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As a young economist, I’m trying to spread the message that China isn’t to blame. Many times we are taught that China is to blame for our economic downtime, that their cheap labor prices is COSTING us.
Picture yourself going to a Nike store. You see a Jacket that you really like for $100 and decide that you’re going to buy it. A few day later, your friend sees the same jacket at the Nike outlet store for $60 and he decides to buy it. Would you have rather spent the $100 or the $60?
China’s cheap labor is actually helping us. True we may be outsourcing much of our jobs into other countries, but in this way we are helping others and ourselves as well. By spending less money to produce something in another country, we have the leftover money to spend here. There is an argument that jobs are going to other countries, but think of it like this. Would you rather pay a worker who came out of college $20 an hour to mow your lawn, or someone who can do it for $10 an hour. It is unreasonable to pay someone so much for a job that can be done cheaper and of the same quality.
(Very interesting photo, more detail in future post)
On the issue of quality , America blames that since the price of Chinese products is so cheap the quality is bad. Many times China has been pushed to increase their renminbi value. In my opinion, an increase in renminbi value would not help us, because the companies that are doing bad jobs will continue doing bad jobs. Just because you are paid more does not mean you will do a better job. Sure this might push some bad companies out of the field, but there is too many companies to actually make an impact.
So think about it, if you had spent $60 on that Jacket, you’d have the extra $40 to spend on something worthwhile.