200,000 + 32,000 + 27 = ?

[neonlyte]

Foxxcon - Chinese manufacturers of iPod's.

200,000 work at the factory - how do you manage 200,000 people, daily?
32,000 live at the factory.
$27 is the weekly wage - 1/3rd work more than 60 hours per week.

Begs the question - why are iPod's so expensive?

... is that the right question?

Foxxcon report

 

[ABSTRUSE]

Greed?

 

[rgraham666]

Greed?

Ding, ding, ding, ding, ding, ding, ding!

We have a winner!

 

[cloudy]

Ding, ding, ding, ding, ding, ding, ding!

We have a winner!

that was WAY too easy.

 

[rgraham666]

Shh. If our audience at home finds out, our ratings will plunge.

 

[neonlyte]

that was WAY too easy.

Hmmm...

OK - what was the last manufactured (not food) thing you bought NOT made in China

 

[cloudy]

Hmmm...

OK - what was the last manufactured (not food) thing you bought NOT made in China

I can't even remember the last thing I bought that WASN'T food.

I guess maybe it was my newest cell phone...a nokia, but I don't know where they're made (probably china).

 

[3113]

Begs the question - why are iPod's so expensive?

I dunno. How much would they cost is they weren't made in China?

Apple use to make all computers in the U.S. People complained that they were too expensive and didn't buy them. So Apple moved operations to China like the rest of the computer makers. Now the computers are what Americans consider reasonably if not cheaply priced.

 

[Zeb_Carter]

Foxxcon - Chinese manufacturers of iPod's.

200,000 work at the factory - how do you manage 200,000 people, daily?
32,000 live at the factory.
$27 is the weekly wage - 1/3rd work more than 60 hours per week.

Begs the question - why are iPod's so expensive?

... is that the right question?

Foxxcon report

Right question, maybe.

But, labor may be cheap, then there is the shipping and the import tarrifs and everyone who touches them takes their cut and let's not forget about the government, taxes that have to be paid, etc., etc.

 

[3113]

Right question, maybe.

But, labor may be cheap, then there is the shipping and the import tarrifs and everyone who touches them takes their cut and let's not forget about the government, taxes that have to be paid, etc., etc.

Parts, too. Labor may be dirt cheap but parts are not always so cheap.

It's one of those unhappy truths that had never quite changed--if there's a large population, then labor is dirt cheap. And the cost of something rarely reflects the effort of the labor put in to make it--it reflects a lot of other things, greed and desirablity on the market included, but not labor.

 

[wazhazhe]

Hmmm...

OK - what was the last manufactured (not food) thing you bought NOT made in China

My Japanese car that was built in Ohio.

 

[rgraham666]

Well hell. What with each member of upper management demanding yearly bonuses equal to a couple of thousand Chinese employees lifetime pay, corners had to be cut somewhere.

 

[Xelebes]

Well hell. What with each member of upper management demanding yearly bonuses equal to a couple of thousand Chinese employees lifetime pay, corners had to be cut somewhere.

The problem is that the workers don't demand they be paid higher unless they want to be fired. The labour market there is a lot different there than it is here.

A good example is even here to demonstrate the difference. In St. John's or even Toronto, you couldn't imagine demanding 13 dollars an hour and getting hired. But in a high-demand labour market as in Edmonton, you can demand 17-20 bucks an hour and get it, provided you have a forklift license.

 

[kendo1]

Ding, ding, ding, ding, ding, ding, ding!

We have a winner!

Banana phone!

Ken the Red Admiral

 

[The_Darkness]

To answer the question and respond to other points....

They're expensive because people pay it. When MP3 players hit the market nearly a decade ago, they were 300 and 400 bucks a pop. They've been getting progressively cheaper, and Apple just hit the right market where Creative and the other people weren't.

Shipping over seas is crazy cheap. The last factory I worked at we used to do a bunch of work on a hydraulic cylinder, ship it over to China to have one part put on it, and ship it back to the factory 30 miles from the factory I worked at so it could be painted and shipped....sometimes back to China. We go through that entire process at a more cost-effective rate than we could to simply buy the parts in bulk and have them shipped over here to put them on at our factory. Materials over there are cheap as hell too, because there's not as much mark up when the parts are produced in-country.

But yeah, like anything....a computer that costs 125 bucks to make sells for a grand or more...a car that costs maybe 1,000 to make gets sold for 30,000. That's simply the nature of things in economies. If you don't like it, stop buying it...prices will drop.

That or produce a superior good and sell it for significantly less

 

[neonlyte]

To answer the question and respond to other points....

They're expensive because people pay it. When MP3 players hit the market nearly a decade ago, they were 300 and 400 bucks a pop. They've been getting progressively cheaper, and Apple just hit the right market where Creative and the other people weren't.

Shipping over seas is crazy cheap. The last factory I worked at we used to do a bunch of work on a hydraulic cylinder, ship it over to China to have one part put on it, and ship it back to the factory 30 miles from the factory I worked at so it could be painted and shipped....sometimes back to China. We go through that entire process at a more cost-effective rate than we could to simply buy the parts in bulk and have them shipped over here to put them on at our factory. Materials over there are cheap as hell too, because there's not as much mark up when the parts are produced in-country.

But yeah, like anything....a computer that costs 125 bucks to make sells for a grand or more...a car that costs maybe 1,000 to make gets sold for 30,000. That's simply the nature of things in economies. If you don't like it, stop buying it...prices will drop.

That or produce a superior good and sell it for significantly less

Thanks Darkness (and others). I understand the economics of this - iPods (and other products) sell for the price customers are prepared to pay and Apple have outsourced production to a low cost assembler as any savvy producer would do.

The $27 dollar weekly wage is also, within the general scheme of things, 'reasonable' for the workers - none of us could survive on it but we are not living in China. What I find intriguing about the numbers is a factory that employs 200,000 people - that is four times the population of the town where I live! The daily management of that number of workers is mind boggling. And 32,000 living at the factory - that's a town!

It is a demonstration of the industrial might of China, it is going to be interesting to see how China handles the next twenty years, it has done remarkably well in the last twenty.

 

[rgraham666]

China's doing well now because it has the sort of advanced authouritarian government that suits capitalism. Now that they have for all intents and purposes dropped Marxism/Maoism as their official ideology.

Whether it can remain so is problematical.

First as the capitalists grow more powerful they'll threaten the power of the mandarinate. Which may cause the mandarins to decide they don't need any capitalism after all.

In a place as crowded as China the pollution problems of modern industry are magnified. China the land might not be able to handle the poisoning of its air and water.

China's biggest customer, the U.S. is in dire financial straits. When that customer collapses, as I believe it will, China's economy will be in trouble. So will the rest of the world's but I believe China will suffer the most.

 

[neonlyte]

China's doing well now because it has the sort of advanced authouritarian government that suits capitalism. Now that they have for all intents and purposes dropped Marxism/Maoism as their official ideology.

Whether it can remain so is problematical.

First as the capitalists grow more powerful they'll threaten the power of the mandarinate. Which may cause the mandarins to decide they don't need any capitalism after all.

In a place as crowded as China the pollution problems of modern industry are magnified. China the land might not be able to handle the poisoning of its air and water.

China's biggest customer, the U.S. is in dire financial straits. When that customer collapses, as I believe it will, China's economy will be in trouble. So will the rest of the world's but I believe China will suffer the most.

Rob, I think it depends upon whether China's domestic markets reach critical mass. Wages will rise over time and domestic economic growth will spiral - has inflation problems but when your selling to 1bn people on your doorstep that hardly matters. Also China has in excess of 200 years of domestic coal reserves, likely as not they wont care about global pollution in driving their own economy forward. I read somewhere that China built more highways in the last five years than the rest of the world combined. China registered patents annually outnumber patents registered in the rest of the world. We could be seeing the first capitalist government founded on Marxism

 

[rgraham666]

I'm not sure China can be considered Marxist anymore, neon. The Chinese have often been a very pragmatic people.

And because of this, they might not regard ecological collapse as a bad thing. It would solve their population problem, wouldn't it?

One of the things that worries me most in North America is in that stat you mentioned about China registering so many patents.

I read another stat recently. China graduates three times as many engineers and scientists per capita as North America. Europe as well. India twice as many.

We however excel at turning out MBAs and lawyers.

Why doesn't that make me feel better about our future?