Future Of The Philippines...

[i am bob]

Thomas, you are so bang on!

We in the west have demanded higher wages until we have priced ourselves out of the International market. Our only saving grace is that we still lead in design and ingenuity. I'm not trying to be racists here - it's got to do with how students are taught from an early age but Chinese engineers just don't have the ingenuity and imagination to compete with the western world... Though that is changing too! So if we don't smarten up on our engineering, manufacturing and production, the west will resemble the eastern world we knew 30 or 40 years ago - a worthless economy with no work and people living hand to mouth... Oh, wait.... :mocking:

[Dave Hounddriver]

We in the west have demanded higher wages until we have priced ourselves out of the International market.

Sorry but I don't see it quite the same way. I was earning the same amount of Canadian bucks when a C$ would buy 75 cents US as I was when I got over $1 US for that same buck. So I think it is the exchange rate that makes all the difference and that is political.

If the Philippines plays around with their currency too much then the next thing you know it is like the Mexican peso and all these local people making 250 pesos a day are suddenly quite well off in the international market. But their paycheck will still buy the same here as it does now.

[nor cal mike]

We in the west have demanded higher wages until we have priced ourselves out of the International market.

Sorry but I don't see it quite the same way. I was earning the same amount of Canadian bucks when a C$ would buy 75 cents US as I was when I got over $1 US for that same buck. So I think it is the exchange rate that makes all the difference and that is political.

If the Philippines plays around with their currency too much then the next thing you know it is like the Mexican peso and all these local people making 250 pesos a day are suddenly quite well off in the international market. But their paycheck will still buy the same here as it does now.

Dave, sorry, but I don't understand your analogy. Obviously, the U.S. has priced itself out of the labor market and that has led to millions of jobs leaving the U.S. for cheaper labor cost. As manufacturing has fled the U.S., other nations have benefited by The U.S. becoming consumers only sending not only our jobs, but our dollars as well overseas. This in turn has caused other economies to increase at a much faster pace than the U.S. and caused the value of the dollar to decline worldwide.

[i am bob]

Even with the 75 cent dollar, we were losing manufacturing jobs to Mexico and Asia with their cheaper labour. Now that the Canadian $ is worth more than the US $, it's even worse. Even the grocery stores are changing over to Asian products. Fresh produce that used to be Canadian source is now imported from South America most of the time. I even looked to see where my 10kg bag of flour came from but it only says that it's imported. Imported flour in Canada? You can get it but it's twice the price! At least we have good Canadian gasoline... Oh, wait! The gas we get here is from Venezuela! Canadian gas mostly goes south of the border and is retailed at less than what we pay at the pumps (before all the taxes). That's what we are looking at now...

[Old55]

Jobs are slowly returning to the US due to the shortage of skilled workers in China for the most part.

[JJReyes]

GATT made farm produce and manufactured goods virtually duty free on a global basis. At the retail level, more than 50% of the items sold at Walmart are manufactured in China. Very little is from the United States. For larger, more complex manufacturing such as commercial aircraft, China has to buy either American (Boeing) or Europrean (Airbus). if they need more hydroelectric power, the generators come from General Electric. Heavy construction equipment is from Catepillar and larger farm equipment like harvesters are manufactured by John Deere. There are two sides of the coin. Unfortunately for the United States, it favors China because they sell more (export) than they buy (import).

I attended a presentation/conference sponsored by the United States Import/Export Bank. While it feels a little too late, they now have programs to create a more level playing field. Even small businesses can access subsidized trade financing programs with the United States acting as guarantor.

Edited September 23, 2012 by JJR

[Beachboy]

Manufacturing "Walmart Stuff" -- I have a completely different take on this. The US manufacturing sector is the largest in the world. It produces $1 trillion a year. China produces about the same, with huge difference. The US produces its $1T with 10 million workers; China employes 100 million. Forget about the Ipads, the majority of their stuff is low margin consumer products. The US produces products like airplanes, turbines,x-ray machines,locomotives. There's nothing wrong with US manufacturing.

The question is: do you want to want to produce Walmart stuff in the US (assuming you could). No way, I say It's far better to import the stuff. I came to that conclusion 25 years ago. I was a inventory manager for a little Honolulu clothing We sold cheap clothes to teen-age girls with store names like "$9.99 or Less". The importers would pay about $1.50 for the garments (Taiwan, Korea and Mexico were the big suppliers in those days. Taiwan and Korea has since "lost" this manufacturing business as they got richer). The importers would double or triple the price and sell it to us. We would double or triple that price and sell to the public.

So who was making money? Not the manufacturer and certainly not the workers that made the clothing. We made a bundle and so did the importer. You can't make money making cheap goods, but you can make a heck of a lot by buying and selling them. The wealth in the US comes from this buying and selling. It's the "Service Economy". When people think of the Service Economy they think of the low wage clerks at Walmart. But that't the bottom or ( for many people) the entry level. It also includes managers, accountants, administrators, IT people, logistic specialists, and many other well paying professions. Other companies are also tied into this service economy. IBM, for example, makes a chunk of change by selling retail sales management systems to companies like Walmart. So IBM also benefits from importing cheap foreign goods. This "buying and selling" wealth is spread out through the economy.

So let China produce it's $2 doll and let the US companies sell it for $10. Who benefits more?

[Beachboy]

At least we have good Canadian gasoline

Wait! There's still hope for the Land of the Maple Leaf. Instead of gasoline, you guys can now send your tar sands oil to Texas, where it will be made into gasoline which we will send back to you. We'll take the Venezuelan gas and send it to Ohio. Makes sense (haha). Everything is controlled by the secret rulers of the world, The Oil Industry.

[JJReyes]

(Taiwan, Korea and Mexico were the big suppliers in those days. Taiwan and Korea has since "lost" this manufacturing business as they got richer).

In Asia, it was Taiwan, Korea and the Philippines for garment manufacturing before the industry moved to China. Then China's wages increased to a point that garment manufacturing relocated to Vietnam and Cambodia. Now, the same manufacturers are relocating to Myanmar because the wages are lower. Garment is considered a light manufacturing industry, which means you simply remove the machineries and relocate them to another country.

Beachboy, how do you account for the huge trade imbalance if most of the activity takes place in the United States? More dollars flow to pay Chinese based manufacturers. The money then returns to us in the form of I.O.U. notes (Treasury), which gives Americans the money to purchase more China goods.

[Dave Hounddriver]

So let China produce it's $2 doll and let the US companies sell it for $10. Who benefits more?

China gets $2 it never had. A rich US guy gets $8 from a poor US guy. What was the point again?