Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (39259)	10/7/2003 8:26:53 AM
From: TobagoJack	Read Replies (1) of 74559

Hi Maurice, <<I bought a pair of jeans ... US$15 about ... Made in China ... start requiring a pay increase>> I inject a dose of reality into your world: (a) The jeans retail in Shenzhen for about USD 5, and still give the middlemen and producing factory a profit; (b) Given (a) is true, it is than obvious that there will be no clamoring for pay increase for awhile, since everything else is inexpensive as well for the production worker; (c) Given that (a) and (b) are true, it is apparent that when a wage increase is in place, it will not materially add to the end cost of jeans to you; (d) Given that (a), (b) and (c) are true, and that landed cost of the jeans is about USD 3-4/pair, a 27% duty on the landed cost of jeans in the USA will not enable a material competitive advantage to USA producer of jeans, and will only hurt the USA middlemen's margin; and (e) as a reminder, your jeans in NZ cost 50% of a microwave oven in the Shenzhen Walmart. Chugs, Jay

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