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Counterpoint: cost of living is ridiculously cheaper in China vs. USA. Workers can be paid 3x less and still have a better QoL. It's a vastly more efficient eco

Counterpoint: cost of living is ridiculously cheaper in China vs. USA. Workers can be paid 3x less and still have a better QoL. It's a vastly more efficient economy in terms of human capital. Counterpoint: China is the undisputed leader in renewable energy technology, including battery storage. I don't think they are doing it purely for environmental reasons, but they are doing it.

darth_avocado 1y ago
I agree. A lot of modern trade for the US is built around arbitrage on purchasing power. If all else costs the same, and you have to decide whether to pay someone $2 per hour to do it or $20, $2 always wins unless shipping it over is more expensive than the difference, which almost always isn’t.
- _DeadFred_ 1y ago
  Average salary in China has gone up quite a bit. It might be 1/3 but it's not $2. I had a friend move his factory to China because the packaging and other costs were so much cheaper. I wish I'd asked for a breakdown. He didn't factor in/expect wages to be much of a savings.
  - darth_avocado 1y ago
    I just pulled a random number but what I intended to say is that as long as differences in purchasing power exist and the dollar is the stronger currency, trade will move to where your dollar has more purchasing power for labor, as long as moving the finished goods back to the US isn’t prohibitively expensive.
int_19h 1y ago
But the main reason why that cost of living is ridiculously cheaper is because human labor is so much less expensive. There's no free lunch - if the output is that much cheaper, that difference has to come out of someone's pocket eventually, even if it's not the person directly manufacturing the thing but someone down the line from them. Or you can look from it from the opposite direction and imagine what would have happened if there was full freedom of movement between China and US (i.e. no visas etc) and thus an actual free market for labor. If you expect workers in such situation to steadily migrate from China to US but not vice versa (at least until cost of labor equalizes), this implies that the workers in China are somehow worse off in absolute quality of life even when accounting for relative cost-of-life differences. That is, if the relationship between two countries wasn't economically exploitative in some way, we wouldn't need to restrict the free flow of labor at the border.
- pphysch 1y ago
  > But the main reason why that cost of living is ridiculously cheaper is because human labor is so much less expensive. That's a really bizarre take that is obviously false. The disenfranchised migrant laborer or prison slave producing your American groceries is earning approximately as much as a Chinese peasant, i.e. basically nothing. There is however a vast difference in what the organization looks like above the laborer. In America: vast profits and consolidation. By contrast, China has more small businesses (think street food) and large enterprises are SOE or otherwise constrained by the political system.
  - int_19h 1y ago
    As far as I know, this is not the case for migrant laborers at least, who often get paid more than federal minimum wage (because otherwise they can't get enough people even if they are undocumented immigrants). In any case, if those were the main two reasons for the disparity, then we wouldn't see the same for other first world countries which have neither cheap migrant labor nor prison slaves. Yet cost of living is still significantly more expensive in, say, Finland than it is in China.
- HDThoreaun 1y ago
  America's cost of living issues are mostly because of bad regulation. The big three rising costs are housing, healthcare, and education, and all 3 have been horribly misregulated by the US gov leading to massive spikes in price.
  - int_19h 1y ago
    How about the rest of the First World then?
themaninthedark 1y ago
And why is cost of living ridiculously cheaper in China? If you pay less in wages, goods cost less. If you have less environmental regulations/ignore them, goods cost less. Yes, they are the leader in renewable energy tech. They have also cornered the market with regards to the rare minerals that are some/most of the inputs. The link is not a coincidence.
- abe_m 1y ago
  In the US, housing and real estate have been driven up significantly to the benefit of the really rich. Increased rent, and increased house cost for existing structures just ends up lining the pockets of people rich enough to get priority access to new, cheap debt issuance. Inflation benefits those who are closest to the new money creation, while screwing those furthest away. All the while, everything gets more expensive with increasing rents. I don't know if that is also the case in China.
  - chii 1y ago
    > I don't know if that is also the case in China. it is exactly the case in china - just with different numbers. It's why shanghai and beijing has some of the highest property price to income ratios. Just like in san fran. There's cheap property in the USA - rural areas and lower populated areas. Just like there are in china.

darth_avocado 1y ago

I agree. A lot of modern trade for the US is built around arbitrage on purchasing power. If all else costs the same, and you have to decide whether to pay someone $2 per hour to do it or $20, $2 always wins unless shipping it over is more expensive than the difference, which almost always isn’t.

_DeadFred_ 1y ago
Average salary in China has gone up quite a bit. It might be 1/3 but it's not $2. I had a friend move his factory to China because the packaging and other costs were so much cheaper. I wish I'd asked for a breakdown. He didn't factor in/expect wages to be much of a savings.
- darth_avocado 1y ago
  I just pulled a random number but what I intended to say is that as long as differences in purchasing power exist and the dollar is the stronger currency, trade will move to where your dollar has more purchasing power for labor, as long as moving the finished goods back to the US isn’t prohibitively expensive.

int_19h 1y ago

But the main reason why that cost of living is ridiculously cheaper is because human labor is so much less expensive. There's no free lunch - if the output is that much cheaper, that difference has to come out of someone's pocket eventually, even if it's not the person directly manufacturing the thing but someone down the line from them. Or you can look from it from the opposite direction and imagine what would have happened if there was full freedom of movement between China and US (i.e. no visas etc) and thus an actual free market for labor. If you expect workers in such situation to steadily migrate from China to US but not vice versa (at least until cost of labor equalizes), this implies that the workers in China are somehow worse off in absolute quality of life even when accounting for relative cost-of-life differences. That is, if the relationship between two countries wasn't economically exploitative in some way, we wouldn't need to restrict the free flow of labor at the border.

pphysch 1y ago
> But the main reason why that cost of living is ridiculously cheaper is because human labor is so much less expensive. That's a really bizarre take that is obviously false. The disenfranchised migrant laborer or prison slave producing your American groceries is earning approximately as much as a Chinese peasant, i.e. basically nothing. There is however a vast difference in what the organization looks like above the laborer. In America: vast profits and consolidation. By contrast, China has more small businesses (think street food) and large enterprises are SOE or otherwise constrained by the political system.
- int_19h 1y ago
  As far as I know, this is not the case for migrant laborers at least, who often get paid more than federal minimum wage (because otherwise they can't get enough people even if they are undocumented immigrants). In any case, if those were the main two reasons for the disparity, then we wouldn't see the same for other first world countries which have neither cheap migrant labor nor prison slaves. Yet cost of living is still significantly more expensive in, say, Finland than it is in China.
HDThoreaun 1y ago
America's cost of living issues are mostly because of bad regulation. The big three rising costs are housing, healthcare, and education, and all 3 have been horribly misregulated by the US gov leading to massive spikes in price.
- int_19h 1y ago
  How about the rest of the First World then?

themaninthedark 1y ago

And why is cost of living ridiculously cheaper in China? If you pay less in wages, goods cost less. If you have less environmental regulations/ignore them, goods cost less. Yes, they are the leader in renewable energy tech. They have also cornered the market with regards to the rare minerals that are some/most of the inputs. The link is not a coincidence.

abe_m 1y ago
In the US, housing and real estate have been driven up significantly to the benefit of the really rich. Increased rent, and increased house cost for existing structures just ends up lining the pockets of people rich enough to get priority access to new, cheap debt issuance. Inflation benefits those who are closest to the new money creation, while screwing those furthest away. All the while, everything gets more expensive with increasing rents. I don't know if that is also the case in China.
- chii 1y ago
  > I don't know if that is also the case in China. it is exactly the case in china - just with different numbers. It's why shanghai and beijing has some of the highest property price to income ratios. Just like in san fran. There's cheap property in the USA - rural areas and lower populated areas. Just like there are in china.