Posted on 12/29/2012 7:49:19 PM PST by neverdem
Again, you are showing your ignorance. Ever hear of mass production creating a lot of an item per hour? When you can name 4 of the 7 basic cost categories in the cost of a manufactured good, then get back to me.
In the meantime, enjoy your emoting.
Most products have a much higher labor component than 1%. Even among highly automated mass produced items labor costs are still usually much much higher than 1%. Your product is an exception. It is not the norm.
And typically U.S. Labor is much higher than 3x Chinese labor. Remind me not to have you negotiate labor costs for me.
“Most products have a much higher labor component than 1%. Even among highly automated mass produced items labor costs are still usually much much higher than 1%. Your product is an exception. It is not the norm.”
True and in the case I listed that cost is just under 10% of the production cost in the US, and that includes 10-12 direct labor heads.
“And typically U.S. Labor is much higher than 3x Chinese labor.”
Not true. Fully fringed “simple manufacturing” labor in the US ranges between $21-23 per hour, specifically in your state it is closer to the $21 range in Vonore, but is a little over the $23 rate in Nashville. The fully fringed rate in China for the same operations is $7 USD, which may vary as currency rates change.
“Remind me not to have you negotiate labor costs for me.”
No problem, however I would love to be across the table from you!
According to a special study by the U.S. BLS. Bureau of Labor Stats - Manufacturing in China China's manufacturing wage for 2008 was $1.36. And reports were estimating that wages were rising 20% a year.
The following information published by China and which is more recent, shows monthly compensation for 2011 ranging from $216 to $513 a month, excluding Hong kong and Macau. So conservatively estimating that Chinese only work 40 hours a week (and we know that's not true) then $216/mo equates to $216/(40hrs/wk * 4.3wks/month) = $1.25 per hour. So a range of $216/mo to $513/mo equates to $1.25/hr to $2.98/hr. And we know those are overstated because they work more than 40hrs a week.
Hey, but I'm sure the Chinese quoted you $7 an hour. LOL Is it too late to renegotiate?
Labor rate does not equal fully fringed labor rate.
Monthly compensation averaged for an entire province is not the same as a specific category fully fringed labor rate.
If that's true then the total labor cost in the U.S. for your product must be 10% * $41 = $4.10. If the difference in labor is 3x to 1x then assuming equal productivity I would have expected to see a labor difference of $4.10(3x) - $1.36(1x) = $2.54 not $0.80.
An $0.80 cent difference implies that you are having to hire ($4.10-0.80)/$1.36 nearly 3 times the number of Chinese to do the same job as workers in the U.S. That's a huge productivity gap. How do you explain that? Are you not providing the same tools as in the U.S.?
Oh that’s right, I forgot about the massive fringe benefits the Chinese companies provide. /s
OK, now you are being purposefully obtuse. If you are not willing to engage your mind, then I am done with you. You clearly have no understanding of manufacturing cost and you have no interest in learning.
Buying labor from China legally under the current rules doesn't make you a traitor. But advocating that the rules stay the same when our industries are being decimated and unemployment is at 24% and rising, does make you a traitor.
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