US Manufacturing job loss a plus for the consumer?

[ramapo]

I've heard the following rationale given a few times to explain why the loss of U.S. manufacturing jobs to foreign competition actually translates to a net win, especially for the lower income segment...

Simply stated, products can be manufactured far less expensively outside the U.S.. This translates to a more competitive product, forcing down prices for U.S. consumers. So maybe XYZ company sold 500,000 DVD players at $150 each when manufactured in the U.S. (I know there has probably never been a DVD player made here in reality). That's $75,000,000 out of the pocket of U.S consumers. Now it's manufactured in China and it only costs $40. Now 500,000 Americans can buy a DVD player and they'll only be out $20,000,000. They have $55,000,000 left over to buy food or drugs, pay the rent, buy a car, save for college. The only problem is that a nice chunk of that $20,000,000 is leaving the country.

Perhaps you find a service job to replace the manufacturing position that you lost. But you only make $8/hr instead of $24/hr. That's still ok because the competition from offshore has done so much to lower the cost of goods that you're just about even (except for your rent, gas, medical, etc.). Your fellow citizens who didn't lose their jobs are in much better shape because they've saved so much money.

Well this certainly doesn't sit well with me. Seems like the old cutting off your nose to spite your face conundrum. But I guess we have benefited, at least on one hand, from lower prices of many consumer goods, especially electronics, manufactured outside the U.S.

My simple answer is that we reward ourselves keeping jobs in the U.S. since, while costs may be higher, the money stays in the country and gets recycled. We build our country rather than China.

Any other counter arguments to the consumer saving billions through competition brought about by foreign manufacturing?

[mike6640]

1. I've got a nice bridge for sale, cheap!

I would be willing to put down hard cash, in a safe bet, that those savings will NOT be passed along to the consumer. They need those numbers to support their productivity growth claims in future quarters.

[cosmicaug]

2. Nonsense!

I would be willing to put down hard cash, in a safe bet, that those savings will NOT be passed along to the consumer.

Nonsense, the savings are clearly passed on to the consumers, at the very least, sometimes. See everybody's favorite evil megacorporation, Wal-Mart (and their effect on pricing by others).

[cprise]

4. Nope

You're assuming that everything is of equal importance/priority to most citizens (I'll forgo "consumer" and other maggot-inspired imagery).

Real wages (the ability to buy major necessities like housing) have gone down as jobs are off-shored and Americans are weaned off quality education. In the place of security and skills we are offered distraction and indebtedness. Sadly, Americans have been taking the bait.

[cosmicaug]

5. Yup.

You're assuming that everything is of equal importance/priority to most citizens (I'll forgo "consumer" and other maggot-inspired imagery).

Real wages (the ability to buy major necessities like housing) have gone down as jobs are off-shored and Americans are weaned off quality education. In the place of security and skills we are offered distraction and indebtedness. Sadly, Americans have been taking the bait.

I'm assumning nothing. I'm just saying that making stuff in China (Wal-Mart) does produce lower prices (I'm saying no more and no less). I made no value judgement on whether that is, as a whole, a good thing or not. Certainly some of it must be bad if it is true that loss of manufacturing jobs has anything to do with falling wages (as I would assume to be the case). Of course, back in 1999 none of this seemed to matter because it was said that we were dealing with a "New Economy" where the old rules no longer apply.

On edit: Fixed typo.

[cprise]

9. I think if someone labels a post "nonsense"

...then discarding the economic effect off-shoring has "as a whole" is hardly the kind of myopia one is going to get away with.

"Assumning nothing," as you say, shows an unwillingness to address the imperatives in the lives of average Americans. In fact, you made an explicit value judgement w/respect to savings on Walmart serf-booty; you just don't want us to bring other stuff (like homes) into it.

I wonder how many homeless have tried to plug their Chinese toaster into a sewer grate.

[cosmicaug]

11. I labeled a specific post nonsense.

I think if someone labels a post "nonsense" ...then discarding the economic effect off-shoring has "as a whole" is hardly the kind of myopia one is going to get away with.

I labeled a specific post nonsense. In fact I labeled a specific sentence in a specific post nonsense (that's why I insist on using the 'BLOCKQUOTE' tag as in this format it is not always clear what one is responding to). That would be the part were mike6640 seemed to be suggesting that making stuff were people are payed a couple of bucks a day doesn't present a savings to the end consumer in this country.

As to the rest, guess what? My message that you're responding to is agreeing with you.

[Nay]

3. Sure, electronics are cheaper. But they're not necessary.

The drastically lower wages brought about by shipping decent jobs overseas may allow us to buy a CD player cheaper, but the prices of the things we need (like shelter, medical care, car insurance, college tuition, etc.) stay high. We can always decide to forego a TV or a computer, but we endanger ourselves if we do without the necessaries.

Also, ask yourself whether you spend less, more or the same amount now on, say, SHOES, as a category. Even if the price of shoes is much lower now as a percentage of your family's income than the price was in your childhood, I bet you have many more pairs now. So, as a kid if you had 4 pairs of shoes at $20 each (relative price), I bet you have at least 8 pairs of $10 shoes today. In fact, I bet you have even more pairs than that for fashion reasons. This means that your total outlay (as a percentage of average salary) for the category of SHOES today is more than you would have spent 20 years ago, for the simple reason that you buy many more pairs than you would 20 years ago. This is not progress, even though it seems like it. It is only progress for YOU if you resist the impulse to overbuy and save the money.

[terryg11]

6. this is a serious union busting issue

when they can start threatening to shut down plants and send jobs elsewhere instead of paying more or giving better benefits it really hurts the US worker.

I agree with everyone else here too, no way in hell do those savings get passed on to the consumer with the exception of inferior products showing up on shelves for a lot less than quality products. You get what you pay for, sometimes

[kalian]

7. Exactly!

and this will be their next step...they will be going after the
unions in order to take away the worker's last line of defense.

Do you actually believe that the IT sector would have been
decimated as it has been during the past 4 years if it would have
been unionized? Heck no!
Imagine the impasse that they would have created against first
importing Hindu workers to take away American jobs and then secondly,
exporting those same jobs overseas.

[ramapo]

8. IT a haven for union haters

I hate to generalize but will anyway. My experience found two types of ITers. Most were conservative/male/republican/certainly anti-union, the minority the creative, liberal democratic type who would've been open to unions. In some respects there's a bit of just desserts in the field (I've spent 20+ years in it)

[kalian]

10. Agreed....

I worked in the CORPORATE IT sector and that is exactly what I
found.
The irony of it all though: these same people are now groveling for
a job. Maybe they might start thinking about their ideology.

[cosmicaug]

12. That particular meme has a lot of penetrance.

The irony of it all though: these same people are now groveling for a job. Maybe they might start thinking about their ideology.

I'm afraid that's unlikely. The particular meme of union = evil seems to have a lot of penetrance at the moment. I'm amazed at how virulently anti-union people can be sometimes who'd benefit from union membership the most.

[kalian]

13. Ahhh...yes....

but they're still groveling for a job. :D

[cap]

14. cheap goods hasten the cycle of planned obsolescence...

haven't you started figuring out that you are spending more on a given item OVER THE LIFECYCLE of that item? You NEED to buy 10 pairs of $8 shoes instead of 2 pairs of $25 shoes. Thes shoes don't last as long!

I know this from buying kitchenware. I am starting to look at buying professional grade stuff from restaurant supply stores. I am tired of paint peeling off my bake pans, plastic measuring spoons and cups that deform, etc.

When will people realize that QUALITY MATTERS!

This off-shoring is another way to be in debt to the company store. I am slowly but surely weaning myself out of buying at department stores and Big Box stores. I pity people in rural areas who don't have this option. I know you want to touch and feel goods that you buy and not resort to the Internet or catalogs.