For their march around the stadium in London, each Olympic participant will shell out about $2,000 to look snappy. The uniforms wee designed by Ralph Lauren’s form. Then they were made in China.
O, say can you see? By the dawn’s early light? “Made in China.”
This is what happens when federal laws governing hiring and firing are enforced. It’s called outsourcing.
The politicians blame low wages in China. They never blame 70 years of legislation that has raised the cost of production in the USA.
Some politicians call for trade restrictions on imports. That would raise the price of goods in the USA. Customers don’t want to pay higher prices. They want lower prices. So, they buy imports. Don’t blame customers. They want deals. They get better deals from companies in China.
The percentage of the U.S. economy that is imported from China is under 3%. It’s not that much. But it gets a lot of publicity. These imports are part of the international division of labor. They are a free market response to customer demand. Parents in rural China who live on barely subsistence-level farms think that children making socks are a good idea.
The free market is a huge auction. Low bid wins in labor. That is the high bid in terms of money spent to buy labor.
Freedom to work in China is far greater than in the USA. The government does not regulate labor. This is not slave labor. Slave labor is what China had under Mao. Chinese labor is free — far freer than in America. So, China sells socks.
The Chinese central bank creates yuan to buy U.S. government debt. This holds down U.S. T-bill interest rates. Chinese workers/taxpayers are subsidizing wealthy Americans.
This is bad economics for the vast majority of Chinese workers. They have fewer goods (“socks”) to buy. But it is good economics for Ralph Lauren.
So, when your heart swells with pride when you see all those Americans take their $2,000 walk around the track, recall this: Ralph knows how to make a buck. It’s the American way.