world-in-2050-jan...
moonchrome 15y ago
>Chinese workers treated better = more approval for consumers + better for Chinese workers + but less jobs for China. Bigger domestic consumer base so it's no longer export only, lower cost from IP means fewer legal risks/more competition and cheaper manufacturing capacity.
- learc83 15y ago
  >Bigger domestic consumer base so it's no longer export only Hopefully they have smoother transition than Japan.
nknight 15y ago
There's a long way to go before there's anything approaching parity with the US. $400/month is still less than $5000/year. Federal minimum wage in the US for 40 hours/week with no overtime comes out to just over $15,000/year, and it's unlikely most of the workers in a hypothetical US iPhone factory would be making minimum wage. Remember, the Foxconn workers are already making a lot more than most Chinese manage. These workers are getting attention because of Apple's unusual public image and high profile. There's a lot worse to be found in China.
- davorb 15y ago
  Doesn't quite work that way since US workers get payed in dollars and Chinese workers get paid in yuan. Once the Chinese government stops artificially keeping it's currency low, it should even out.
  - Volpe 15y ago
    Once they do something they've explicitly said they have no intention of doing any time soon...
- danmaz74 15y ago
  These workers are getting attention because of Apple's unusual public image and high profile and unusually high margins and profits...
- InclinedPlane 15y ago
  Cost of living is not the same in China and the US though. In terms of purchasing power $5k/year is more like $25k/year. Not exactly posh, but not the extreme poverty a naive calculation would lead you to believe.
  - nknight 15y ago
    Oh I get that. I'm usually the guy who points that out. I'm just saying the economics don't really support moving manufacturing jobs back to the US at this point, and probably won't soon.
zura 15y ago
The gap is still big, so there is a room for improvement of Chinese workers conditions.
jawngee 15y ago
It's called the race to the bottom. It's happening in Taiwan now too. Everyone is moving their factories to Vietnam, some to Cambodia, some to Thailand. I live in Vietnam (Saigon) and hang out with a lot of Taiwanese factory owners/managers/etc. More and more of them are coming here, though I can't imagine they'll be staying long. I went to Taiwan for Chinese New Years and was amazed at the progress from when I was last there 12 years ago. Unfortunately, their economy is taking a beating as a lot of what created it in the first place is now moving to places with higher profit margins. I can only think that Africa is next on the list.

Joakal 15y ago

It's not much of a paradox but something that capitalists said that globalisation allows a huge demand for workers in developing countries until the workers can demand developed world wages.

latch 15y ago

Two problems with this. First, rising wages in China isn't going to bring jobs back to the US. It'll bring jobs to India. Second, from the perspective of as casual observer, it would seem Apple's success disproves all three of your concern..they seem to have ample control, IP theft doesn't seem to be a problem (Samsung "stealing" design elements, isn't a manufacturing issue), and their time to market is phenomenal.

learc83 15y ago
>It'll bring jobs to India. Unless automation catches up first. You're right that jobs will keep jumping from country to county as wages rise in previously developing areas. However, that will end when automation reaches the point where it's cheaper to have robots in the US build it. Also, one question I have is this: is the difference in wages between the U.S. and India, less than the difference in wages between the U.S. and China when these jobs started moving there?
eaurouge 15y ago
The fact that the iPhone hasn't been cloned in China doesn't mean intellectual theft doesn't occur. Given so much lower hanging fruit to clone, why bother cloning iPhone? And why exactly would manufacturing jobs go to India? Is there some preexisting manufacturing industry I'm not aware of?
- nknight 15y ago
  I don't know how the economics work out at the moment, but India does have a couple benefits. A lot more people speak English well (like ten times as many), and it's culturally more accessible to the west. They were under British rule until after World War II, and have in general a long history of closer ties to the western world. It's also less politically sensitive in the US. Americans have a knee-jerk reaction to China that goes far beyond outsourcing and call center complaints. India is seen as an ally rather than a potential military threat.
  - pdelgallego 15y ago
    India have even more good reasons: - India's domestic consumption accounts for 57% of the GPD. - India's housing bubble is not even close to what has been going on in China. - 650 million Indian's are estimated to live on $2 a day (100 millions in china). - India's population will overtake china's during the 2020's OTHO, India has other problems like endemic corruption, less investment in infrastructure, or terrible levels of inflation for example.
    - nknight 15y ago
      From what I've seen, I'm not sure corruption is much less of a problem in China, I think it just manifests differently. Arguably an openly-corrupt society has advantages over a quietly-corrupt one.
- latch 15y ago
  Nope, not pre-existing, but emerging. There are a number of reports on the topic, Wiki references one by PwC (1). There's also the fact that China appears to be heading for a serious problem with respect to the age of its population. Conversely, India is expected to maintain population growth for at least a couple decades longer than China. (1) http://www.pwc.com/en_GX/gx/world-2050/pdf/world-in-2050-jan-2011.pdf http://www.pwc.com/en_GX/gx/world-2050/pdf/world-in-2050-jan...

moonchrome 15y ago

>Chinese workers treated better = more approval for consumers + better for Chinese workers + but less jobs for China. Bigger domestic consumer base so it's no longer export only, lower cost from IP means fewer legal risks/more competition and cheaper manufacturing capacity.

learc83 15y ago
>Bigger domestic consumer base so it's no longer export only Hopefully they have smoother transition than Japan.

nknight 15y ago

There's a long way to go before there's anything approaching parity with the US. $400/month is still less than $5000/year. Federal minimum wage in the US for 40 hours/week with no overtime comes out to just over $15,000/year, and it's unlikely most of the workers in a hypothetical US iPhone factory would be making minimum wage. Remember, the Foxconn workers are already making a lot more than most Chinese manage. These workers are getting attention because of Apple's unusual public image and high profile. There's a lot worse to be found in China.

davorb 15y ago
Doesn't quite work that way since US workers get payed in dollars and Chinese workers get paid in yuan. Once the Chinese government stops artificially keeping it's currency low, it should even out.
- Volpe 15y ago
  Once they do something they've explicitly said they have no intention of doing any time soon...
danmaz74 15y ago
These workers are getting attention because of Apple's unusual public image and high profile and unusually high margins and profits...
InclinedPlane 15y ago
Cost of living is not the same in China and the US though. In terms of purchasing power $5k/year is more like $25k/year. Not exactly posh, but not the extreme poverty a naive calculation would lead you to believe.
- nknight 15y ago
  Oh I get that. I'm usually the guy who points that out. I'm just saying the economics don't really support moving manufacturing jobs back to the US at this point, and probably won't soon.

zura 15y ago

The gap is still big, so there is a room for improvement of Chinese workers conditions.

jawngee 15y ago

It's called the race to the bottom. It's happening in Taiwan now too. Everyone is moving their factories to Vietnam, some to Cambodia, some to Thailand. I live in Vietnam (Saigon) and hang out with a lot of Taiwanese factory owners/managers/etc. More and more of them are coming here, though I can't imagine they'll be staying long. I went to Taiwan for Chinese New Years and was amazed at the progress from when I was last there 12 years ago. Unfortunately, their economy is taking a beating as a lot of what created it in the first place is now moving to places with higher profit margins. I can only think that Africa is next on the list.