Quote:
Originally Posted by dippin
I'd never thought this would be that difficult to understand. No, I never said they have no bearing on the final product cost. But let's review:
Median wage in China: around 2000 dollars, year
Median wage in the US: around 39000 dollars, year
Minimum wage in China: around 124 dollars a month (this in the province with the highest minimum wage)
Minimum wage in the US: 7.25 an hour
So, again, the idea that outsourcing is caused by taxes is nonsense.
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The comparison in dollars can be misleading. Chinese people don't generally buy goods and services in US dollars. On the surface it appears the median wage ratio of 19.5:1 would translate to living standards, but it may not. For example what is the cost to feed a family of 4 in China compared to the US? Is it still 19.5:1? What about the cost to shelter a family of 4, 19.5:1? Costs for other necessities? Then what are the things that are required in the US that may not be required in China. Then we could also look at taxes, perhaps after taxes (all taxes) that $39,000 per year is really $24,000 and that $2,000 may be equal $12,000 in benefits from national wealth based on the way the country distributes its wealth, I don't have exact numbers, I am just using some numbers to illustrate that the 19.5:1 ratio may be different than it appears on the surface.
Taxes is only one variable.