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The True Cost Of Doing Business Overseas

1193 words - 5 pages

California Congressman Joe Baca once said, “Products made in china are cheap through the exploitation of the work force. Every time we shop, we are driving the nail further into the coffin of manufacturing jobs (Joe Baca).” Congressman Baca hit that that nail on the head, but whose workforce really being exploited? In recent years there has been much discussion of offshoring; whether it be a call center for when your computer breaks, or the manufacturing facility for the air bag that could save your life – what is that little label worth to you. The facts remain clear, every time a company closes its facilities to move abroad many Americans lose their jobs. At first people weren’t too worried when the low paying factory jobs packed up and left, but now middle class tech jobs, and even high level engineering jobs are leaving our country. When you’re at the store looking at the little tag that says made in china, who are you really hurting when you put it in your cart?
It used to be that people didn’t care about the lowly factory worker who was laid off because they sent his job overseas, but it now happens on such a regular basis that people are taking notice. While some people would say “but it saves me money so I don’t care”, the truth is that the savings aren’t always being passed along to you. A perfect example of this is the ever popular iPhone: the components that go into an iPhone cost $14.14 and apple pays the factory in china $3.86 for assembly and testing (Simon, 35). So an iPhone costs apple $18 dollars to manufacture, and its wholesale price is $224, so apple pockets $206 dollars for every phone that goes to market. Rather than passing it’s savings onto the American consumer apple is gouging the very people whom they took the jobs away from. On the upside this very desire to raise profit margins is beginning to bring jobs back, at least in manufacturing. The diminishing value of the dollar, rising fuel costs, and time constraints are beginning to bring some of these jobs home (Engardio, 40). With the value of the Yuan (Chinese currency) rising and the value of the dollar plummeting Europe is now shipping jobs that would have traditionally gone to china to the United States. The cost of shipping iron ore overseas is now higher than the cost of the ore itself, and with oil on the rise it becomes more feasible to re-fire some of America’s steel industry. Tesla motor cars, makers of $100,000 electric sports cars, has now pulled their battery production out of china. Tesla claims that both the shipping costs were getting too high, and they didn’t mike their money sitting in the middle of the ocean for months on end (Engardio, 40). While we may be regaining some jobs in manufacturing we are still losing many of our technical service jobs to overseas competition.
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