What Would Happen If We Cut China, India Etc Out Of Our Production And Support Picture?
Posted by IT CommentatorAug 16
Would our jobs come back to us, would inflation go crazy bc of labor costs? I’m just curious what some views would be if we pulled all of our outsourcing back within our own borders.
The markets are very, very strong and dynamic. If we decided to cut China and India out of our production circle we would basically see new factories and jobs all over the US. However, let’s say that factory workers in the US make around $20/hour (I know this is low, but it’s just an example). Factory workers in China make less than $1 on average, but let’s say that the figure is $1/hour even. That means that prices for goods would increase in many cases as much as 20-fold. In truth, we in the US have a technological advantage and we would see reduced costs in shipping and storage facilities so this increase would be much lower, but the fact remains that prices would go up significantly.
It’s all about comparative advantage. China has a comparative advantage in manufacturing because of the fact that they don’t have labor unions and organized worker parties demanding higher wages like we do here in the US. As a Conservative and a believer in the Free Market I believe that there is a positive to be had in outsourcing and refocusing our economy to a service-based economy like it is now. However, and this is primarily the case with China, the Government should get involved in matters of security. China is a communist state that uses the massive trade deficit to fund their military and researching that will eventually make them stronger than the US economically and militarily. The goods they sell us are inferior, cheap, and (as we are discovering with toys and dog food) unsafe. India is a friend and a relatively free country, they aren’t using the proceeds of trade to build up an army to eventually challenge us.
The freer the market the freer the people, sure, but that doesn’t apply when our trade partner is a communist regime that doesn’t believe in the free market for any reason other than to exploit it to damage our economy.
Your cost would go up for products you purchase. China is the USA number 1 exporter, and I guarantee your house is full of made in China products. The number of US jobs lost from the cut would be greater then the jobs gained. Also production line manufacturing jobs are for 3rd world children to do.
You can’t force companies not to outsource jobs. One way or the other they’re going to resist and find a way. The problem is the infinite number of regulations and the high cost of the humongous government.
You have to think it this way, to produce one dollar you have to roll up your sleeve and create wealth that the market wants in services or products. You have a cost for doing that and if you don’t get as much (and a reasonable profit) you’re not going to do that again. The government creates no wealth at all (I’m willing to accept that there’s a minimal wealth but it doesn’t make much difference in this case) and have a cost too that has to be paid by the wealth created by others (increasing their cost).
The reason why jobs were outsourced is because the cost was more convenient somewhere else, less regulations, less government involved. Some of those paradises became so socialist that they started to loose jobs too, the governments grew encouraged by a source of wealth that was taxable. Eventually, the labor cost went too high to be convenient.
Sooner or later, the local cost is going to be cheaper than others and the jobs may come back. But the spiral of prices will keep going up and the balance of money distribution will keep falling to the government side. Less and less able workers will have to support more and more government leaches, politicians, bureaucrats and people living on welfare.
The real solution is to reduce the government. Eliminate regulations, get rid of welfare and all social programs, no universal health care, no social education.
If people keep being pampered like that, they’re not going to progress ever. Who would want a low pay job when he can get a paycheck for nothing? who would care for his health if he can get medicine for free? who would try to improve his skills if it’s more profitable not to work? who would open a job position where the workers are more expensive and less skilled?
A small government will get back all the jobs and create new ones.
Our economy and the worlds economy would completely collapse – they are too intertwined and have been for too long.
Wall Mart would have to close its doors!
We need trade with India,China and other nations…
However it needs to be fair trade not free trade!
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They are just a facet of our economy. Our economy most certainly NOT collapse. We have many others. For the most part you see a slowing in certain areas. The main thing may be employment. You see, the reason that companies outsource to these countries is cheap/cheaper labor. They won’t be rushing to employ Americans at the kind of salaries and benefits American workers demand. If they did, they would lose competitive edge.
We would likely be much less competitive in most every other place around the world. Our economy would collapse, affecting the entire world.
Did Bush just hit another homerun against Chinas trade agreements
Bush administration began imposing anti-subsidy duties on China.
China agrees to end a dozen subsidies that trouble trade relationshttp://www.iht.com/articles/2007/11/29/b…
actually we’re borrowing most of our money from China these days…
Not to mention they got us locked on their cheap imports…
A better question would be…what would happen if everyone stopped shopping at Walmart ?
Our economy would collapse, no one could afford to live here. Our nations pricing, labor, and wage structure is dependent on foreign goods and services. The question should be the other way around, if China decided to stop exporting to the US what would happen…