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How Much Would it Cost to Make an iPhone in America? - How Money Works
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- Опубліковано 15 сер 2024
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How much do you think it would cost to make a smartphone like this one here in the United States?
How much do you think a manufacturer would end up selling this American made phone for?
And most importantly how much extra would you be willing to pay for your next iPhone, Android (or Nokia brick) to have it made in America.
You don’t need to answer just yet, but these are some very important questions that have equally serious implications to consumers, companies and some of the most powerful economies in the world.
#TradeWar #HowMoneyWorks
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Trust me this channel is the new economics explained
I for one would pay an extra 25%, but I rather suspect I have more antipathy for China than most folk.
4:15. Your math is incorrect as no one can consistently work for 24 hours.
2:28 One thing you’re forgetting is that back in the days of local production these items were not treated as disposable and would last for decades, not just a few years.
He alluded to that.🙏🏼
@@thaihm
Kind of, but he did it in a negative way.
That has more to do with intentionally designed/planned obsolescense than foreign manufacturing. Their job is to build to the design and quality specified by the client and not necessarily higher regardless of the place
Still they would be prone to problems because if a company doesnt sell its not profitable even if they re made in USA
But does an average consumer want that? I guess maybe with dishwasher, washing machine etc. yes, but phones evolve so fast these days(even though maybe we are reaching a point when they won't). Most people buy new phone before it actually breaks these days either way and almost no one would want an decade old phone. Same goes for other electronics. Pretty much anything "smart" evolves so fast that they become obsolote way earlier than in past.
I worked as a project engineer for a major consumer products company. I was on the meetings discussing margins and their greed was astounding.
When manufacturing moved to China, the prices of goods once made by europeans and americans did not go down. CEO compensation and corporate profits sky rocketed. If manufacturing is retracted, corporate profits and CEO salaries will need to decrease dramatically in order to afford American/European labor.
This does not benefit customers at all 😅
it shouldn't benefit the customer lol pay the same price or more
Over the dead bodies of those big executives
Excellent point.
@@kidmosey Tesla spends zero dollars advertising and is made in America.... I'm not sure how much Apple spends advertising the iPhone but I'm fairly certain there isn't an American alive that hasn't heard of an iPhone so any money at all spent on advertising is pretty much money wasted that could easily go into the pockets of employed Americans.... right to repair wouldn't hurt either....
There are a lot of things glossed over. The loss of local manufacturers coincides with the loss of the middle class. Things might cost more but all of our wages would be higher with better benefits to get workers. Less crime, only one person would need to work per household, less e-waste, etc. We don't need a new phone every year we do need a bigger middle class.
"Nokia brick" (shows tank) Nice
that's real stock footage of the Nokia 3310, what do you mean.
What tank? All I saw was the Nokia it was kinda fragile looking for a 3310 tbh
Nice
Lol! I clicked like before I’ve even heard the videos argument.
NOKIA 3310 where are the days,,, and the 8850 i had when 3310 came out :)
"an tv would cost a month worth of salary"
-everyone in Latin America: no shit , Sherlock
In my country it cost the equivalent of about 3 months. New Iphones cost the equivalent of around 6 to 8, without the interest of buying it in multiple payments.
@@sirbruno95 Same here, well, 13 month of salary actually (twice minimum wage)
Exactly, in my native country a good tv will cost about 3 or 4 months of minimal wage, but that's a standard for US, they tend to think that they are the only people in the world and that every single consumer product was designed with then in mind
@@alissonhouridovale It is a video about America. It is no surprise that what is going to be talked about are prices for, let's say, *America*
@@cosido8863 Yeah you are correct, the video is indeed about America, however my response was not about the video, I was talking about a cultural way to perceive consumer products, I see that same kind of behaviour in my country
Another large factor is the cost of the legislation/regulation . For example, In a North America factory provide disabled support , fire suppression , capacity limits, environmental and disposal laws and generally rules that add to the cost of facilities and operations while for the case of safety and/or comfort can be avoided elsewhere. Wage is a small part of it.
The goal : Maximize shareholder revenue, not spend extra if it can be avoided.
Self-sufficiency is the real American dream....an actual dream.
you need to sleep to actually achieve the "american dream" lmao
@@royk7712 No, you just need to not make shit decisions.
Now, on a side note, some people genuinely can’t help some of the tragedy in their life. Family friend of ours developed ALS seemingly out of nowhere and has been paralyzed from the neck down. Our hearts break for those people and so am NOT talking about them when I say:
People love to bitch about the system being against them but rarely take time to use introspection on their life to understand what they can do to improve.
Wife and I both started at minimum wage jobs. We’re by no means rich, but we’ve gained skills and get paid more because of it and we’re comfortable.
We have friends that make more money than us, but are living paycheck to paycheck because they make shit financial decisions.
Food for thought.
@@kindredxxix4578 I'm guessing the financial decisions involve a brand new car. Maybe a brand new boat or a giant house they don't need.
@@CarrotConsumer And you would be correct! Lifestyle inflation hit them hard. Wife and I still live minimum wage lifestyle with occasional splurges. They did not keep same lifestyle as they got more money.
@@kindredxxix4578 You seem to forget that keeping manufactring would also mean, importing a lot of material, while all the refining and investment within the primary sector would need to be domestic, that's a lot of investment and modernisation, and a lost of long-term / high-risk investment plants. Also the upkeep costs and modernisation cost of equipment would be expensive too, this would either cause even more waste which is a chaotic system with years of delay and or proper recycling one of these days. Economically having surplus production would mean wasted capital which ideally should be exported, therefore the treasury would need to take info account the cost of the dollar so people buying domestic products wouldn't be wasting money on the FEX market because the currency is too expensive, meaning even more inflation most likely to devalue to dollar, although that's fine because if I remember the oversea's dollars vs the domestic dollar have different values, accounts with the FED and costs to make it more affordable, meaning inflation in the FEX market might not affect domestic dollar.
"After moving all production overseas it's hard to get it back, because production of one thing relies on production of another thing, and all things are produced overseas". Yeah, who could possibly predict this?
APPLE stands for APROVING SLAVE LAYBOR !!!!!!!!! in any form !!!
Ross Perot predicted it.
why OVERSEAS???????????? HUH to CUT COSTS,,, and to evade TAX,,, those are the 2 reasons why APPLE and so many others are so succesfull,,,,, BY RIPPING OF THE PPL aka the F customerz, and apple is garbage !!! overpriced pizza that came from a potato, and that works for 50% globally,, APPLE NEEDS TO DIE URGENTLY,, I TRULY HOPE ELON WILLLLLL DESTROY THAT SO CALLED WET DREAM FROM STEVE JOBS,, OR WAS IT BC OF THE PASSING OF JOBS THAT IT ALLL WENT TO THE SHITEBOX? that is indeed some idk, but when it comes to apple,, and microsoft its all garbage,,,, for what we have today,,, it could have been 10-100% better already,,, IF IF IF THOSE LOSERS DIDNT think ABOUT $$$$$$ in the 1st place,,,,,,, if you have brain,,,, think about the product,, ,, but no,,, this is why we need a rapid elminination process for ppl to die EQUAL $$ or not,,,, like in china,,, it does not matter there if you got $$ or not,, LOL cant wait to learn to speak CHINESE,, i truly hope they eventually will do some to prevoke :-)
The sad part of all this is that this is self inflicted. The USA and Europe willingly moved over to mainland China 🇨🇳 to have the majority of our manufacturing occur there. This was pure greed. There is no other way to explain it. Simple greed.
And nobody understand that ALL of this was here before moving it abroad ?
Automation in manufacturing in the next 10 to 20 years will mean products can and will be more cheaply built in the U.S. or any country that invests in automation. Labor costs will be low, and production will be high. We will see companies bring manufacturing back to the U.S. but unfortunately, not many jobs. Only industries that can't be automated will remain in low cost labor countries.
China is FAR ahead of the US in automation. East Asia is the hub of automated factories-for obvious reasons.
Where you think the automated machines parts are produced
@@achintyanaithani889 exactly. The research and development generally is located or relocates to where the factories are. That's why China is way ahead in terms of not only the automation of factories, but also supply chain systems to sustain industrial production within massive manufacturing hubs. If the US does not reshore manufacturing it CANNOT compete. Technology does not just fall from the sky and is immediately usable.
@@achintyanaithani889 i think the US should loosen Environmental restrictions and bring down their cost of living and minimum wage in order to compete against China
@@triadwarfare China's climate is already shut. Their lakes are drying/Polluted. Their land is not as green as ours. Hell if you need to paint a land green to resemble grass. Then you've got a problem
I don’t mind paying more for “American made” products when there is an actual difference in quality. One example is the company Origin Maine. I buy my Jiu Jitsu gi’s from them and they cost up to 3 times what another average gi would cost (most are made in Pakistan). But there is a very noticeable quality difference in the Origin Gi, and it’s worth the extra cost.
@Martin Wagoner yes, he’s a co-owner
You're not ever going to get that price/quality ratio here in America anytime soon.
The thing is, an american made iphone will be more expensive, but quality will be the same, they are manufactured in china, but the factories need to comply with the company requirements that include the quality of the materials used and assembly specifications. The design team is the one in charge of increase the quality, not the factory and the company decides the price that is convenient for them to reach the profit they want
Most if not half of American would not pay more..
Case in point why do half of cars in US not US brand, Anerican buys Japanese n European cars..
Apple would then loose 1/2 of their biz, for what.. Nationalism ?
Lol! 300% inflation world mean you can only buy 1/3 off a gi!
I think the saddest part is that everyone think you need the newest iphone to survive in the first place over cooking a healthy meal for your family, helping your neighbors, or holding your own human values.
True ehen i was younger i always wsnted the latest phones but i realized that the new phone was not much better than a phone a quarter of its price. Since then i just buy phones when yhey are atlesdt 2 or 3 years past the release date since the price drops alot but then
@@realgmagc327 lmao. I buy a phone every 4 or 5 years
Lol you think the iphone specifically responsible. My neighbor is old school and his biz is to kill trees. Nothing more. Hes not respectful or nice, hes a total asshole.
People have been neglecting their families for decades if not ever.
I mean they don't but ok
@@raz1572 when only 36% of americans cook at home but over half own a type of iphone?
I love how when he said Nokia he put a picture of a tank 0:14
lol
that picture was a fact. lol
Wait, they're not the same?
What tank? All u saw was the Nokia but it was kinda fragile looking for a 3310 tbh
I'd pay an extra 20-30% for a USA made device, and very often do this exact thing when it comes to tools. While quality is part of it the reason is actually usually the warranty. USA made tools often come with a better warranty than their offshore counter parts. This implies that they may be more resilient and/or have a better QC process.
So what you're really saying is that you're willing to pay more for quality/after sales support and not that you're willing to pay more for nation of origin. The question was all other things being equal would you pay more for the exact same device with the exact same support with a "Made in the USA" on the box instead of a "Made in China".
You shouldn, instead you should expect the CEOs should be paid 20-30% less.
Everyone says that. Then prices bump up and nobody asks why they just rage.
But that is not the point of the video.. the point is that once companies invest billions of dollars on recreating the skills, ecosystem and supply chains you find on China today, and figure out how to get millions of people to work on manufacturing for $15.50/hr, an iPhone would be a 20% more expensive due to labor... and probably 300% due to all I just said before.
@@shaveeeSure. Not expecting consumers top constantly trade them out for a newer model would settle that. Instead of the average of 3 years make it 6 and viola, the phone is half the cost over the duration.
The only issue is that economies of scale will kick in and cut into that but overall better for the consumer and the ecology. Not good for profits or CEO pay or the stock market though so not acceptable . To be fair, this is been an issue for nearly a hundred years and attempts to fix it just haven't worked.
More expensive phones means less ppl upgrading every year, less waste.. also less "incremental" upgrades and more substantial upgrades on longer cycles
Nope, they will keep that planned obsolescence timeliness unchanged. The common US citizen will have to rough it with older phones.
not specificly,,, if its not designed in that way all you get is useless updates containing same BS Or nothing new,,,
WHY CANT PPL USE THEIR GREY MATTER,,,,,, OOOOH RIGHT,, its alll been vaccuuuuuuuumed into a ,,,,,
Yes same with clothing 👌☝️ I work as a tailor and a seamstress and I have to tell people this all time.
Making products to order could also be a good solution even for tech. No deadstock waste and less production waste. Its easier on an individual craftsmen too, you don't always have to meet a crazy quota.
Things like that could offset costs of paying people enough and meeting safety regulations
One of the almost impossible hurdles to overcome in US or other locale production is the incredibly efficient essentially vertically-integrated industries nearby. In Shenzhen, if you need a specific size of tiny screw, you can have literally millions ready for use in a matter of weeks from the submission of specifications. The entire city is one massive "industry" dedicated to producing electronics and with it, enormous economies of scale that could never be replicated elsewhere.
Kinda reminds me of a time I worked at a plant which essentially produced metal-braided hoses. It was small LLC and owner had an idea to go full on supporting local manufacturers.
He gave up 6 month later when we couldn't find a single one who could reliably deliver 3 tons of wire meeting out specs on weekly basis. Not even a truckload!
If it’s been done it can be done again elsewhere
@@jackgeorge6288 sounds like vapid fortune cookie wisdom
@@jackgeorge6288 Sure, it can. So the brass and industry will get their stuff even if old sources will be cut.
Consumers? Not so much. I remember 3d printers costing $5k a pop for the cheapest on the market. I won't be too surprised if domestic PC will cost the same (After all, we already get domestic fiberboard monitor hoods for a whole Benjamin and that's literally a two-piece fiberboard with two rubberbands and a knob).
That's the problem of US - expenses are justified by salaries, but salaries are justified by government power over other countries. For this system to be sustainable, 1)US must dominate 2)World should stay in good health.
The problem is, US slowly loses it's grip on both parts. And once order will flip, it's long way to rock bottom without any parachutes.
@@Aggrofool Nonsense. There is nothing magical about some geographical location, unless it's a literal gold mine. The factories able to do these things didn't always exist. They were built. Much of it was built with western technology -- thousands of American factories literally dismantled and moved to China, and their expertise shared with the Chinese government.
On the other hand you need to develop local manufacturing base.
They shipped jobs overseas when the Civil Rights movement began to disempower locals growing in power. Italians and Irish weaponized unionization against the government too.
@@williampearson6299 What are you on? Jobs went overseas because Clinton signed a trade deal that allowed overseas manufacturing. American businesses saw a way to get around labor laws and took advantage it. They would of done even if unions didn't exist.
It's impossible to get back manufacturing in us bcz it's gonna against the fundamentals of large scale manufacturing in a capitalistic system . If you look at around the world the manufacturing lies in most poor countries or mid income ones at max , wheras if you look at most of the non manufacturing jobs in the world like coders they will be found mostly in rich nations bcz 1) the value these coders or other tech jobs can produce could be a lot and infinite like a bunch of coder can tommorow make a billion dollar company . In manufacturing first of you need huge amounts of labour which only produce a certain amount of value per capita they can't drastically increase value in a. Manufacturing outfit unless they get in more employees or more billions in innovation in the factory machines to improve value . So big manufacturing industries mostly go into. Countries with very low gdp per capita income so that they can get high volume of employees at low costs like . In India my country If tommorow apple open a manufacturing plant and they say we will employee 100k people . And the starting salary will be 5k a year . That 5kusd =370k is like easy middle class in India easy to support a family . Heck even no income taxes on that Money . But he has a productivity 1/2 of an American worker due to the hdi diff . But still just calculate how much Money they will save (apple) from opening a plant in India than In usa . On top of that there is more :-
1) much benefits aren't there to be provided
2)large consumer base aldready there . Like yes buying a 1000$ iphone is very expensive to indians where 2k is the gdp per capita.but still the top 5-10% who can afford those are still creating a huge market
3) tax benefits provided by the govt bcz unlike us India has higher unemployment rate and quality jobs, so govt will be desperate to bring them In .
This same thing happened with China but 40 yrs ago but now everyone is leaving bcz all of the positive points above are now becoming decenitvising bcz
1) high gdp per capita
2) more benefits
3) less taxation Benfits as govts aren't desperate to get employment
@@bloodwargaming3662 you must have it anyway for the purpose of national defense. Government must step up and help bring necessary manufacturing back to USA. Same as being done in Japan in last 2 years.
Many components used for defense are the same as for commercial.
This is not wishy-washy, this is necessity of the world we are living in.
Pure capitalism is not working here, that is why your logic is not fully applicable.
@@emilywatt5126 us is pinnacle of pure capitalism which why it shall fall. Believe me
Just started the video, but my first thought is, the cost would only go up if they wanted to maintain the same profit margin. Apple is a trillion dollar company. So I’m ready to see what kind of margins they are currently making. Don’t forget they used to manufacture in America.
They have high profits but nowhere near the profits of software companies.
Ideally, we should be putting tariffs on products produced in countries that lack labor & environmental laws similar to what we have. Domestic companies cannot compete when foreign firms don't have to comply with laws that we have instituted on ourselves.
@@Razaiel That's what EU plans to do.
Their current profit margins are due to exploiting labor, if there are better regulations then employees can be paid a good wage. This requires politicians who give a fuck
@@Razaiel And US would fumes when the other party doing like wise. Haven’t we learn anything from the last 5 years ?
Honestly, I'm so sick of buying stuff that breaks if you look at it wrong, I will happily endure not having junk for a couple years until more home-grown production fills the gaps. Not everything made in China is junk, but enough of it is for me to not want to take the risk of buying it if an alternative is available.
It's called planned obsolescence bud, remember when your TV broke and instead of hitting the dump you made a call to the repairman? He came over, looked at year, make, model and said it'll cost X and be Y until it's ready. I remember the tail end of that where are they now? That X could cost less rebuying it now so instead of looking for a repair the people chuck everything out save their phones and rebuy it without thought.
@@brianjohnson5272 I've had my smart phone for 9 years. it still works just fine, a bit slow sometimes. I take care of my stuff. unlike all the plebs.
@@michaelxcx my grandfather has a gen 2 smartphone, and Verizon cut it off saying "it can't update anymore, you need a new one." It was G2 compatible. How do you explain a fully paid in near perfect condition phone g2 usable being taken off the service 3 days after the bill was paid?
Lol that's an iphone problem than a Chinese problem. I'm using my Chinese phone just fine after several years and some pretty harsh handling that would probably have broken an iPhone a dozen times
@@theoderic_l I was reffering to a tap handle... how does the handle break and not the tap? How does that even happen? The metal was some type of mixed pot metal with bubble voids in it is how, but it had a nice coat of paint so it was impossible to see the defect. A pencil grinder that was rates for 100 PSI but it blew apart at only 80 PSI. I got a free replacement but it had a bad bearing. A really nice looking slip-adjust crescent wrench, but the slide was made of plastic, so as soon as you actually put torque on it, the plastic slide deformed making it stick in that spot when you tried to slide it. I can honestly go on with this list for hours, but to your iphone comment, iphones are also made in China.
It basically comes down to whether the value of having a consumer supply chain independent of the ccp outweighs the added costs for goods. Imo, as time goes on, the benefits of distancing ourselves from China increase by the day.
Until they fall, and the US unprepared to take the industrial load bears the strain.
57% of China's energy consumption is to power its factories. Can the US power grid even bear the strain of manufacturing that is done by China?
Far easier than China can. America has the tech, land,know-how and laws to enable fracking to a level no other country can reach. If the US decided to bring industry back, it could absolutely harness enough energy to do so.
@@yankeefederer1994 it COULD once upon a time. Now you have 100 people going 100 directions bringing 100 rights groups with 100 ways that are "correct" and not a one syncs with the other 99. I still can't believe few in the US see that we WERE the greatest but now you have too much bloat inside the workers. If any group dares to actually MAKE them work you get lawsuits, you fire a person who's views are different, they scream discrimination and sue. Rinse, repeat, ad nauseum. Until you get the ppl en masse to move in lockstep with even their worst enemy America's potential will never be reached and 9/11/01 couldn't even do that for a year.
There needs to be crackdowns on planned obsolescence.
Ultimately, what this video points out (pretty well, although there were a few points I think needed to be expanded upon) is that the average American really does not understand manufacturing. Whether it is in America, or any other country in the world, manufacturing any product, but especially high tech equipment involves a highly complex set of variables. This is not a task you can simply move from one country to another.
Using Trump as a foil here, when he constantly used the term "return manufacturing to America" he clearly did not understand the undertaking.
A lot of people will say "corporate greed" or "politics" or any number of reasons, but at the end of the day manufacturing high tech equipment is not something that can easily or be quickly relocated. Additionally, over time, technology changes and even if we did bring back manufacturing, it would not be what we expect.
A very good example would be appliance manufacturing, which greatly affected Ohio. If you look at the Chinese manufacturing sites, you'll find much of that manufacturing has been automated, or "roboticized". Even if we did bring it back, it would only be a fraction of the original number of jobs.
Lastly, I continuously hear "never by cheap Chinese junk".
There are certainly things made in China that are substandard. What most people don't realize is that most of that "cheap Chinese junk" is at the direction of American retailers who have said "make it cheap because no one will buy the expensive stuff'. In other words, it's not cheaply made because it's made in China, but cheaply made because we ask them to.
America has this arrogance of "made in America means it's top quality" appears to have forgotten the debacle of the 80's when Japanese cars were embarrassing Chevrolet, Ford and Chrysler, and it took Reagan's trade war (not dissimilar to Trump's anti-China trade war) to get Japan to back down.
The big difference is that China isn't backing down and we're losing the war. They learned from the mistakes Japan made.
Instead of making a better America, we're making America "better" by trying to make other countries worse. Hardly anything to be proud of. We simply let our government schmooze us with self-esteem to make us feel we've been wronged and it's made us complacent so we've lost our ability to compete.
You know the picture!!!
Well said! 👏👏👏
On top of that, there are leeches in the ports that get paid a lot so long as certain amounts of cargo remain at the port and people can't get their product fast enough as a result.
In other words, products are made more expensive due to arrogance of naive people running for office AND leeches that just want their cut while running the economy to the ground.
exactly. we asked for cheaper prices and mass consumption, our booming middle class at the time was hooked with consumerism, we created the globalist media machine and the giant brands like coca-cola and McDonald's that spread worldwide. everyone wanted to be "American", and being "American" meant keeping up with the Joneses. that's the culture WE in the USA collectively created and propogated as a signifier/new definition of being a "first world country": cheap prices, massive exuberance, the latest playstation for the kids, black friday sales, 2 cars and a suburban house. why tf are we surprised that countries satiated that culture and got rich in the process?
Genuinely well put. As a European I’ve always thought the “bring jobs back to America” battlecries seemed at best to not understand technology manufacturing
True up to a certain point. Many things in China are substandard even for the internal market: its history, how quickly they adapt and learn new jobs (without becoming specialized), the speed at which products are made and low quality source materials all contribute to a poorer quality overall. Not always of course, and it does not always matter, but even buildings for example inChina are built at an astonishing speed but start falling apart in a span of decades. It's a different system, government, mentality.
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I'm a young dad, I'm really glad to hear your story it inspires me.
What is fire movement please.?
@@CarolPLopez-qh9qj Fire means Financial Independence Retire Early.
It's been a movement teaching people financial independence and how to retire debt free through solid investment and frugal lifestyle.
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You haven't still share any idea on how you earn weekly.
Different question. Do we really need a new phone every 12 months that is designed to be hard to repair? Same goes for other products that are designed to be sold, not to last.
Our mindset has been transformed to throw it away when it breaks and buy a new one - which happens to be just the new model.
Would our quality of life diminish if our stuff lasted longer? Or could be repaired?
Yes! Thank you!
I am glad that I am not the only one thinking this.
One cool video I saw on here was about the light bulb conglomerate (definitely look it up) but it was when light bulbs were too efficient so all the company’s said let’s reduce their life. Luckily we have LEDs that have phased that out and the conglomerate pact essentially dissolved in the 50s or 60s I think it said.
Companies will do anything for profit which is pretty fucking sad
One cool video I saw on here was about the light bulb conglomerate (definitely look it up) but it was when light bulbs were too efficient so all the company’s said let’s reduce their life. Luckily we have LEDs that have phased that out and the conglomerate pact essentially dissolved in the 50s or 60s I think it said.
Companies will do anything for profit which is pretty fucking sad
It's not really your fault, but this vid is the first that rubs me the wrong way. Specifically, the part related to the expense of building a local workforce from scratch. Investor calls at the largest tech companies such as Apple show that they could eat the cost with zero effort, and still be making a huge profit overall. Further evidence includes the declared amount that Intel is paying to have a manufacturing facility for their processors built here in the states. That cost, amortized over the time taken to complete construction, is well within the company's comfort zone. If intel can afford it, so can Apple. They just don't want to because that would mean their shareholders would get slightly less than the (pardon the hyperbole) infinite money Apple prints for them.
can never beat good ol corporate greed
Intel and Apple makes completely different products.
The issue isn't if they can afford it, It's that they'll make more if they keep things as they are currently.
To tempt manufacturers to move back, they have to make at least as much as they do now, preferably more
Or you can by decree propose an offer they cannot refuse. If presented with the choice of business or no business, they will build here if that is what it takes to remain in business.
Funny you mentioned Intel because they are building a huge industrial complex in Vietnam, just 25km from my house too. That Intel plant is slated to go into full operation as early as next year.
The question should be how much less profit would the corporation make?
They'll never try to make less than what they do now, always more profits for companies
Just don’t buy,they will.
Here's the thing. Stop buying their shit, they will go out of business. People whine constantly about those evil corporations and their evil profits...while buying all the things those evil corporations manufacture. The entire propaganda rant about "evil corporations" and "evil profits" is astonishingly ignorant.
@@droe2570 Dude, what your saying just doesn't hold true. It SHOULD, but it just doesn't work that way. You can't just tell hundreds/thousands/millions of people to stop doing something because you say so, unless your all for totalitarian ruling.
And take a look at the gaming industry as another example. Microtransactions have gotten progressively worst over the last decade, and it's been statistically proven that a vast majority of gamers *AREN'T* spending money on them. It's a small minority with excess wealth that is pumping 100s of 1000s of dollars into this shit.
You say "stop buying their shit," yet like I said, a vast of gamers don't and these corporations are still making record profits every year.
If in china then alot
For phone manufacturing cost though, the answer is "right to repair" legislation. If you only have to buy a new phone once every 5-7 years, then paying $1500- 2500 for it is, relatively speaking, not as big of a deal.
If I pay *any* four digit number, even plain $1000, that thing better last at least a two digit number of years. Everything else is a *complete* rip-off.
My galaxy S8 is a few months away from being 5 yrs old and still works, just depends on how you treat things. Might replace the battery soon lol
Don't worry Apple is working on a non-repairable iPhone. They will integrate and solder everything into place making any repair very costly. Now what?
@@thecsucihai "Now what?"
Simple. In the right to repair legislation there will be a provision that makes that sort of behavior by corporations illegal.
Considering a $300 phone can last that long if you really need it to what your saying is completely insane
If those 350k Foxconn workers are working 24 hours a day, they must have some hella staff turnover.
It's probably more like 10-12 hours. You need to roughly halve your labour figures.
The other thing to consider is that higher labour costs would result in more of the process being automated. The US workers will be more productive, not necessarily due to a higher skill base, but because more of the work would be done by machine, solely because labour DOES cost more. The work done in China by three workers and one widget will be done in the USA by one worker and three widgets. It's not a simple substitution.
Anyway it is still more expensive then you would like.
And that American with 3 widgets want 5 times what the 3 Chinese want. Efficient yes, practical, no.
Yep, you need to halve his figure as a starting point, then probably bring it down a bit more from there
I work for a Taiwaness electronical manufacturing company in México. And no, 24 hr shifts are not even humanly capable; however they do work 12 hours + maybe 2 hr overtime. You still need to consider these companies like to employ Filiphines labor, which are accomodated in hotels INSIDE the manufacturing facility (which means 24 hrs availability of personnel).
Automation is a must for US companies, even here in México we are strongly looking yo automate the most basic tasks in order to lower costs (even though Labor cost cutting is not the solution!!)
That's why some of those workers committed suicide if you check the news in China
A great article - you also have to consider the grotesque profit margins (keeping shareholders happy). Prices are not set by production cost + profit any longer. Prices are set by guesstimating the price a consumer is willing to spend for an item.
I would pay 50% more for everything if it was made here in America.
This country would be doing so much better if we kept our production jobs.
No it wouldn’t. You people complain about oil price even though it’s pretty much the cheapest in the world
Capitalist: "NO!"
Only reason why it's so cheap it's cause they are treating their own Chinese workers like slaves with how low their wages are
Somebody else who's keyboard hates them! I sulute you!
Quite an illusion.
They could have hold on to manufacturing jobs like Germany did but even in europe manufacturing has been more to hungary or other eastern European cities.
"We would have to train people" Every industry has to have a training program in place because these proprietary skills are not taught in college. As for assembly, if gamers and hobbyist can learn to build their own computers, then assembling these components would be as simple as running a small tutorial program every time you move the components in a phone to improve the product. This is not rocket science. Oh wait, Elon's team trained people for spaceX which flies regular missions to supply the space station. So it is possible, and all of this assumes that you need to keep that final profit of $400 per phone. That profit is only available because people are willing to pay to have the status symbol. If not, that iphone price would drop because it has plenty of room.
Right! Saying that US workers are too "dumb" to learn these skills is silly. When I was a kid the Chinese were walking behind oxen in the field and people said that of them. Besides, if people aren't taught those skills, high schools and community colleges will begin to do it as the need arises.
Fax
@@daniellarson3068 HS are currently debating which bathroom to use. Which version of Slavery history to teach. Got no time for Technical Education.
Dell computer used to do that! I worked at the metric 12 location in Austin Texas before they closed it down and moved everything to Asia because they said they couldn't compete with their fellow greedy American companies.
Hell, EVEN CHILDREN CAN DO IT!
In Asia, they have floors in malls just dedicated to inexpensive components, parts, tool&die and other manufacturing pcs, I have yet to see one in NorthAmerica (maybe ‘pacific mall’ but it’s no where near what Asia has access to)
But its pure chinesium. It does not even out by being cheap and easy to break.
Your actually told your not allowed to fix your own phones in the US as well
"Well if you replace your cracked X your payment plan must be paid in full immediately so if you damage your phone further you don't just give it back."
We used to make out phones in the US. I am in the Chicago area, and am well aware of what Motorola was doing. They built a plant in Harvard, Illinois, which was an outer suburb of Chicago. I was a great thing. Not long after, they moved the plant to China. The leaders of the plant went to China to set it up. Some of them ended up staying in China. Even at salaries that were not fantastic in the US, they were wealthy in China. The issue in the US is that our cities have made it expensive to operate. Industries then move out to the suburbs, and then out to the countryside. This is insane. The people are in the cities. We end up spending on welfare for these people when they could be employed for decent wages. This is a travesty brought on by urban elites and unions.
A good example is the food processing industry. I am in my mid-60s. I have met people in Chicago (I am not from here) who, as teenagers, worked in the Chicago Stockyards. Now, all this meat processing is out in the boonies. No wonder we have lots of illegal, and legal, immigrants working in these plants. With the welfare system we have, and the prospect of having to move to deep rural regions, do we not have these people moving to where the jobs are. We need to move the jobs to where the people are.
In addition, the conditions in the Chinese factories are such that we would not accept them in the US. We are just moving production, and poor labor practices, to places to where we have no control. It is this way with pollution as well. The true cost is hidden. Considering the massive profits that companies like Apple make on these products, there seems to be something broken in the system.
Perhaps the answer is to make phones last longer, since we're already at the point of diminished returns, and in some ways into negative returns. This isn't limited to phones either.
Yeah i can agree to that. They just dont build stuff to last anymore, cus oh look next year we got the BETTER, FLASHYER, MORE EXPENSIVE version.
Best answer, i want everyting to last minimum 10 years, but things are made to be broken, parts are not available are not made to be replaced. Unlikely in near future unless we force companies to take back stuff at the end of their lifecycle, but they might pass the buck back to us.
@@jaywerner8415 if I was the onwer of a company that wpuld not dooo I need my gadget that I sell to you sir to start malfutioning after a year sooo you can buy my new and improve junk that I just slap a random small upgrade and name like S99 or turbox100 or what ever and put a nice biger price tag on it whyle I can produce that item at(lest say)fraction of that price and since your older junk is starting to take a piss on you, you dont have a choice but tooo buy my new shit, and we upgrade all the programs and stuff so the device can get udated so it becomes usless and cant run nothing so you be force to porke some money for my slik and amezing 3d holagram huya. Welll thats a company trying to make a profit out of you every year or month now days lol...
@@DH-Dorado-Horizonte They know they got us by the ballz and are milking us for all its worth.....and more.
@@jaywerner8415 sooooooooo true sir...
It's important to note that the componants would also cost more, you say "the price of the other variables would stay the same" but recalculate the cost of putting the parts together as 6.2 times more expensive. Surely the componants, which you state cost more than double the rest of the costs (not including the profit) would also go up in price? I doubt that getting the super cheap labour to make all the parts, then shipping them over to the states to assemble, is hardly fair to call "made in the USA"
You gotta consider the cost of building facilities in the United States and how much more they will charge for those items.
Building them in places where land is expansive and stuff needs to be close by.
Well the cost of building the facilities could be a good thing as it creates more construction jobs. The only con is that having more factories return locally will just bring the pollution from across the seas to here.
@@PaulsGoldWeapons It's not good for the company manufacturing products. They want to reduce costs.
Five years of environmental studies etc.
As brazillian, I'm just laughing cause the taxes, lack of infrastructure and the way the government handles everything, makes everything so expensive which makes anything crazy expensive wherever it's made
People also tend to forget that when American manufacturing was at its peak people kept things for at LEAST 7 years and repair skills were taught in school :P
@@kamilareeder1493 I don't know when was that, but so you can relate, Brasil used to have a law protecting local market which made a few rich industries that imported, dismantled and reassembled goods so it could be called a national product
@@guilhermebertholuiz1560 most of the biggest of your industrial are with a lot of politician, like in the us, russia or france (lvmh or renault)
@@sotch2271 that’s the norm everywhere, people around here just don’t care, and I’m pretty sure Russians also doesn’t care about anything other than it’s food on their table, which pretty much sucks
Incomplete. 400usd company profit also includes costs of tje company like: salary of workers in supplemental dpts like marketing finance shop workers, rent costs for shops and offices etc. So this is more complicated
Those are a bit extraneous because you need local versions no matter where the widget is assembled. An Apple Store in Manhattan costs what it cost to have a high end retail location in Manhattan regardless of where the product is made. Likewise for, say, selling your stuff in France.
This cost is why region lockouts were once very important for video game makers. The cost for a game publisher in Japan to have a US operation to localize, market, and sell the games was a big expense many companies simply couldn't afford, so the games were licensed to a local company. That company doesn't want their game to compete with copies of the game imported from Japan. There is going to be some delay between the native region release and the foreign region release, so a game that needs little by way of localization could be huge hit that includes 10% of the shipped units being exported to the foreign region and eating into the sales of the licensing company.
So each region had a slightly different version of the hardware that plays the game (sometimes VERY different cosmetically, as with the original Nintendo 8-bit hardware) that allows software to test whether it is the correct machine for the region intended for the specific version of the game. This has largely disappeared today as a lot of the underlying factors have changed, at least in the regions of the developed nations.
@@epobirs thanks for the ted talk
@@epobirs i think we should abolish regionalization. It's just anticonsumer and no reason to exist in the digital age
So this doesn't change the math by much.
@@triadwarfare why?
Just one day I wanna see a post on this channel that won't get me depressed. Jk I love your work thanks for all the info.
Unfortunately, that'll likely never happen, because the more you learn about HOW MONEY WORKS (especially from a Western point-of-view), the more you'll realize how disgustingly bullshit it all is. The existence and flow of money on this side of the world is super depressing.
Real sad boi hours :(
U have times where ur *not* depressed?!?
Unfortunately it's just the cold truth of reality... 😔
I don't find this depressive. Because chine build phones work
A few other issues that aren't mentioned:
1.China would have a massive issue with apple taking away production, they may even ban Apple, which would be a major hit to Apple, since as you said they're the biggest market.
2. China is also the largest producer of rare earth elements, which are extremely dirty to mine. With the environmental standards in the US it just wouldn't be possible. If China took the "nuclear option" and just stopped exporting those, no one would be making electronics, or at least they'd be extremely expensive.
3. You actually kinda touched on this but the US doesn't really have enough workers to fill the positions required, even if they were paid the average amount the increased demand would drive the labour cost through the roof
4. Economies of scale probably also plays into this, making all iPhones in one place definitely drives the cost down, as opposed to having them split between 2 or possibly more places
So there, too massive reasons apple wouldn't want to risk their bottom line for no real reason. People just need to accept we live in a global society nowadays.
Well said
That's why everything is expensive for third world countrys, we live in a global society and yes we have to accept it because we have no choice!
@@timi_r0 every country has to put in the dirty work at some point. China didn't just become a industrial powerhouse overnight. Unfortunately with third world countries there's a almost always plenty of corruption, cronyism and mismanagement.
Besides issues with JIT and tense China-US relations, I feel like this doesn't quite capture the dynamic between the negative externalities associated with outsourcing manufacturing and our ability to appropriately regulate said activities. We're now dealing with the repercussions of human rights abuses, climate change, fast fashion, microplastics, the yearly gadget upgrade cycles, etc. and it might be easier to sweep the issues associated with each under a rug, ignore them entirely, or admit defeat because they're outside our sphere of influence. Not the main focus of the video, ofc.
JIT? Japan, India and Taiwan?
@@apollo1694 perhaps "just in time", the now-typical way that companies have things shipped in only when they need them, and keep relatively short stocks of things on hand at any one time. We've seen plenty of supply-chain shocks over the last couple years which resulted in empty store shelves and waiting times, that are definitely affecting business-as-usual.
I am slowly working on an e-waste/scrap metal business.
good luck i wish i had the capitol to do the same.
It also largely depends on automation in production. In my country we have increased automation since our salaries are quite high, but we still generally make better quality stuff.
And what country that might be ??
Yes, what country?
Mamy things are harder automate and is actually cheaper to employe more humans than automate.
Denmark
FROM WHERE THE FUCK ARE U,,,,, u still make better stufff,,,,,,, compared to what?
Companies could very easily have their products made in the US or any Western country and keep prices the same. They'd just have to accept lower margins. Might be a gamble worth taking by governments at some point because I'm pretty sure the vast majority of executives like living in the West. "If you keep operations abroad then you have to live where the factories are." This should be government policy. We had Brexit in the UK and London is one of the largest financial centres in the world. All the high earning finance people like London culture so when companies started talking about re-locating to Germany because lots of their business was on mainland Europe anyone with authority rebelled and the discussion was shut down. I would be my life savings that if governments were willing to deport executives profiting from having operations abroad they'd move some back.
Sourcing goods made locally is best from a security and environmental perspective. Sourcing good from a variety of places from all over the world is still generally doable. Sourcing all your goods from one foreign country is a very, very problematic spot to be in, as evidenced by what’s going on right now.
Sometimes, there are much more important factors to consider than just prices and costs. If we keep manufacturing in China, thereby enriching them who in turns use the money to build weapons like hypersonic to decimate us. Besides, they can hold us hostage as they do supply chain clogged up. There are many other countries, like India and others, which can replace China.
Trade is best insurance against war, but capitalists moved too much factories to china, when there were lot of cheap options. Chinas weapons are for show unlikely to go to major war, they will loose more than gain aka MAD.
With hoe advanced out automation tech and how many are good for oversight roles,we could easily replace china if we willed it.like we land planes on auto piolet and now have cars doing the same shit.making a product is a joke with American company's and the ips they hold.darpa robats?
India infrastructure aren't good enough to replace china
I think even Adam Smith recognized that strategic industries shouldn't be outsourced to potentially hostile foreign countries.
@randomguy8196 All the parties have nuclear weapons, even if trade fails hopefully this will hold the balance and a sane mind.
Hey! I'm actually researching global supply chain reshoring for my Master's thesis and I think you slept a bit on three massive assumptions: The convergence of advanced technologies (Machine Learning/Artificial Intelligence, 3D printing, advanced automation, robotics, etc.), ESG incentives/climate risk, and rising wages in emerging markets. Many companies are considering reshoring operations closer to home if they can automate the costs of local labor with hyper-efficient automated systems. These value chains are a lot more sustainable because of the simplified transit system. You can also slash retooling costs in these facilities because the robots making your goods are standardized, mass programmable at a switch, and communicate with each other for maximum efficiency. If you include these assumptions, the goal around reshoring is that we can actually make our goods cheaper, more sustainably, and more responsive to market shocks. The focus of my research (and I think a far more interesting question) is how would this migration of supply chains from emerging markets back to rich economies impact sustainable economic development in emerging countries, since this migration may displace manufacturing workforces and foreign investment. What are your thoughts?
He has addressed that point, the initial capital expenditure is too high for the companies and investors to absorb its easier to manufacture there and ship it to US, even if tariffs are increased.
You toss around terms like "hyper-efficient automated systems" and "mass programmable at a switch" as if they mean something. Have you had any experience or coursework in Industrial Engineering or real world experience on a factory floor?
@@yoppindia Fair point. I'll agree with this argument for now, but less so in the long run (next 2 decades)
@@capmidnite Beyond my current coursework, I shadowed under the supply chain director of a multinational clothing supply chain management firm based in Hong Kong - one of the largest companies of its kind in the world. If the clothes you're wearing came from China, there's a good chance their company played a role in managing a piece of the supply chain. Among other reasons, reshoring makes sense in their particular case because they can manufacture clothing brands/lines with volatile demand profiles in the US, then respond to US demand shocks in real time + A/B test prototypes in real time, versus waiting months for samples or back orders to arrive from abroad.
Apple made the Mac Pro for a while in Texas, which was called the trash can. The issue was there sales for that Mac were bad and they scarped the design. Personally I would pay another $200 to know that my iPhone was made in America. The fact is Apple products will only become cheaper to make sense dumping Intel chips to making there own. Plus with more manufacturing in the US they would have more people with money to sell too. The issue is China is still considered a developing nation and the World Bank Lends them money with 0% interest plus they de-value there currency on top of that. The only way we in the US can stop China from becoming a super power is to take all there perks, but doing so you will have to fight Wall Street, lobbyist, unions, and government regulators. There are still too many people in the world willing to sell there mom to slavery for some of that sweet Chinese business.
You should also account for the labor used to produce the components in the phone if they were also made in the US. That may tack on another $100 or so. Still not too bad.
I'm honestly not super keen on paying more, even if the thing is built here. The majority of what you pay for these things is pure profit anyway, so in effect you're just paying extra to buy the CEO another super-yacht.
The money would go towards ensuring sustainable mining of materials, eco friendly facilities, and living wages for everyone on the supply chain. The ceo would get taxed according to income.
But without slavery
@@itsdonuttime7729 LOL, sure it would! Suuuuuuuure it would...
@@itsdonuttime7729 please share whatever your smoking
@@Joseph-ub5wh I was responding to someone saying they don't want to pay more in taxes. I agree we can't trust just companies to do these things it will take an overhaul or labor laws, legislation, and a lot more widespread change. No one is smoking anything so you can chill out, there is a lot of political discussion on exactly this. It sounds idealistic simply because we aren't going on repeating every minute detail everywhere we go.
So people pay a little more for home grown manufacturing so instead of upgrading on the 'next new thing' people wait to upgrade until they NEED TO. Instead of WANT TO.🦉
In the bike industry, companies are starting to realize that chineese manufacturing of certain parts is actually pretty inefficient as they just use labor to makeup for issues. Some companies have found by moving manufacturing to the US with a much more efficient process ends up being darn even.
Yeah, it just breaks down into capital intensive va labor intensive manufacturing
The only thing that matters is the profits
If you're talking about Mainland China, yes. Taiwan is still the most efficient high volume bike manufacturer of mid level to high end bikes in the world, with unmatched economies of scale. In terms of boutique bikes and parts with the highest quality and design, American bike manufacturers are still some of the best (Chris King, Paul Components, Moots bicycles . . . designed and Made in USA), if you're willing to pay the price.
@@capmidnite yes, specifically I was talking about ibis which has moved some carbon manufacturing to the US. Companies like Giant will always be much much more efficient.
American engineering are the best quality up of all the world 🌍🌍 but I think the cost of labor and competition forces country's with strong capital to sent there factory to other country just to make a balance and open more factory's out too but what had happened was the opposite the factory's ran away from here because the high labor cost and taxes which that what industry country depends on to create strong economy for the capital and the people but unfortunately we depend soooo much on the capital it self to keep the economy strong and that's was wrong for all of us and the manufacturer needs to start over even by 40%that well help
I have a 7 year old 3x fixed iPhone. I can handle not buying a new one ever year and I think everyone else can too. We have what we need to support ourselves, we just have to stop relying on excessive consumerism.
Good for you I have a Samsung galaxy 3 2 times fixed 7 years old
I always like it when UA-cam provides international manufacturing and monetary advice.
Doing a thing like this would probably destroy your entire economy. Think about it, you have a more expensive product that workers want to buy as well. The problem: it’s too expensive for them so they’d demand higher wages which would make the product even more expensive. I think a lot of people don’t realize we have a high standard of living because we are doing it on the back of others who are less fortunate it’s always been like this and will always be like this.
until the others shake you off
People always forget the hidden cost of damage to natural resources when outsourcing
💀
Essentially, you are claiming that the economy is a zero sum game. Someone's profit results in another person's loss.
Except that this isn't true. Today, the quality of life of the average person in a developing country (like, say India or Brazil and not the really poor countries) is about the same as that of a minor noble during the middle ages (if you consider the full picture of healthcare, access to entertainment, variety of nutrition etc).
By your logic, Henry Ford's strategy of reducing working hours and increasing the pay of his factory workers should have resulted in his company going bankrupt.
@@ChasmChaos not everyone is smart buddy
It’s more important to move pharmaceutical and medical manufacturing back to the US than electronics manufacturing. Being dependent on the enemy country that released Covid for pharmaceuticals is a major strategic weakness.
I've invested in Arrival electric because they've solved a lot of the issues highlighted in this video. They make commercial electric vehicles but unlike the vast majority of other companies they're not building mega factories that serve whole continents. They tend to be difficult to improve once built because you have to stop production entirely and of course your have to export your products to many different countries resulting in high shipping and tax costs. Arrival is building micro-factories with modular assembly areas that can build any vehicle design or size. Located near cities in normal warehouse areas they can serve the local market and politicians will love them because it creates local jobs for city contracts. They've also solved the material sourcing problem because they've innovated by making new composite materials that are just as strong but also far lighter than metals and are easily recyclable to the point that if a panel on your van/bus/car (they have an Uber vehicle development contract) gets damaged you can take it to your local micro-factory, they'll take the panel, shred it and form it into a new one instantly.
Micro facilities make it worse
@@jaysmith982 Depends how many components you're shipping in. Arrival bodywork is easily recyclable (they breakdown and reform at every facility) and components are designed to be modular units that can be swapped out easily to get vehicles moving again. They will then fix and reuse any left with them. They'll have as many suppliers as possible in country. Working with more suppliers but each one will only supply to 1 country or continent to keep the supply chains short and give them more options. Most supply chains now are very long with many huge global partners which is why there's current issues (one has a problem and the whole chain is screwed). Arrival will have more smaller suppliers they can build relationships with, control more easily and if 1 has a problem they'll have others with spare capacity.
Can you please do a video on contractors, unions, and the construction/building force?
The American standard of living is predicated on cheap asian labor and has been for 30 years. Everyone says they want to revive American manufacturing but the same people would freak out if the prices at Wal-Mart went up even 10 percent.
The problem is that the American market is already suffering by the outsourcing as this caused the stagnation of income for the past 40 years, which causes the demand do be way lower than it could be. Companies forget that if workers don't make enough money they won't buy anything
the problem with USA manufacturing worker is they cost more and yield less and there is union.
You can argue with quality but company don't need a phone that can last 10 years, their target is 3-5 years.
You can argue there is a union in China too, but the union is China (or Asia in general) is not really demanding.
USA productivity is lower because there are a lot of paid leave and healthcare and insurance.
Parental leave? We have it in Asia, but no one take it,b3cause it is there to attract foreign investor.
I can argue that China's internal politic is more stable than USA.
Investors hate instability, different president-different policy.
Like it or not, investors love a dictator with stable internal.
Imagine, every 4 years there will be changes in policies while a lot of factories are calculating BEP after 20 years - 30 years.
Chinese work 60 hours a week. That means most of the days they spent working, instead of spending with kids and family.
Don't tell me about unions in the US.
Unions are really demanding in the US too.
Wages have been stagnant and the number of union workers dropping for decades.
Yeah Investors love dictators who can demolish their investment in seconds without anyone who can do something against it... truly a perfect enviroment... e.g. Evergrande
@@undercoverhund3631 Does Evergrande make China collapse, yet?
Evergrande is collapsing because China makes a new law that's prohibit the bubbling debt of Evergrande.
Either it is burst now or it will burst at the worse time
I'm glad other people are pinging on this too, but yeah, that Nokia Brick and showing the tank was comedy gold.
Better question: How much would it cost to move iPhone production to _other_ Pacific countries? In other words, what makes China so special compared to Vietnam, Malaysia, Indonesia, Philippines, not to mention South America and Central America?
Biggest issue is stability of the country
Maybe the other countries don't have genocide and suppression of free speech? ...and child/force labor... :)
@@thecsucihai you’re starting to understand
"Substance farm." Subsistence?
Nah, those farmers be growing some substances XD
I tried concept farming, but could not figure out how to conceive proper drainage.
Indian farmers .
@@DuffTerrall grow some parsnips interplanetary with something like rye for better infiltration rates. If the soil is pretty poor try planting a legume the year before and don't till plant directly into the crop residue of the legume.
The 395$ of components are heavily impacted by the labor costs, too. Those chips don't fall from a silicon tree.
I used to work at BMW when I stayed in Greenville SC. The place is HUGE.
HMW finally got a sponsor. I feel like a proud dad
TVs may not be the vest example since the shift from analog to digital hardware changed a lot in the manufacturing process, especially in how much of the process could be automated as that became more effective.
Way back in 1984, when Apple launched the original 128K Macintosh, a significant part of the story for the business press was how these machines were being built. The factory was still in California but the number of workers it took to get a pile of parts into a boxed up ready to ship to retail Mac was considerably less than what was needed to produced the Apple IIe just a few years earlier. The biggest difference was how the boards were populated with chips up to the point they could be installed in the chassis.
That changed came about before overseas production became an imperative, especially in any Asian country other than Japan. And Japan's standard of living was already erasing that gap in 1984. Once digital electronics became the core of many products the nature of how they were produced changed greatly.
4:15 Mistake when calculating manhours required for an iphone. It should be 350000*8 (or 12)/500000 i.e. 5.6-8.6 manhours because those workers don't work for 24 hours but 8 (or more realistically 12 with Chinese labor practices). Even this is probably on much higher-end, watch any repair/assembly video of iPhone and it takes 20 minutes to assemble. With automatic soldering and QC, and a heavily trained and specialized workforce, it shouldn't take more than 3 hours per iPhone (even this is probably an overestimation).
If my calculations are correct, your next calculation related to transporting assembly cost to the US is wrong too and should be not 42$ and 268$, but 14$ and 86$. SO not 200$ difference but 70$.
And please put your sources, so it's easier to check your conclusion
@@IOFLOOD Good point, but it's more of ballpark calculations. It's important to remember that this infrastructure and workforce in China didn't appear out of thin air and with higher costs, companies have incentives to optimise and automatise processes even more. Right now plenty of steps could be made by a robot, but it's cheaper to hire cheap labor, so saying that price will increase proportionally to wages isn't true either.
@@IOFLOOD Very good points, there is reason why companies choose to move manufacturing there. I just think of semiconductor fabrication plants and plenty of them are located in those higher labor, higher regulation areas, like US, Taiwan, South Kore and Japan.
Except Americans are not willing to work in a factory doing repetitive tasks for $15/hour
Those manpower most probably used to operate 24 hours (dayshift and nightshift).
Also they need a lot of manpower because there’s probably a lot of repairing/rework. Contract manufacturers usually use large workforce to hedge the problems that stems from production since these products aren’t developed by them, most of the production process cannot be modified before informing the customer.
That’s what i observed working in my workplace.
@@kmk8223 Maybe, i just assumed that 350000 figure is total employees, not employees per shift
I remember when Nokia made its phones in Finland and towards the end only flagship models where made here..yet the coast was not more then any of current brandds flagship phones so its all relative and much up to the company in question,
I love these intro questions especially since I've heard that the increase in labor cost isn't really a huge component of an item cost
start processors here again for strategic defense. Also the Motoroal Google phone was made here and not a bad quality device for it's cost. So let's get back on it!
Motorola is now a Chinese own company tho
Not a bad idea. Its also why the civilian firearms industry is so critical to national defense. Firearms manufacturers can't survive only off sporatic government and police contracts so most would shut down with only a handful remaining. Having all these manufacturers around comes in handy in a situation like a war. So its great for national security.
Bringing chip manufacturing back would be great to limit reliance on China. The biggest hurdle though would be the cost. Billions to even get it set up in the first place. Then there's also the manufacturing cost. US made chips would also be much more expensive so it would be hard to compete.
For chip manufacturing though Taiwan still reigns supreme. Its also one of the reasons why China has been getting so jingoistic and saber rattle-y when It comes to Taiwan.
High end semiconductors aren't particularly sensitive to labour costs, Taiwan is not a particularly low wage country (its GDP per capita is similar to South Korea) so it would be pretty viable.
@@Croz89 the infrastructure to manufacture the semiconductors though is quite expensive and time consuming though
@@rebralhunter6069 Indeed, but that's really the only barrier. You can build a new factory anywhere in the developed world and the cost of your products wouldn't be all that different. And at the moment there is interest in doing so.
Our guy says "I am personally as pro local industry as they come, and I honestly don't think I would pay extra (for local) if given the choice".... LMAO
I do and in a heartbeat.
The FairTax would fix may of these issues and level the playing field so products made in the US would be less expensive to make.
Before I watch and have the awnser. I think yes and always yes, but always with pain and the pain can range depending on how fast we make a change
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Let's be honest here. Even if Apple did not increase their prices, they would still still be at a net positive.
They keep charging more because everybody is still gonna buy one 😢
@@broccolirob5026 not me
Would have been interesting if you had addressed near-shoring (building plants and infrastructure in Mexico and Central America) which is a solution that has its own challenges, but is not as expensive as onshoring.
What you describe is the end result of corporate exudes. Had tariffs been kept in place in the '70's we would have far less issues today where manufacturing is concerned. Sadly poorly designed, aggressively marketed products are now the norm around the world. Once people learn to look into what products last longer and only buy those products, things should begin to improve.
I would pay extra to buy an item made locally to me. Thank you for the video!
But why?
then why don't you their are thousand of goods still made in us for a competitive price but they just don't have the advertisement or brand names of others you just have to look for them.
I wouldn't
3:00 - "Substance' farm? Did you mean 'subsistence'? I mean, with modern agricultural techniques, perhaps 'substance' farm is more accurate. :-)
I would hope this is just a mispronunciation, but I doubt it, because “working on a subsistence farm” doesn’t make sense. If HMW doesn’t understand what “subsistence farming” is, that undermines the credibility of the whole channel - certainly at least, the credibility of this one video.
@@cglaurer - I was also wondering about that.
Great video. Covered some points I haven't heard elsewhere. Hope this channels keeps growing
I purchased a motorola motox in 2013 that was assembled in Fort Worth, Texas. It was reasonably priced.
Today, you can get a Librem 5 that is manufactured in the US, it costs about twice as much as the made in hong kong phone.
it also depends on apple (in this case) like apple can easily let the price down and still make a profit although less which our shareholders in America won't like
one thing to remember foreign manufacturing especially Asian ones artificially increased the purchasing power of western consumers so its not like they did some mercy by locating their production plant out in Asia
You forgot to deduct/reduce the "shipping & duties" charge of $90 per phone imported from China. $22 per hour is the threshold for middle class, I'm willing to pay more so people have a good life here.
This makes it even more expensive with 22$ wages.
You have to edit employer costs like insurance and more.
Shipping gets even more expensive because you would likely move 100 tiny parts over the ocean instead of one iphone in a box.
@@paxundpeace9970 so? I'd rather pay more to have middle class jobs here. Maybe people would buy the "latest greatest" newest phone every OTHER year instead of every SINGLE year. More people making more money and spending more money = better economy.
yt channels like yours people are the reason an average person like me will actually have the opportunity to truly be financially free
I work in sourcing and there are a lot of key figures missing here. The VAT in China allows factories to work on much smaller margins from subsidiary factories straight through to the finished product. Also the average wages stated in the U.S. don't include insurances, unemployment benefits etc, it is in reality over $20 per hour all in for the employer even without a union.
I believe that wages were insignificant factories moving. It just happened to be cheaper to move where ppl are obviously exploited than pay the taxes here. And idk if anyone else has noticed but the prices of everything has continued to climb dramatically since around the time the internet became common in households. And there are still companies doing it here in USA and for much cheaper than imported electronics.
Doing what cheaper then what?
Did you watch the video?
Retail price wouldnt change because phones are already priced at max acceptance. Cheap manufacturing only helps the manufacturers profits.
If that's true, then creating your own phone brand and selling it at the price below max acceptance should let you win the big share of this market
It can be done. It's a matter of the willingness to make a little less PROFIT. America needs to get back to manufacturing our own EFFing products again, like computer chips and everything that they go into.
If it was possible before, it is possible in the future with the right steps. The pain of doing so would be less than not
The original upstart cheap manufacturer was a rapidly industrializing Germany in the late 1800s. German manufacturers were flooding the British market with cheaply made goods that often copied those of British manufacturers. The latter lobbied the British government to require foreign-made products to be marked with their country of origin. Ironically. "Made in Germany" became a token of high quality manufacture and to this day commands a higher premium than similar goods made elsewhere.
Well, at least British trade killed feudalism. :D
I would pay begrudgingly 30% for purely American made when it's proven quality. I would pay 50% happily for an insurance plan that actually pays to have your phone fixed from the manufacturer.
Seriously the only phone insurance really doesn't even defray the cost of any repair and the US turns a blind eye to it because "it won't happen to them!" and "it's an Indian conglomerate so our laws really can't be applied." I.E. no one would insure phones if they had to pay to fix broken ones."
There would not be a markedly different variable in pricing, but it would still be higher. Here is why; 1. no tariffs - the US charges insane tariffs on imported goods, when that is removed that overhead cost goes away 2. Shipping - the cost of shipping a good from the rust belt of Mid-Western US to a rail hub also in the US is already a factor in shipping today, but he cost of putting that good on a an actual ship, sailing it across the largest ocean on the planet, then paying a port fee will not be a factor. 3. Automation - this is already in effect in the manufacturing facilities across the Asiatic region, and the cost of automation is the same here as it is there.
So, then why would it still be higher? Mainly the reason is wages and manufacturing space is more expensive here by a significant margin. Enough of a margin that it gives these companies an extra 3-5% on margin even after the above mentioned savings. Also, regulations in those nations is much more lax than in the US. Regulations cost money and time, money and time that most companies do not like to eat. Those additional costs, matched with the above mentioned savings, will result in a more expensive product to the consumer.
But, like all things, it is a choice of pro and con. Pro to bringing manufacturing home is that we will have ultimate control over supply chain and provide millions of high wage jobs to those who desperately need one. Con is that your iPhone might cost 50 bucks more than it does today. But is it worth it?
I like the idea of bringing manufacturing back to the US. The main reason is that all economies of scale have always functioned on agrarian and production of goods. The US still holds the big medal on agrarian work, however that is not enough to carry the ball across the line. The US still needs production of goods, not services, to finish that push. We CANNOT be a nation of consumers, we have to build things as well. That is the MAIN reason why this nation is in the economic downturn it has been in for so long. The downturn of shrinking middle class, expanding lower class, and every wealthier upper class. To fix that downturn, you MUST bring production of goods back. That is the ONLY fix to that problem.
The most obvious choice is to limit stock holders gains it should be maintained at certain level this entails lowering cost of the product, however it can also accelerate resource depletion 1% price change can make alot of difference.
Dude. America could easily function without China manufacturing. Tons of companies already moved to different countries because China wages went up as it developed more.
The main reasons are not the wages, the main reason are the insecurities which the Chinese political system offers (let alone all the moral problems, but I'm pretty sure that most publicly owned companies don't care about slavery or genocide). The government can take your company away from you whenever it wants to. You have zero security and zero ways of intervention. That's why many companies move out of Mainland China.
However that doesn't mean that they move to countries like the US in most cases, but rather than that countries like for example Vietnam.
And where do you think those countries get the things they need to make what they make.
how to make the rich even richer:
step 1: invest in foreign companies to manufacture goods with lower labor costs
step 2: close your domestic manufacturing business that you are competing with your own foreign investments and just put your old name on the new country's products
step 3: profit
there's literally no downside... if you own the company.
Buy the company then
Actually, you're just undermining the future if the company is the type that has been in your family for generations. On the other hand, if you're the "owner" in the leveraged buyout vulture capitalist sense, then yeah . . .go ahead and gut out the company, fire all the American factory workers, suck out all the value, dump the company when it goes under and leave with all the fees and commissions you made.
Like Sears and Craftsman tools. Cheap Chinese junk now.
@@alexsloan4976 I think we all would like to buy a company but we cant, but is a good thing we cant because we need people to work and we need the company even do they do shity stuff, like say just make small change on a new version and call it a day lol, If was the onwer I be ok lets make profit of this sukers they are just brainless bafun on auto pillot, we just need to give them the new hot item(drug) and make sure that thing starts to malfuntion after a year and we come out with a new version each year got to make that profit...as a consumer that sucks but we need them and they need us, the thing is a never ending lop,
There's a huge downside on the long run: who will buy your products? With the production moving abroad, the earnings in your most important market will drop and their demand for your products too. As the foreign workers will be paid less, they also won't be able to consume as much as your domestic market so, in the long run, it isn't sustainable
Good review. You did under estimate salary expense. General rule of thumb is that your paycheck salary is 1/2 your cost to the business. (Taxes, unemployment insurance, benefits, etc are on top of salary expenses) Great video, just info to help with your next one.
6:21 "ecomonics that didn't make sense" is a nice way of putting that way.
You are making one big assumption. That to build the phone it would require the same amount of people and training if brought to the US. Right now there's no hurry to automate these kinds of tasks because the labor is cheap. That's not going to be the case in the US.
That is what I was thinking throughout the video
Why can’t the US just develop manufactures in South America? Cheap labor, less shipping cost and it could possibly reduce illegal immigration. 3 birds one stone
Hell let's just Make a AU. A American Union with every nation in the America's joining
Corrupt and unstable governments are a huge problem. The Amazon Rainforest is there as well.
Once you implemented this solution, what is left for the GOP to talk about to rally the masses to vote for GOP candidates? Also, you expect white housewives to start cleaning the house or look after the kids? No, the GOP needs illegal immigration for being elected....and for keeping their housewives happy.
Now this is a great topic, never addressed by economists or politicians.