mrstickball said:
Its not so much the minimum wage as it is everything else. I've never seen a factory where I live that has ever remotely paid minimum wage. The problem is that, in America, the costs of manufacturing are generally outrageous in regards to permits and regulatory adherance, then of course, taxes on the corporation. There is usually a pretty notable distinction against hiring lots of full-time employees, as the larger a business grows, the more taxes and regulations are applied to it. For example, if you have over 20 full-time employees (which is almost always needed for a manufacturing company), you have to adhere to many more regulations and offer certain benefits...Making it very difficult to keep costs down. Comparatively, if such laws weren't there, you'd likely see the cost of manufacturing plummet in the US. From my understanding, some states have focused so intently on removing these regulations (such as the Carolinas), that the cost of business is *almost* as cheap as China, and because of that, jobs are pouring into the state. Heck, in Georgia, there is a woodworking factory that is selling chopsticks to the Chinese at a rate of almost 1 billion units a year. Simply because their productivity is so high, and regulations are so agreeable (finally). |
This actually reminds me of a case study I read in my economics class back in University ...
Essentially, back in the 1970s there was (almost) as much paranoia about Japanese manufacturing as there currently is about Chinese manufacturing. One of the key industries that was used as an example was automobile manufacturing, and there was a belief that low labour costs in Japan were the reason why Japanese cars were so much cheaper. Several studies were commissioned and they consistently came back demonstrating that the lower wages of Japanese workers were not the reason why goods were so much less expensive to manufacture in Japan; and the primary causes were expensive management, inefficient manufacturing processes, high levels of taxation, and regulatory burden in the United States.
From my understanding, in almost every way, these costs have gotten higher in the United States and are even lower in China than they were in Japan.
