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Politics : View from the Center and Left
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To: Mary Cluney who wrote (125212)11/20/2009 11:50:29 AM
From: cosmicforce  Read Replies (1) of 542745
 
Letting the small and inexpensive goods go abroad and hoping we'll hang on to higher margin business may be a dangerous slippery slope that continues us down the current path. The same is true of clothing. With a sneaker price of almost $100 there is no reason why those $10 of materials (max) couldn't be made here for a profit. The problem is the profit is MAXIMUM if it is made abroad. To bean counters it doesn't matter that it may only be a few percent more.

A 3x markup is a good rule of thumb for whether you have a viable manufacturing business or not. My daughter wanted bell-bottoms and they were $72 at the mall. These were made in China. How does $6-10 of fabric become a $72 pair of jeans at half price! The problem is that there are too many intermediates between brands and the store shelf. Each of these sucks off money, and doesn't provide much high skill employment.

With a growing population of low skill workers, we need labor intensive operations that compete with, and exceed, the standard of living provided by thuggery, thievery and street crime. The true cost of having two generations of people without any prospects can't be reversed by factory automation. I think high-end (and high-tech) agriculture and low end manufacturing (brooms, housewares, vacuums, etc.) has some potential, but legions of strawberry pickers is not going to reestablish American dominance and the high employment levels of the 50's.
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