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> We have prioritized high wages for workers in the US I'm not sure if this is the dominating factor. Russia fired around 10,000 shells a day, and each costs a

> We have prioritized high wages for workers in the US I'm not sure if this is the dominating factor. Russia fired around 10,000 shells a day, and each costs about $1000. So for a year, Russia would have fired 3.65M shells that cost $3.6B. Let's say we need 100 workers to produce these shells. Then, he wage of the workers would cost merely $10M a year, if each one earns $100K a year. $10M over 3.65M shells, and that's just $3 a shell, or 0.3% of the cost of a Russian shell, or 0.075% of the cost of a US shell. What the US lost was not advantage of labor cost, but the economy of scale. By the way, this is also what Tim Cook said. He said that Chinese labor not cheap anymore, but China has so much scale and expertise so that the output from China is still cheap. Again, economy of scale.

wakawaka28 2y ago
Are you kidding? Everything is outsourced because wages are high in the US. I can't believe I have to spell out such basic and obvious economic facts to presumably intelligent people. >What the US lost was not advantage of labor cost, but the economy of scale. We've lost a lot of things but the reason things are expensive here is NOT that we didn't have economies of scale. That issue came much later. You get to have scale in the first place by being economically competitive. When things are outsourced due to some other country using slave labor or else their workers surviving on a tenth of what you make in the US, that is when you lose economies of scale. Literally the only way we could compete in an open market with countries that have cheap labor is to use automation. But even with automation, those machines can be set up anywhere in the world, and they will tend to go wherever it is cheapest to run them.
- hintymad 2y ago
  I believe initially yes, wage is a big factor. It's just that now the wage gives way to the economy of scale (maybe regulation plays a big role too). It's pretty sad too. The capital wants returns and growth, at the cost of weakening a country for generations to come.
- bruce511 2y ago
  >> When things are outsourced due to some other country using slave labor or else their workers surviving on a tenth of what you make in the US, that is when you lose economies of scale. There may be "Slave Labor" in some places, but the vast majority of people doing out-sourcing for US companies are very well paid (by local standards.) They are not "surviving" they are thriving. living in the US is expensive. So prices go up to match. So wages go up. So materials go up. "National security" is expensive (and the US is obsessed by it.) 13% of the budget goes to the military. Protectionist tarrifs. Security theater like the TSA. All of this comes at a price. The US has enjoyed a leadership role in world affairs, economic strength, influence etc for 75+ years. But it turns out that "expensive is the head that wears the crown". I say this not as a criticism, merely as a statement of reality. Of course, whether it changes, or indeed even discussing if it should change is debatable.
- bluGill 2y ago
  If you check the real numbers, not everything is outsourced. There is still very significant manufacturing in the US - and the number is increasing. China is perhaps increasing faster, but that doesn't mean the US isn't doing well.

wakawaka28 2y ago

Are you kidding? Everything is outsourced because wages are high in the US. I can't believe I have to spell out such basic and obvious economic facts to presumably intelligent people. >What the US lost was not advantage of labor cost, but the economy of scale. We've lost a lot of things but the reason things are expensive here is NOT that we didn't have economies of scale. That issue came much later. You get to have scale in the first place by being economically competitive. When things are outsourced due to some other country using slave labor or else their workers surviving on a tenth of what you make in the US, that is when you lose economies of scale. Literally the only way we could compete in an open market with countries that have cheap labor is to use automation. But even with automation, those machines can be set up anywhere in the world, and they will tend to go wherever it is cheapest to run them.

hintymad 2y ago
I believe initially yes, wage is a big factor. It's just that now the wage gives way to the economy of scale (maybe regulation plays a big role too). It's pretty sad too. The capital wants returns and growth, at the cost of weakening a country for generations to come.
bruce511 2y ago
>> When things are outsourced due to some other country using slave labor or else their workers surviving on a tenth of what you make in the US, that is when you lose economies of scale. There may be "Slave Labor" in some places, but the vast majority of people doing out-sourcing for US companies are very well paid (by local standards.) They are not "surviving" they are thriving. living in the US is expensive. So prices go up to match. So wages go up. So materials go up. "National security" is expensive (and the US is obsessed by it.) 13% of the budget goes to the military. Protectionist tarrifs. Security theater like the TSA. All of this comes at a price. The US has enjoyed a leadership role in world affairs, economic strength, influence etc for 75+ years. But it turns out that "expensive is the head that wears the crown". I say this not as a criticism, merely as a statement of reality. Of course, whether it changes, or indeed even discussing if it should change is debatable.
bluGill 2y ago
If you check the real numbers, not everything is outsourced. There is still very significant manufacturing in the US - and the number is increasing. China is perhaps increasing faster, but that doesn't mean the US isn't doing well.