Skip to comments.Labor is NOT the number one cost of manufacturing.
Posted on 07/03/2019 11:24:29 AM PDT by central_va
Rush is spreading false economic assertions again. Labor is NOT the biggest manufacturing cost. For example cars, even if union labor is used, the cost per vehicle is only 8% on average. I posting this to prove that we are selling out US workers for a few pennies on the dollar!!
(Excerpt) Read more at rushlimbaugh.com ...
Also add up the labor costs of producing the parts.
Rush, 3rd world labor is not saving the consumer much money at all. All it does is ruin small towns and cities all over the USA. Off shoring creates socialists, drug addicts and burdens the tax payer. A lot of losers in this scenario, all to shave a penny on the dollar at retail.
What are talking about ? The parts come to the factory in box. the labor has already been factored in.
This seems like it’s shoes. The “outsole, upper and leather” must have been made somewhere else than the factory where the final product was assembled. Therefore we’d have to know how much of those costs were labor.
If we exclude those, then LOP was 27%/36% of the rest, which is 75%.
You are correct. Most automotive moved to Mexico and not primarily for cheaper labor but because Mexico has 50+ bilateral trade agreements with several countries that manufactures and ships material at far less cost than the same product having to go through the US. Estimates placed the savings per vehicle at 1500-2000. US regulations + non existing trade agreements + tarrifs (prior to Trump) is what killed the automobile manufacturing in this country.
LOP included the factory profit and overhead. How much is just labor? Probably < 10%
Just to be clear, you are talking about assembly, not manufacturing. There is a huge difference.
Where were you from 1988 until 2016, Rush?
I’m talking about outsole, upper and leather which is most of the cost. Do you understand what you’re looking at? It doesn’t seem like it.
If that were true then absolutely NO cars would be made in the USA. My educated guess is the "savings" are less than 10% of that. Corporations keep it a secret what they pay for labor and how much is costs. You have to sleuth around. I think if we knew the truth we'd lynch them all.
My theory is a very small import tariff would eliminate completely the labor advantage of the 3rd world. That is why the go bug f-ers over a small 5% tariff. That small tariff would eat the entire margin slave labor provides.
It depends on WHAT is being manufactured, FFS!
Generalizations are pointless. And dumb.
What are you talking about, those uppers and out soles are stamped out an very non labor intensive. I doubt if human hands touch them until assembly time.
He’s too stupid to argue with. Trust me.
So Limbaugh pulled his “most of the cost is labor” out of his copious arse. I’d agree. He needs a staff to do research. He does misinform the public often.
Post manufacturing costs of shoes, with stats and data on labor costs etc. Do it or shut the hell up.
Assembly ranges from the very simple (pulling products spit out of a machine and packing them into a box) to the highly complicated (automobiles).
Similar examples can be cited for manufacturing.
If Ford produced its Focus model here, for example, they'd probably have to sell it for $25,000 just to make it worthwhile to even produce it. The problem there is that nobody would buy it for $25,000 ... because almost everyone shopping in that price range would pay just a few thousand dollars more for a much better Fusion. So the Focuses would be left unsold and production would be dramatically cut.
But Ford must sell a certain number of Fusions just to meet its average CAFE standards for all its vehicles. So Ford must either sell the car at a loss, or move it to a place where they can slash costs to the bone and perhaps even sell enough in the local market (Mexico or China, for example) to make it worthwhile to even keep the factory operating.
I will grant you textiles/clothing are an outlier but post ANYTHING (durable goods) made today that is labor intensive meaning “most of the cost is labor”. Most being > 50% of cost. Post facts and not feelings.
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