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They'd think it because otherwise the prices would be too high and it would be difficult to sell the goods. If iphones go to $3000, the market for iphones will

by adamc 1y ago

They'd think it because otherwise the prices would be too high and it would be difficult to sell the goods. If iphones go to $3000, the market for iphones will get much thinner.

ben_w 1y ago
That doesn't explain the ratio. If a highly efficient and automated China is employing (say) 1e6 people to supply US demand, it's implausible that anyone (including the US) would be able to spot a way to fire 90% of the factory workers when rebuilding the production line at same capacity anywhere else (including the US). Of course, I simplify. But despite the wage difference, China's no longer the place you go to substitute expensive machines for cheap humans. The wage difference between the USA and China also means that for any given product, there's a minimum tariff below which it still makes more sense to import and pay the tariff rather than to pay local workers. To paint a very broad brushstroke, if I naïvely compare GDP/capita, that's about 558% — from https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... I get US 90,105 and China 13,688; then 90,105/13,688 = 6.58…, less 1 because tariff of 0% means the importer pays 100% of the money to the exporter.
ericmay 1y ago
To be clear I was suggesting that the number of jobs gained in the USA would not be 1-1 with the number of jobs currently in a given hypothetical factory. I.e. the Chinese factory loses 100 jobs, a corresponding American factory is unlikely in my view to gain 100 jobs, and instead the number may be much lower. I guess it's possible if China is that good at efficient manufacturing that the number of jobs in the United States would increase relative to the job loss of the same factory in China, but I wouldn't view that as a bad thing. Higher employment and more wage pressure for regular workers, and companies will have to invest in better technology and processes to alleviate that wage pressure.

by adamc 1y ago

They'd think it because otherwise the prices would be too high and it would be difficult to sell the goods. If iphones go to $3000, the market for iphones will get much thinner.

ben_w 1y ago

That doesn't explain the ratio. If a highly efficient and automated China is employing (say) 1e6 people to supply US demand, it's implausible that anyone (including the US) would be able to spot a way to fire 90% of the factory workers when rebuilding the production line at same capacity anywhere else (including the US). Of course, I simplify. But despite the wage difference, China's no longer the place you go to substitute expensive machines for cheap humans. The wage difference between the USA and China also means that for any given product, there's a minimum tariff below which it still makes more sense to import and pay the tariff rather than to pay local workers. To paint a very broad brushstroke, if I naïvely compare GDP/capita, that's about 558% — from https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... I get US 90,105 and China 13,688; then 90,105/13,688 = 6.58…, less 1 because tariff of 0% means the importer pays 100% of the money to the exporter.

ericmay 1y ago

To be clear I was suggesting that the number of jobs gained in the USA would not be 1-1 with the number of jobs currently in a given hypothetical factory. I.e. the Chinese factory loses 100 jobs, a corresponding American factory is unlikely in my view to gain 100 jobs, and instead the number may be much lower. I guess it's possible if China is that good at efficient manufacturing that the number of jobs in the United States would increase relative to the job loss of the same factory in China, but I wouldn't view that as a bad thing. Higher employment and more wage pressure for regular workers, and companies will have to invest in better technology and processes to alleviate that wage pressure.