Tariffs on China how long will the pain last?

originally posted by: Jay-morris

originally posted by: OccamsRazor04
a reply to: Jay-morris

They would need to adapt, and move manufacturing out of China.

And how do they adapt? Prices would sky rocket if you want American workers not to be on a slave wage.

Not going to happen!

Nah, the economy would just shift back to a manufacturing base and away from the producing nothing tangible service base crap it has devolved into. Your take on this is defeatist and ridiculous.

originally posted by: burdman30ott6

originally posted by: Jay-morris

originally posted by: OccamsRazor04
a reply to: Jay-morris

They would need to adapt, and move manufacturing out of China.

And how do they adapt? Prices would sky rocket if you want American workers not to be on a slave wage.

Not going to happen!

Nah, the economy would just shift back to a manufacturing base and away from the producing nothing tangible service base crap it has devolved into. Your take on this is defeatist and ridiculous.

Thank you for not explaining how it would work! You do not seem to understand how this works! American workers are not going to do the same work for the sort of money these people are making. So, if the wages go up, then the product prices will sky rocket, if they do not put up the prices, businesses will fail. It's not rocket science!

So please explain how it would work?

originally posted by: OccamsRazor04
a reply to: JAGStorm

I refuse to buy cheap junk and in the end it costs me less I think.

I am the same way, but I notice even the not so cheap stuff dosen't last very long anymore either. I like dollar tree, but mainly for cheap cleaning supplies.(There are some cleaning supplies I will pay price for, mainly Lysol bathroom cleaners, and Laundry stuff... but sponges and basic all purpose cleaners can be cheap dollar tree stuff.)

I refuse to buy clothes at walmart anymore ever since they changed suppliers. I bought some clothes from there new supplier and the material felt cheaper, and the stiching on a shirt was coming apart and a pair of pants got a hole in them and I didn't even have them for two months and only worn a couple of times. A lot of stores around me are closing so I have been buying online from WomanWithin lately and the clothes last and feel more durable. Only reason why I am buying clothes lately is because the clothes I have been wearing for years are finally giving out.(I don't like shopping much, specially for clothes, so the clothes I am talking about are from like 2000 and 2005, with a nice pair of black pants and nice shirt I got two years ago for a funeral.)

originally posted by: Jay-morris
Thank you for not explaining how it would work! You do not seem to understand how this works! American workers are not going to do the same work for the sort of money these people are making. So, if the wages go up, then the product prices will sky rocket, if they do not put up the prices, businesses will fail. It's not rocket science!

So please explain how it would work?

Profits are made in 2 ways... mark up and sales volume. When the American manufacturing base build up again, the disposable income of many Americans will increase. This will be because it will be more profitable for many workers to take $20 an hour jobs in manufacturing plants than continue their $7.50 an hour job flipping burgers or bussing tables. Those jobs will return to the segment of the populationd they were originally supporting: younger workers on a part time basis. As the middle class strengthens, companies will see their sales increase well above the current levels.

Wages are NOT the driving factor behind cheap imported goods anymore. China's average wages have nearly doubled in the past decade, logistics are the real sticking point and, as with all things of a learning curve nature, logistics are easily adapted and changed.

www.technologyreview.com...

Assembling those components into an iPhone costs about $4 in IHS’s estimate and about $10 in the estimation of Jason Dedrick, a professor at the School of Information Studies at Syracuse University. Dedrick thinks that doing such work in the U.S. would add $30 to $40 to the cost. That’s partly because labor costs are higher in the U.S., but mostly it’s because additional transportation and logistics expenses would arise from shipping parts, and not just the finished product, to the U.S. This means that assuming all other costs stayed the same, the final price of an iPhone 6s Plus might rise by about 5 percent.

A 5% increase in sticker price in exchange for several million new jobs at 2-3X the wages and since discretionary income is based off subtracting a series of set values (average rent, utilities, food costs) from your pay check, 2-3 times your current wages equates to considerably more than 2-3 times your current discretionary income. (Math example... if Joe makes $10 an hour at a full time job, his annual take home is $20,800. Let's assume he's left with $1200 of discretionary income after all his bills are paid. Now Joe takes a job at USA Made Tech for $20 an hour, or $41,600 a year a doubling of his base salary. If the cost of everything increases by the 5% cited in the linked article, then his cost of living can be assumed to rise from $19,600 to $20,580 leaving Joe with $21,020 of discretionary income now... that's 17.5-times his previous discretionary income level! Suddenly, Joe can afford his own iPhone.)

Someone here definitely doesn't understand economics, and it seems to be you.

a reply to: burdman30ott6

Here this may help you make your case. Paying workers more leads to increased sales as these workers spend money. Ford showed this model works. And he even blames the crash on corporate greed. Where they chose to maximize profits through cheaper labor.

www.saturdayeveningpost.com...

originally posted by: burdman30ott6

originally posted by: Jay-morris
Thank you for not explaining how it would work! You do not seem to understand how this works! American workers are not going to do the same work for the sort of money these people are making. So, if the wages go up, then the product prices will sky rocket, if they do not put up the prices, businesses will fail. It's not rocket science!

So please explain how it would work?

Profits are made in 2 ways... mark up and sales volume. When the American manufacturing base build up again, the disposable income of many Americans will increase. This will be because it will be more profitable for many workers to take $20 an hour jobs in manufacturing plants than continue their $7.50 an hour job flipping burgers or bussing tables. Those jobs will return to the segment of the populationd they were originally supporting: younger workers on a part time basis. As the middle class strengthens, companies will see their sales increase well above the current levels.

Wages are NOT the driving factor behind cheap imported goods anymore. China's average wages have nearly doubled in the past decade, logistics are the real sticking point and, as with all things of a learning curve nature, logistics are easily adapted and changed.

www.technologyreview.com...

Assembling those components into an iPhone costs about $4 in IHS’s estimate and about $10 in the estimation of Jason Dedrick, a professor at the School of Information Studies at Syracuse University. Dedrick thinks that doing such work in the U.S. would add $30 to $40 to the cost. That’s partly because labor costs are higher in the U.S., but mostly it’s because additional transportation and logistics expenses would arise from shipping parts, and not just the finished product, to the U.S. This means that assuming all other costs stayed the same, the final price of an iPhone 6s Plus might rise by about 5 percent.

A 5% increase in sticker price in exchange for several million new jobs at 2-3X the wages and since discretionary income is based off subtracting a series of set values (average rent, utilities, food costs) from your pay check, 2-3 times your current wages equates to considerably more than 2-3 times your current discretionary income. (Math example... if Joe makes $10 an hour at a full time job, his annual take home is $20,800. Let's assume he's left with $1200 of discretionary income after all his bills are paid. Now Joe takes a job at USA Made Tech for $20 an hour, or $41,600 a year a doubling of his base salary. If the cost of everything increases by the 5% cited in the linked article, then his cost of living can be assumed to rise from $19,600 to $20,580 leaving Joe with $21,020 of discretionary income now... that's 17.5-times his previous discretionary income level! Suddenly, Joe can afford his own iPhone.)

Someone here definitely doesn't understand economics, and it seems to be you.

You are looking at the perfect senerio, and it will not happen, not while business are making huge profit on cheap labour. No matter what you say, companies will always make more money using cheap labour.

This is not going to change. Your perfect senerio is not going to happen. Your senerio, prices will still rocket, and businesses will go under.

Yes workers wage has gone up, but still crap compared to living wage in most countries in the west.

originally posted by: JAGStorm
www.cbsnews.com...

"Construction, transportation, telecommunications, machinery manufacturing, and computers and electronics companies will feel the greatest impact from the tariff hike, according to Moody's."

They got the above statement wrong, the people that will feel the greatest impact are the consumers, most likely the middle class. We always are.

But just how much... really...

I've read numbers like increased prices in the neighborhood of 3, 5, maybe 10% at most.

So what? Anyone who can't withstand that for a while is in pretty bad shape.