Re: iPhone 3GS
by SteJim - 7/7/09 4:00 AM
In Reply to: IPhone 3GS by Sweet Crafty
Isn't it ironic that Americans don't want to see American companies do well...just as long as Americans have a job? That's actually the real problem with the American economy right now. It's not that American companies are outsourcing jobs overseas but that the American people are too greedy for their own good. By the way, I'm a born and bred American.
Let's say you own a company called "Company A". You have 100 employees working for you and you make "Product X". And the most you can sell "Product X" for is $200. As I'm sure you know, as the price of Product X goes up, the number of customers which will buy Product X goes down. So let's say you build Product X in America. Because of the unions your 100 employees have joined, it costs you $30 in parts and $20 in labor just to make 1 product. So each part costs you $50 to make. So you're making $150 profit before you include any of the overhead costs like benefits, vacation time, sick time, overtime, redesign costs, marketing costs, etc. At the end of all that, you still might break even with each product. Now, let's say that you build Product X in China where you can get both materials and labor much cheaper. Now it only costs $10 in parts and $7 in labor per product. So now you're making $183 profit per product you sell. You can pass this savings onto your customers, sell more products, and generate a higher revenue than if you were to build your product in America. Since you're building it in China, your expenses are lower too which means you're making a much higher profit.
The reason why China is such an economic powerhouse now is because they have no labor unions. Companies are shipping jobs overseas because labor is much cheaper. What Americans need to do, if they want the country to remain an economic powerhouse, is go back to school and learn a skill other than manual labor. Consider jobs in engineering, marketing, research and development, finance, etc. Those are the jobs that are in demand in this country - not putting iPhones together or talking on the phone and telling people how to fix their computer. In a free-market, the driving force in the economy is competition and all Americans - especially those who seek employment - need to be more competitive. In a free-market, greed is always good but never forget that companies are just as greedy as you - and there's always someone who will work for less money than you.
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