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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 someo
by 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 agoAverage 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 agoI 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.