It will always be like this until scale ramps up and costs come down as infrastructure ramps up. China's advantage is always communicated as cheap labor but it's also the ability to almost infinitely scale production lines in a short period of time. America has mostly lost the muscle memory and tooling to do this. And that ability to scale matters with materials costs.
There are incentives that would benefit domestic producers and companies but those take time and don't make good soundbites for politicians.
The blunt tariff sledgehammer that was dropped isn't going to do it. Small experiments like the one in the article will try and mostly fail. Meanwhile producers will find loopholes and workarounds to tariffs. And the margins and viability of domestic designers and businesses will continue to weaken.
Consumers will increasingly eat the cost and lose the convenience.
I think it is worth mentioning how much more cheap capital is available for manufacturing. Chinese state policy—- monetary, fiscal, and social—- pushes up the savings rate, enormously lowering consumption, while restricting the range of consumer financial products. That puts more savings in state banks and keeps interest rates low.
This has come up at the expense of their own consumption however, and a reliance on exports instead. Thankfully China has been focusing on diversifying their export markets along with increasing internal consumption in the last decade.
In Factorio you throw iron ore in an electric furnace and it turns into iron plates. In reality you need coal or coke or charcoal to reduce iron to its metal form. Steelmaking is one of the largest single source of CO2 for a reason.
This is just one example among many. The truth is every single facet of industrial production is incredibly complex and there does not exist a single video game that captures all the nuance. Period. Factorio abstracted away all the boring details of industrial production and that is why it is good entertainment. But it’s still just entertainment. To think someone would become knowledge about industrial production because he played Factorio is like thinking someone is a good driver because he played Mario Kart.
China's biggest advantage wasn't just the ability to scale (which means available labor), but also having entire supply chains in relative proximity, tons of small manufacturers making all the little parts needed, all located in southern China.
That's a bit less true than it used to be. Shenzhen supposedly used to work that way. When some small factory ran out of capacitors in board assembly, they'd send a runner to Huaqiangbei for another reel. But now ordering has mostly moved online. There's less of a role for all those tiny stalls stocking components.
That just cuts out a layer in the distribution chain. The part you want is probably manufactured not too far away.
The US used to have manufacturing cities where you could get everything you needed in specific industries. There was the New York City garment district for clothes. Mary Quant, inventor of the miniskirt, writes in her autobiography, "Quant by Quant", about her first visit to New York with a native guide. She was getting things set up for manufacturing in days instead of the months it took in the UK.
Detroit had cars, of course. Most of the auto parts suppliers were nearby. Now, the US auto industry is very spread out. "Trenton Makes, the World Takes" is still on a huge sign in Trenton, NJ., but it's more nostalgia then reality. Waterbury, Connecticut had watch manufacturers and other mechanical precision devices.
Those centers of industry are mostly gone. Even Hollywood is in troublel
Cheap labor is the key in that scaling, though? Human labor is still far more flexible than anything else that we have. And a big part of that flexibility is how cheaply you can turn it off. There is a reason seasonal employment is a thing.
I live in Philadelphia. We had a lot of manufacturing here, but most of that vacated the city center in the 1970s and 1980s. I recently was doing some research into urban renewal around my neighborhood, and found a paper about the city's efforts to address a concentrated population of perpetually drunk homeless men, mostly centered in my neighborhood, mostly squatting in abandoned buildings or living in flophouses. The city's approach was effectively to remove them and spread them out - and bulldoze the neighborhood to make way for a federally funded highway, now I-95. A lot of manufacturing businesses just called it quits - the owners had made their money on the backs of cheap labor and hadn't really set up any kind of succession plan, but could retire comfortably. Others moved, mostly out of the city, and by the 90s, that labor was moving overseas.
And that's why I don't really foresee that kind of manufacturing coming back here. In order to survive the race-to-the-bottom pricing that the majority of Americans crave, you need a large labor force that will accept some form of sub-par living conditions. But if you can't earn a living wage, you can't afford to participate in the economy in a way that supports the manufacturing, and then you're back to those mid-century slums.
I'm dramatically oversimplifying things, my main point here is, I didn't really put together how much of early 20th century American manufacturing relied on chronically drunk homeless men.
China's advantage is, and always will be, that the costs of labor in US are bloated by a huge amount of overhead for every working resident
In 2023, the BLS reported that benefits alone accounted for about 31% of total compensation, with wages and salaries comprising the remaining 69%. [1] This 31% includes direct costs like health insurance, retirement contributions, and paid leave.
Now in addition, consider employer-paid expenses that are not benefits or employee compensation: FICA, FUTA, SUID, SDI, FMLA, etc. That depends on your geography, but it can be up to 25-40% additional costs [2]
The all-in cost is at least 35% or more in additional spend [3]
In addition, none of the above capture indirect costs of compliance/overhead, with varied state and federal schemes.
As you can see, we are at a range of ~35-50% of additional costs for each new hire
Now, importantly, try to imagine the effect of this bloat at a national level: Every US business is effectively carrying deadweight of additional ~35-50% costs on its pricing decisions to its customers. Why? Because the bloat is embedded into every domestic input, like raw materials, services, utilities, you name it. This cost spike may impact a few foreign industries dependent on US inputs, but it certainly explodes over US shores, spiking prices of the inputs that most US producers depend for their final goods and services. Now think of what happens to domestic costs of doing business and operating a physical business in US.
So when your cost of production have additional ~35-50% overhead because of all sort of market-distorting mechanisms, blaming china for "cheap labor" is a convenient scapegoat, when in reality the blame should be on US policy of making our jobs artificially expensive.... to fund the state bloat.
Some of it is China’s willingness to make big capital investments. My wife was shocked at the low price of beech mushrooms at Ren’s Market and I found out these are grown in a huge factory in China where they are very proud that they only have to handle the mushrooms with a forklift. Contrast that to those white button Agricus mushrooms each of which is cut out from the mycelium individually with a knife.
When you look at solar panels and lithium batteries their biggest advantage is that they invest in large scale heavily automated factories. For really labor intensive and low value things like those dog beds Chinese labor is already too expensive and production is going to places like Bangladesh.
Perhaps the answer is a combination of a significant UBI (paid for by general federal spending, I could think of many worse reasons to accrue national debt) coupled with a much lower minimum wage? Incentivize companies not to treat labor as a cost sink, while still ensuring that people have enough capital to cover their cost of living. I'd wager productivity would also go up (and mental depression would go down) if things weren't quite as dire as they currently are.
In China it is naturally cheap, they have humongous super advanced vertical and horizontal supply chains at their doorstep.
Need plentiful, cheap three phase electricity? - check. Need some obscure part at scale and immediately?- check. Need advanced engineering? - check. etc. etc.
It's at the point where for many industries the risk/reward just do not make any sense at all (it'll just be loss making no matter how you spin it, government supports etc).
Want to build electronics? You'll need a variety of parts and raw materials that China and its surrounding countries produce, and the US doesn't*.
Want to make clothing? You'll need many different fabrics, buttons, zippers, dyes, etc that China and its surrounding countries produce, and the US doesn't*.
Want to make toys? You'll need plastics, dyes, injection-molding processes, etc that China and its surrounding countries produce or provide, and the US doesn't*.
And this goes all the way back to the mining, the farming, and the refining. The US just doesn't do these things*, even in the cases where we actually have the natural resources here.
This is all way before you even get to the point of engaging with China's skilled manufacturing workforce. (Because yes: these jobs do require skills; you can't just walk in off the street with zero prior experience or training and be correctly assembling widgets or sewing garments within the hour.)
* To counter pedants: Yes, the US may produce some small amounts of some of these things. But we don't produce them at anything like the scale required to ramp up full-on mass production of anything that relies on them to supply the demand of the entire country.
This take and the article get it utterly wrong. The ONLY real headline is,
"Americans have gotten so used to free money they can no longer even imagine producing anything and selling it at a reasonable price".
I'm a small farmer and can sell my garlic all day for $1 a bulb. But it's A LOT of work. If I bump the price to $5 less people buy but that doesn't mean I get to give up and say, "oh well, can't produce in America I guess... "
It's more than that, we've simultaneously allowed for monopolization and rollup of wholesale markets. So in context of the story, the US manufacturer is in a squeeze play between supply cost escalations through the Trump tax regime, and the on the demand side with the big retailers like Kroger and Walmart.
The "made in USA" stuff is bullshit, the policy people DNGAF. The people actually making stuff are screwed. This about about shifting taxation from income and capital gains to consumption.
Turns out China buys Iranian oil, China makes cheap products out of this oil. China builds lots of new cheap coal plants, west fades theirs out but moves part of their production to China.. etc.
Use of coal in Chinese energy production is not growing, peaked in 2013 according to their stats. They are also building massive solar and nuclear capacity.
But anyway, half of all global coal production is consumed in China. I hope they will manage to get rid of coal in the next 20 years.
It's not just cheap labor. It's labor that is abused, sometimes enslaved.
It's also lack of environmental regulation adherence. China has environmental regulations but they don't always demand compliance. I read about companies paying for scrubbers to be installed in factories and when a team comes to take a tour, still with original filters and low run hours.
Maybe 20 years ago? Wages are rising salaries and employers are playing nice so their employees don't jump ship elsewhere. The day of your employer keeping your ID card captive is long gone (unless you are a naked official).
> China has environmental regulations but they don't always demand compliance.
That was also a lot more common 20 years ago than today. These days, cities/provinces are held accountable for AQI reductions, so pretend inspections no longer help their metrics. But I totally get it, there is a lot of material from 2000 to 2015 or so, and they basically live forever on the internet.
Counterpoint: cost of living is ridiculously cheaper in China vs. USA. Workers can be paid 3x less and still have a better QoL. It's a vastly more efficient economy in terms of human capital.
Counterpoint: China is the undisputed leader in renewable energy technology, including battery storage. I don't think they are doing it purely for environmental reasons, but they are doing it.
> China's advantage is always communicated as cheap labor but it's also the ability to almost infinitely scale production lines in a short period of time. America has mostly lost the muscle memory and tooling to do this.
...
>There are incentives that would benefit domestic producers and companies but those take time and don't make good soundbites for politicians.
I heard a very compelling argument (at least to me), that the difference, as you say, isn't the labor. The labor cost difference is something like 5% in the China vs 8% in the US. The difference is ramp up time. If you have a product ready to be built, you can get it to market much faster manufacturing in China than the US.
As an example, the Tesla Gigafactory in Nevada took about 2 years (June 2014-July 2015)[1]
Tesla Gigafactory in China took 168 days to construct (January 2019-October 2019)[1]
The cost of the factory construction, materials and labor, isn't the biggest loss when deciding where to build your factory. The biggest cost is the opportunity cost of not manufacturing your product for 15 months and the potential of losing any first to market advantage if you have competition.
The time to get your product to market, especially if you're a new company with no income operating on investor money, the time spent trying to manufacture in the US can sink your company. The cost difference is much more manageable and, depending of the product, can often times be overcome by the price of shipping.
There's an attitude shift, too. US manufacturing is stuck in the past. If you want to build a widget, you want it finished, welded assembled and painted. you've got to do a bunch of work and take it to four different places before you're done. China's got a one stop shop attitude to get your widget made.
https://www.tiktok.com/t/ZTjEVB5p2/
I don't know if you're wrong in general, but your dates for the factory construction show 9 months in China vs 13 months in the US, not the 5 months vs two years you claim.
My family runs a small plastic (injection molding) business in the USA. Second, soon to be third generation.
The only reason it still exists is because the products made are too expensive to ship from a country with cheaper labor as they are pretty large and heavy. And it's quite a niche product/vertical.
The biggest problem that the business faces on a day-to-day basis is employees. It's a very low skill manufacturing job. You pull parts out of the mold. The pay is good for a large midwestern MCOL city, plus full health benefits (employees don't pay a cent). It is downright impossible to find and retain reliable employees. The job sucks. I worked there when I was younger helping out and you do the same thing every minute for 8 hours a day in a hot and loud factory. It's not a career - just a job. I'm not sure how you fix that. The American appetite for a low skill manufacturing job is dead - I'm not sure it's a bad thing either.
Even the high skill stuff has already been taken over by China, their process is far more efficient. When the business needs design/tool & die for a new plastic injection mold costs and speed associated with getting that mold designed and made in America are astronomical compared to the Chinese. The Chinese will get back to you with a design proof in 24 hours at a 1/4 of the cost.
If you can't get employees you're not paying enough. What you think you should pay employees is irrelevant, the market defines what "good pay" is. If potential employees have better opportunities you won't be able to hire them unless you make your jobs more appealing than others.
You would think it would be that black and white, and under normal circumstances I would tend to agree, however pay is well above average for the location and skill especially when you factor in the benefit package.
I really think it comes down to the fact that people have no interest in working in low skill manufacturing. The business loses people to Walmart etc. where they get lower pay and no benefits all the time. There is more variety of work and potential for advancement at a company like Walmart. Even at a larger scale low skill manufacturing plant advancement is sparse.
So you see the problem. Americans wont work these types of jobs at wages that allow businesses to compete with China. Businesses are in a competition. When they raise wages they need to raise prices and they cant do that when competition is knocking at the door.
> The American appetite for a low skill manufacturing job is dead - I'm not sure it's a bad thing either.
It probably isn't a bad thing, as long as we continue to invest in automation and high-skill manufacturing. The Economist wrote about this recently: the fantasy of "low-skill factory jobs for all" is just that, a fantasy: https://archive.is/YoMs1
They have toyed around with automation but the capital required to retrofit for such a small business would be intensive but is coming down.
Interestingly the automation pieces that they have been testing (multi-axis robot arms) have only became cost effective since the Chinese robots entered the market. The Chinese have completely dropped the floor on automation tooling.
Sounds like the employer has created its own problems.
If an employee is doing an unpleasant, dead-end job with no prospect of advancement, they have to make a value judgment. If there's no prospect of advancement or any kind of wage growth (they're "low skill", so they'll be replaced if someone cheaper comes along), let alone security, then why stick around?
If the working conditions (e.g. heat and noise) are unpleasant, they could be improved. A ramp into other positions could be built to make the "job" an entry point to a "career" (e.g. Costco moves people between many different low skill jobs and then recruits from that pool for management).
>If an employee is doing an unpleasant, dead-end job with no prospect of advancement, they have to make a value judgment. If there's no prospect of advancement or any kind of wage growth (they're "low skill", so they'll be replaced if someone cheaper comes along), let alone security, then why stick around?
Exactly my point, and that's what they are doing.
There is no prospect of advancement possible. It's a small operation with 15 or so total employees. Under normal circumstances I would agree on a much larger scale.
The majority of people are not suitable for management, and do not advance in "careers". Most people just work the same job over and over, until the retire or die.
But the cost of everything has got out of hand. Why bother going to work if you're going to be basically homeless anyway? Housing+food+health care has detached significantly from wages and the costs of other goods.
You fix that by automating the repetitive tasks. So one employee can oversee several machines and primarily handle edge cases. A lot of tooling that was impossible or outrageously expensive before is affordable now. I support some food manufactures that use machine vision based industrial automation and QC.
If you’re having trouble retaining employees because they’re bored of pulling parts out of a mold - have any of them considered having a crack at automating that specific bit of the job with say (and yes this is going to sound naive) a programmable robot?
There will be versions of the machine that automate more of the process. But they will cost money and require maintenance too look after and adjust.
I used to work a similar job[1] at a plastics factory. We had about 12 machines in the area I worked. Some machines automated remove stuff from the mold, some removing the excess, some putting though the leak tester. Each stage of automation was an additional thing that had to be configured and adjusted.
Often we'd only make an item for a shift or two. At one point the company bought a new machine (the size of a 2 car garage) that automated some more bits. The machine took 18 months of adjusting before it worked reliably.
[1] Blowmold, ranging from 750ml bottles, 5-20 litre jerry cans, sections of culvert pipe.
The work on your line might "suck" but it is a good paying job with free benefits and requires no college degree, special trade school, or certification.
There are plenty of poorly qualified, undereducated Americans who can fill these low skill jobs.
There is nothing to fix. It is a job. It pays money. Not everyone has the ability to excel in a "career." They simply need a job.
And, no one can compete with China. All companies operating in China, regardless of ownership (state-owned, private, or foreign-owned), are subject to the same political influence. If the government tells a company to do something, the company does it. China also manipulates its currency as a means to drive its predominantly export-oriented economy.
Then tell me where these poorly qualified, undereducated Americans who can fill these low skill jobs are?
The business's biggest success with finding employees was getting in the good graces of the local probation officers who refer ex-cons to us, and that comes with its own set of problems.
Other than paying a premium for temps at a temp agency that's been the only way as of the last 5-10 years to get employees in the door. Normal applications are crickets.
So, if retailers are resisting raising prices, who will pay the increased costs? Domestically sourced goods can be no more than 55% more expensive (otherwise the imported goods would be cheaper), but we can be sure that locally sourced goods will be priced as close to the full 55% as possible (and as the article points out, some locally manufactured items are probably never going to be less than the overseas cost, even including the tariff tax.)
Now take a look at Walmart's margins https://www.macrotrends.net/stocks/charts/WMT/walmart/profit.... Their gross margin is ~25%, with a net around 2%. Even if Walmart decides to eat the tariff cost out of patriotic duty, anywhere near a ~50% hit to supply chain costs would put them out of business. Heck, even a few percent would require a huge business restructuring, if it were even possible.
So prices are going to be higher - it's a given. In the short-medium term, the tariff tax is simply a large regressive transfer of tax obligation onto consumers.
I think Walmart is too big to fail at this point. If the gold standard for brick and mortar 'low prices' needs some restructuring, then it's time for the house of straw economy to finally see the big bad wolf and go running for the hills.
Walmart will just raise prices and their customers will eat the increased prices through reduced purchasing power or going without, while complaining but doing nothing else (because they have no leverage to do otherwise).
What immediately sprung out to me is that Amazon isn't held accountable for selling goods that directly violate patent laws, which should protect small business and reward innovation.
The current US administration claims to be concerned about domestic manufacturing and so on, but hasn't even mentioned this issue at all.
I was going to manufacture a line of useful products here in the USA, but decided against it. I'd release the product, then a month later counterfeits would be on Amazon for 10% of the price.
As a small operation, there are 0 affordable resources at my disposal to fight IP theft.
> What immediately sprung out to me is that Amazon isn't held accountable for selling goods that directly violate patent laws, which should protect small business and reward innovation.
(IANAL) This may fall under a DCMA-like concept where sites are not responsible for 'user content'. The 'user' in question is the vendor and their 'profile' of sellable items is the content. Similar to how eBay is not (?) responsible for the items put up for sale.
(Not saying this is (morally) right, just describing the situation. I would really like to see some accountability as well.)
As far as I can tell, consumers have never benefited from patents, and they seem blatantly anti-competitive. Perhaps if only "small business" (whatever that actually denotes) were allowed to hold them it might make sense, but we all know that's not even remotely how patents are wielded today.
Personally I strongly prefer knockoffs. Same quality, but cheaper.
I watched this and my cynical takeaway was he was trying to make an appeal to emotion. Why buy from China when we can support the good people of Alabama? Their elected senator just called me a rat. Why should I support Alabama over China? They both seem like foreign adversaries to me. At least China is making a sincere effort to reduce their carbon emissions.
I thought it was a good video, but similarly I had an issue with how he discussed the loss of the skilled trades and professions in the US. He did a good job highlighting that these jobs are rare, don't pay well and are important, but he made it seem like we all just accidentally stopped investing in local manufacturing, or that we just let those skills erode. Leaders at these manufacturing companies moved things over seas, laid off the skilled workers, busted up unions, and overall sold off this skill set in order to sell cheaper products and make more money for themselves.
> Why buy from China when we can support the good people of Alabama? Their elected senator just called me a rat. Why should I support Alabama over China?
He just happens to be in Alabama, but the principle applies to someone in Massachusetts or Hawaii as well.
There was a book making the rounds recently that also details some of the discussion around skills being the thing the west exported: https://appleinchina.com/
The author readily admits in a podcast that while Apple plays a big part in the story it's a clickbait title because no one would buy a book titled something along the lines of "supply chains and China."
It's an interesting video, on the other hand it's also 80$ a piece. And I'm pretty sure they do not recoup R&D with those prices on reasonable compensation rates...
One of the main issues they raise is that the bristles on common brushes can be left behind and are difficult to pick out of food, so the wet rag probably exceeds expectations in that way.
I was about to link the same thing - excellent video. It was very insightful and a bit scary to see just how hard it was to get seemingly simple manufacturing done in the US now.
As recently as the 1980s, 70% of domestic clothing was made in the U.S., including by brands like Gap and JC Penny. Did Americans have an impoverished standard of living in the 1980s? Is the cheap, disposable, foreign made “fast fashion” we have today better?
If you watch [this Climate Town video](https://www.youtube.com/watch?v=8CkgCYPe68Q), then absolutely not, the disposable fast fashion we have today is not better. It's cheaper, but it's not higher quality, it requires trans-continental shipping, and it absolutely gets thrown away in ridiculous amounts.
Overall, it's worse in just about every metric other than "I can get this fun shirt online at 2am for $6."
Yes, if you forced 2025 americans to live like americans did in the 1980s there would be mass riots. Quality of life has gone up signicantly in many ways.
> Did Americans have an impoverished standard of living in the 1980s (compared to now)?
Nope.
I had plenty of hand me downs, but the majority of stuff I owned lasted for years and years, and I beat TF out of my clothes; so getting three or four years out of a pair of jeans was an achievement. I remember being constantly upset with my parents because when I would ask to get something new, they would tell me I had to wear out the stuff I already had first.
So at the time, paying more for a pair of Levi's or Nike's were worth it because they were built to last for years, not months like they are now. I was in college during the late 90's and even then I had three pairs of shoes that lasted my entire 4 years in college.
Back then stuff was durable and was meant to last for years. The "fast fashion" and "disposable fashion" trends essentially ended monopolies that brands had because kids weren't wearing stuff for more than a few months before discarding it or having it fall apart so they can wear the latest thing.
This is an answerable question: the median American household allocates 2-3% less of its household income to clothing in 2025 than it did in the 1980s. That's about $2000, for the median household.
But now both adults need to work to afford a detached house, and the labour participation rate of middle aged men is at an all time low. So, the answer is probably no. I'm sure lots of people would pay and extra $2k for clothing if housing, food, health care, and cars were at similar ratio to wages from the 1980s.
The textile industry in the US was synonymous with worker abuse and sweatshop conditions. The Triangle Shirtwaist fire is the canonical example. Heavily dependent on immigrant labor.
Well into the 1990s, we made shirts and canned soup in Oregon, a place that had very few immigrants at the time. My wife's dad's family came here before the American revolution and he worked at a Heinz soup plant until NAFTA.
Today it's also the desire of the customers, as pushed by social media, to follow a fashion changing almost every month. You didn't buy in the 80s stuff to be obsoleted in a few months. And because most of the people cannot afford every few months a new wardrobe made of (halfway) quality items, today's taste requires fast fashion garbage. So here we are, and we can get back to sanity only when we get rid of the influencer-led economy, good luck with that.
I'm amazed how much of the internet economy has turned out to be advertising. People complain about ads when they watch TV, but they'll go out of their way to spend hours watching ads on social media. And lots of kids dream about being an influencer, basically an advertiser, for their work.
> the desire of the customers, as pushed by social media, to follow a fashion changing almost every month
A lot of it is top down, pushed onto customers by the industry. It's very hard to find timeless classics these days, we are given trendy bits that change every year to speed up obsolescence so they purposely look kitschy.
The desire of costumers is to go well beyond psychotic measures in order to save the tiniest amount of money on a purchase, rather than purchase domestic or locally produced for a bit more expensive. And that applies almost worldwide, not only to Americans.
>Did Americans have an impoverished standard of living in the 1980s?
Yes. Ask some of your older relatives who remember that time how often they got hand-me-downs or patched old clothes up and compare it to the wardrobe of an average income American today.
This is not evidence for what you are saying. Handing down stuff, including clothes doesn't equate to poverty, sometimes the opposite. Better clothes also last longer. Check out the Sam Vimes theory of socioeconomic unfairness. To take this a little literally, for much of my young adulthood, I wore my dad's old snow boots, not because I was poor, but because they were too well made, even at an old age, not to use.
Choosing to buy more, cheaper, clothes is as much an example of consumerism, as anything else.
That's not impoverished; it's just not wasteful. Half my kids' clothes are from Once Upon A Child, and most of my younger one's are hand-me-downs from the older one. For that matter, I'm wearing 20 year old gym shorts right now.
Hand-me-downs are great. My youngest has some hand-me-downs he got from his older brother who got them from my neighbor’s son. Your kids don’t need new clothes.
There is a mattress company called Tuft and Needle. They started right at the early beginning of the mattress-in-a-box trend, but offered a unique product. For the first six months of operation, they made a Japanese-inspired cotton mattress filled with wool batting and was made in the USA. Before I had a chance to order one though, they had already pivoted away from that unique product (that doesn’t exist even today) and were dropshipping the same generic PU foam mattresses made in China as everyone else, with very little change to their website even. I was sad
T&N has such a great product but it was one of those things that failed because the innovation/disruption had no market.
I personally believe that the Japanese futon mat is the healthiest way to sleep, and after you get used to it even extra-firm mattresses are soupy and uncomfortable. Downside though is that it is very difficult to be comfortable on if you are significantly overweight, and it’s a pretty hard sell for couples unless they are both bought into the idea beforehand.
From my personal experience of sleeping on one for the last decade, not having a bed with a mattress on it is beyond the pale. I have a nice townhome that is well decorated. But when people see my bed, they assume I have a health issue, some kind of homelessness trauma, I’m a weeb (definitely not), or that I’m too poor to own a bed. They assume that they could never be comfortable on it, as a pillowy mattress on a high frame is associated in people’s minds with high luxury, angels with harps, royalty, and sexual intrigue. Sleeping on a mat on the floor is associated with camping, homelessness, destitution, and failure.
I think not only has manufacturing gone away, as well as the supply chain, but also choice. The moment you want something slightly different than what is sold in the typical big box stores, it's either non-existent, or costs a fortune.
We bought one and it lasted almost exactly 10 years. When it came time to replace it, I was also sad to discover that it was a short-lived item and they moved on to something else. We ended up going with Sleep Number because that was the firmest mattress I could find delivered to me in a reasonable amount of time.
I have. Definitely one of the better options out there. I recently got a mygreenmattress which are latex and made in Chicago. Still would like a wool one.
Everyone already knows this but the mattress industry is absurdly opaque and most reviews are fake
Textile manufacturing is the absolute bottom of the barrel. The town I grew up in (Manchester, NH) had the largest textile plant at the beginning of WWI but it was out of business by 1933. The industry moved first to the American South and by the time they'd paid the loans of the factories it moved again overseas.
Textiles are something that we cannot automate with current technology. We know how to automate plastics and metals. You can buy off the shelf injection molding machines (3d printers too, but they are rarely used in production). You can buy off the shelf machines to cut and form metals. Even things like steel mills are automated with custom equipment. But sewing two pieces of cloth together is beyond current automation, and thus there is a lot of manual labor.
In the US (and Europe) manual labor is expensive, so to make something you need a lot of automation. Once it is automated the next step is enough volume to pay for the automation (which needs expensive engineers).
Of course maybe this will change. Basic textiles were one of the first things we automated 300+ years ago, but we are only able to go from a bunch of cotton to a bolt of fabric today. As I write this making a shirt (or dog bed as this story) seems beyond what we can automate. Maybe a little investment will fix that, maybe not. I'm not an automation engineer so I can't tell you how solvable the problems are.
It's possibly already changing? 3D-knitting (of shoe uppers is what I have noticed) can make some sewing redundant. How far that can be taken remains to be seen.
Textile manufacturing is basically just a derivative of electricity and labor costs. There isn't much more too it, and per sq meter, it's extremely cheap to ship product around the world.
Textile mills in Bangladesh are able to pay $0.025 US cents per kwh, and factory laborers can be employed for about $150 a month. From their main port to the US west coast, when sent by container ship, costs about $0.10 per sq m. There is no universe where anyone else can compete. It's not within America's comparative advantage anymore.
It's wild to me how this movement wants to bring back all of the lowest paid, least value add, lowest skill jobs back but is totally ok with shipping highly paid, highest value add, highest skill jobs off to India. I understand that it's all a grift, the marks only care about the former jobs, and those jobs are never actually coming back, but still.
There are countries besides USA and China. It was just terrible geopolitics decision for US to depend on 1 country for imports instead of keeping the power balance between countries of the world.
While true, that know-how is misleading. There is a lot of know-how in the US - the US makes more than every before, which means the know-how is still here! It is just focused on the things we already make and do well on, so often you can't get at it.
I have to assume it wasn't a concerted effort to depend mostly on China for imports. Companies are each making the best financial decision for themselves and China turned out to be the more competitive option most of the them.
What we see is exactly what Uber and Lyft effectively did. China subsidized manufacturing at the cost of their citizens, but in doing so destroyed much of the competition, giving them a monopoly like position in industrial manufacturing cemented by a mastery of economies of scale, which can now be used to exert global power.
Any country which did not abuse their citizens or subsidize their businesses became noncompetitive.
And why would you use old school taxis when uber/lyft were offering $5 rides in a 7x7mile area, and how could old taxi companies compete when they are forced to compete with people not bound by market forces?
Right, that's the difference between a centralised economy and a free market. These thin-vieled calls for a centralised, planned economy (people of my generation had another word for it) are getting more common and in more places.
You have missed something: It's not feasible to compete with China on price and availability, compared to any other country. Challenge: Try designing something, and figuring out how to get the parts. Or, try to have a custom circuit board made. You will find the difficulty goes way up for countries that aren't China.
If that isn't enough, imagine you are choosing Hard mode by sourcing non-China, and your competition chose Easy mode.
Mexico has been cheaper for a while now. My understanding is that shipping from China was subsidized somehow and that's a big part of why it's still cheaper overall.
Readit News
There are incentives that would benefit domestic producers and companies but those take time and don't make good soundbites for politicians.
The blunt tariff sledgehammer that was dropped isn't going to do it. Small experiments like the one in the article will try and mostly fail. Meanwhile producers will find loopholes and workarounds to tariffs. And the margins and viability of domestic designers and businesses will continue to weaken.
Consumers will increasingly eat the cost and lose the convenience.
What we want is wood shop and machine shop classes.
This is just one example among many. The truth is every single facet of industrial production is incredibly complex and there does not exist a single video game that captures all the nuance. Period. Factorio abstracted away all the boring details of industrial production and that is why it is good entertainment. But it’s still just entertainment. To think someone would become knowledge about industrial production because he played Factorio is like thinking someone is a good driver because he played Mario Kart.
That just cuts out a layer in the distribution chain. The part you want is probably manufactured not too far away.
The US used to have manufacturing cities where you could get everything you needed in specific industries. There was the New York City garment district for clothes. Mary Quant, inventor of the miniskirt, writes in her autobiography, "Quant by Quant", about her first visit to New York with a native guide. She was getting things set up for manufacturing in days instead of the months it took in the UK.
Detroit had cars, of course. Most of the auto parts suppliers were nearby. Now, the US auto industry is very spread out. "Trenton Makes, the World Takes" is still on a huge sign in Trenton, NJ., but it's more nostalgia then reality. Waterbury, Connecticut had watch manufacturers and other mechanical precision devices.
Those centers of industry are mostly gone. Even Hollywood is in troublel
And that's why I don't really foresee that kind of manufacturing coming back here. In order to survive the race-to-the-bottom pricing that the majority of Americans crave, you need a large labor force that will accept some form of sub-par living conditions. But if you can't earn a living wage, you can't afford to participate in the economy in a way that supports the manufacturing, and then you're back to those mid-century slums.
I'm dramatically oversimplifying things, my main point here is, I didn't really put together how much of early 20th century American manufacturing relied on chronically drunk homeless men.
China's advantage is, and always will be, that the costs of labor in US are bloated by a huge amount of overhead for every working resident
In 2023, the BLS reported that benefits alone accounted for about 31% of total compensation, with wages and salaries comprising the remaining 69%. [1] This 31% includes direct costs like health insurance, retirement contributions, and paid leave.
Now in addition, consider employer-paid expenses that are not benefits or employee compensation: FICA, FUTA, SUID, SDI, FMLA, etc. That depends on your geography, but it can be up to 25-40% additional costs [2]
The all-in cost is at least 35% or more in additional spend [3]
In addition, none of the above capture indirect costs of compliance/overhead, with varied state and federal schemes.
As you can see, we are at a range of ~35-50% of additional costs for each new hire
Now, importantly, try to imagine the effect of this bloat at a national level: Every US business is effectively carrying deadweight of additional ~35-50% costs on its pricing decisions to its customers. Why? Because the bloat is embedded into every domestic input, like raw materials, services, utilities, you name it. This cost spike may impact a few foreign industries dependent on US inputs, but it certainly explodes over US shores, spiking prices of the inputs that most US producers depend for their final goods and services. Now think of what happens to domestic costs of doing business and operating a physical business in US.
So when your cost of production have additional ~35-50% overhead because of all sort of market-distorting mechanisms, blaming china for "cheap labor" is a convenient scapegoat, when in reality the blame should be on US policy of making our jobs artificially expensive.... to fund the state bloat.
[1] https://www.bluedotcorp.com/blog/2023-trend-the-rising-price...
[2] https://www.sba.gov/blog/how-much-does-employee-cost-you
[3] https://www.footholdamerica.com/blog/what-is-the-real-cost-o...
The good news is that they’re building one here
https://finc-sh.com/tag/new/
When you look at solar panels and lithium batteries their biggest advantage is that they invest in large scale heavily automated factories. For really labor intensive and low value things like those dog beds Chinese labor is already too expensive and production is going to places like Bangladesh.
In China it is naturally cheap, they have humongous super advanced vertical and horizontal supply chains at their doorstep.
Need plentiful, cheap three phase electricity? - check. Need some obscure part at scale and immediately?- check. Need advanced engineering? - check. etc. etc.
It's at the point where for many industries the risk/reward just do not make any sense at all (it'll just be loss making no matter how you spin it, government supports etc).
Who pays for all that stuff in China?
It's the supply chains.
Want to build electronics? You'll need a variety of parts and raw materials that China and its surrounding countries produce, and the US doesn't*.
Want to make clothing? You'll need many different fabrics, buttons, zippers, dyes, etc that China and its surrounding countries produce, and the US doesn't*.
Want to make toys? You'll need plastics, dyes, injection-molding processes, etc that China and its surrounding countries produce or provide, and the US doesn't*.
And this goes all the way back to the mining, the farming, and the refining. The US just doesn't do these things*, even in the cases where we actually have the natural resources here.
This is all way before you even get to the point of engaging with China's skilled manufacturing workforce. (Because yes: these jobs do require skills; you can't just walk in off the street with zero prior experience or training and be correctly assembling widgets or sewing garments within the hour.)
* To counter pedants: Yes, the US may produce some small amounts of some of these things. But we don't produce them at anything like the scale required to ramp up full-on mass production of anything that relies on them to supply the demand of the entire country.
I'm a small farmer and can sell my garlic all day for $1 a bulb. But it's A LOT of work. If I bump the price to $5 less people buy but that doesn't mean I get to give up and say, "oh well, can't produce in America I guess... "
Lol, Americans :(
The "made in USA" stuff is bullshit, the policy people DNGAF. The people actually making stuff are screwed. This about about shifting taxation from income and capital gains to consumption.
But companies have been incentivized to offshore production for decades. In many cases policy decisions have immensely rewarded them for doing so.
The end result is those countries (mainly China) have grown into infinite scaling machines. It probably won't unwind any time soon.
But anyway, half of all global coal production is consumed in China. I hope they will manage to get rid of coal in the next 20 years.
It's also lack of environmental regulation adherence. China has environmental regulations but they don't always demand compliance. I read about companies paying for scrubbers to be installed in factories and when a team comes to take a tour, still with original filters and low run hours.
Maybe 20 years ago? Wages are rising salaries and employers are playing nice so their employees don't jump ship elsewhere. The day of your employer keeping your ID card captive is long gone (unless you are a naked official).
> China has environmental regulations but they don't always demand compliance.
That was also a lot more common 20 years ago than today. These days, cities/provinces are held accountable for AQI reductions, so pretend inspections no longer help their metrics. But I totally get it, there is a lot of material from 2000 to 2015 or so, and they basically live forever on the internet.
While China does have an advantage over northern states in labor prices it's not why it's so cheap.
Counterpoint: China is the undisputed leader in renewable energy technology, including battery storage. I don't think they are doing it purely for environmental reasons, but they are doing it.
Sounds like average American gig worker.
...
>There are incentives that would benefit domestic producers and companies but those take time and don't make good soundbites for politicians.
I heard a very compelling argument (at least to me), that the difference, as you say, isn't the labor. The labor cost difference is something like 5% in the China vs 8% in the US. The difference is ramp up time. If you have a product ready to be built, you can get it to market much faster manufacturing in China than the US.
As an example, the Tesla Gigafactory in Nevada took about 2 years (June 2014-July 2015)[1]
Tesla Gigafactory in China took 168 days to construct (January 2019-October 2019)[1]
The cost of the factory construction, materials and labor, isn't the biggest loss when deciding where to build your factory. The biggest cost is the opportunity cost of not manufacturing your product for 15 months and the potential of losing any first to market advantage if you have competition.
The time to get your product to market, especially if you're a new company with no income operating on investor money, the time spent trying to manufacture in the US can sink your company. The cost difference is much more manageable and, depending of the product, can often times be overcome by the price of shipping.
[1] https://manufacturingdigital.com/digital-factory/timeline-te...
Those percentages don't make sense to me. 5% and 8% of what? Final assembly? Labor costs are also built into all material costs in the supply chain.
You won't get made in the USA as unless you're determined to have subclasses of citizens.
The only reason it still exists is because the products made are too expensive to ship from a country with cheaper labor as they are pretty large and heavy. And it's quite a niche product/vertical.
The biggest problem that the business faces on a day-to-day basis is employees. It's a very low skill manufacturing job. You pull parts out of the mold. The pay is good for a large midwestern MCOL city, plus full health benefits (employees don't pay a cent). It is downright impossible to find and retain reliable employees. The job sucks. I worked there when I was younger helping out and you do the same thing every minute for 8 hours a day in a hot and loud factory. It's not a career - just a job. I'm not sure how you fix that. The American appetite for a low skill manufacturing job is dead - I'm not sure it's a bad thing either.
Even the high skill stuff has already been taken over by China, their process is far more efficient. When the business needs design/tool & die for a new plastic injection mold costs and speed associated with getting that mold designed and made in America are astronomical compared to the Chinese. The Chinese will get back to you with a design proof in 24 hours at a 1/4 of the cost.
I really think it comes down to the fact that people have no interest in working in low skill manufacturing. The business loses people to Walmart etc. where they get lower pay and no benefits all the time. There is more variety of work and potential for advancement at a company like Walmart. Even at a larger scale low skill manufacturing plant advancement is sparse.
And they say they can get employees, as pay is decent for low skilled job.
It probably isn't a bad thing, as long as we continue to invest in automation and high-skill manufacturing. The Economist wrote about this recently: the fantasy of "low-skill factory jobs for all" is just that, a fantasy: https://archive.is/YoMs1
They have toyed around with automation but the capital required to retrofit for such a small business would be intensive but is coming down.
Interestingly the automation pieces that they have been testing (multi-axis robot arms) have only became cost effective since the Chinese robots entered the market. The Chinese have completely dropped the floor on automation tooling.
If an employee is doing an unpleasant, dead-end job with no prospect of advancement, they have to make a value judgment. If there's no prospect of advancement or any kind of wage growth (they're "low skill", so they'll be replaced if someone cheaper comes along), let alone security, then why stick around?
If the working conditions (e.g. heat and noise) are unpleasant, they could be improved. A ramp into other positions could be built to make the "job" an entry point to a "career" (e.g. Costco moves people between many different low skill jobs and then recruits from that pool for management).
Exactly my point, and that's what they are doing.
There is no prospect of advancement possible. It's a small operation with 15 or so total employees. Under normal circumstances I would agree on a much larger scale.
But the cost of everything has got out of hand. Why bother going to work if you're going to be basically homeless anyway? Housing+food+health care has detached significantly from wages and the costs of other goods.
This particular issue could be solved by producing in Mexico and trucking your product into the US.
Could be something they try out of hours.
I used to work a similar job[1] at a plastics factory. We had about 12 machines in the area I worked. Some machines automated remove stuff from the mold, some removing the excess, some putting though the leak tester. Each stage of automation was an additional thing that had to be configured and adjusted.
Often we'd only make an item for a shift or two. At one point the company bought a new machine (the size of a 2 car garage) that automated some more bits. The machine took 18 months of adjusting before it worked reliably.
[1] Blowmold, ranging from 750ml bottles, 5-20 litre jerry cans, sections of culvert pipe.
Sounds like a robot should do it.
There are plenty of poorly qualified, undereducated Americans who can fill these low skill jobs.
There is nothing to fix. It is a job. It pays money. Not everyone has the ability to excel in a "career." They simply need a job.
And, no one can compete with China. All companies operating in China, regardless of ownership (state-owned, private, or foreign-owned), are subject to the same political influence. If the government tells a company to do something, the company does it. China also manipulates its currency as a means to drive its predominantly export-oriented economy.
The business's biggest success with finding employees was getting in the good graces of the local probation officers who refer ex-cons to us, and that comes with its own set of problems.
Other than paying a premium for temps at a temp agency that's been the only way as of the last 5-10 years to get employees in the door. Normal applications are crickets.
Now take a look at Walmart's margins https://www.macrotrends.net/stocks/charts/WMT/walmart/profit.... Their gross margin is ~25%, with a net around 2%. Even if Walmart decides to eat the tariff cost out of patriotic duty, anywhere near a ~50% hit to supply chain costs would put them out of business. Heck, even a few percent would require a huge business restructuring, if it were even possible.
So prices are going to be higher - it's a given. In the short-medium term, the tariff tax is simply a large regressive transfer of tax obligation onto consumers.
Dead Comment
https://www.businessinsider.com/walmart-price-increases-item... | https://archive.today/4Kcqf
He details all the challenges, and it's a pretty good watch.
The grill brush they made is a bit on the expensive side, but I bought one.
https://youtu.be/3ZTGwcHQfLY?si=TP1ez9tIEkpEu1Xf
The current US administration claims to be concerned about domestic manufacturing and so on, but hasn't even mentioned this issue at all.
As a small operation, there are 0 affordable resources at my disposal to fight IP theft.
(IANAL) This may fall under a DCMA-like concept where sites are not responsible for 'user content'. The 'user' in question is the vendor and their 'profile' of sellable items is the content. Similar to how eBay is not (?) responsible for the items put up for sale.
(Not saying this is (morally) right, just describing the situation. I would really like to see some accountability as well.)
Personally I strongly prefer knockoffs. Same quality, but cheaper.
PSA: the si parameter, along with pp, are for tracking purposes. Consider trimming them when doing a copy-paste if possible.
He just happens to be in Alabama, but the principle applies to someone in Massachusetts or Hawaii as well.
There was a book making the rounds recently that also details some of the discussion around skills being the thing the west exported: https://appleinchina.com/
The author readily admits in a podcast that while Apple plays a big part in the story it's a clickbait title because no one would buy a book titled something along the lines of "supply chains and China."
Decent (if superficial) interview here: https://www.youtube.com/watch?v=NAj9zB4vaZc
https://open.spotify.com/episode/5gJazFZZaZ0OGKf516XpeO
Look, I love Destin, watch all his stuff recommend it all the time.
But I'm never going to buy this product, it's just too expensive for what it does compared to the alternatives.
And I know he knows that. He's clearly at least 'not stupid'.
So something isn't squaring with this.
https://www.kqed.org/lowdown/7939/madeinamerica
Overall, it's worse in just about every metric other than "I can get this fun shirt online at 2am for $6."
Absolutely not.
What we have today is the ability to buy/own tons more "stuff", much of which is cheap junk. That does _not_ translate into better quality of life.
Deleted Comment
Nope.
I had plenty of hand me downs, but the majority of stuff I owned lasted for years and years, and I beat TF out of my clothes; so getting three or four years out of a pair of jeans was an achievement. I remember being constantly upset with my parents because when I would ask to get something new, they would tell me I had to wear out the stuff I already had first.
So at the time, paying more for a pair of Levi's or Nike's were worth it because they were built to last for years, not months like they are now. I was in college during the late 90's and even then I had three pairs of shoes that lasted my entire 4 years in college.
Back then stuff was durable and was meant to last for years. The "fast fashion" and "disposable fashion" trends essentially ended monopolies that brands had because kids weren't wearing stuff for more than a few months before discarding it or having it fall apart so they can wear the latest thing.
A lot of it is top down, pushed onto customers by the industry. It's very hard to find timeless classics these days, we are given trendy bits that change every year to speed up obsolescence so they purposely look kitschy.
Yes. Ask some of your older relatives who remember that time how often they got hand-me-downs or patched old clothes up and compare it to the wardrobe of an average income American today.
Choosing to buy more, cheaper, clothes is as much an example of consumerism, as anything else.
https://en.wikipedia.org/wiki/Boots_theory
I think you’re conflating a culture that did not see everything as disposable with a lack of wealth.
The hard stats since I looked them up:
Median income increases by 1/3 in inflation adjusted (“real”) dollars from late 80s until 2020. The country is definitely more wealthy.
https://fred.stlouisfed.org/series/mepainusa672n
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I personally believe that the Japanese futon mat is the healthiest way to sleep, and after you get used to it even extra-firm mattresses are soupy and uncomfortable. Downside though is that it is very difficult to be comfortable on if you are significantly overweight, and it’s a pretty hard sell for couples unless they are both bought into the idea beforehand.
From my personal experience of sleeping on one for the last decade, not having a bed with a mattress on it is beyond the pale. I have a nice townhome that is well decorated. But when people see my bed, they assume I have a health issue, some kind of homelessness trauma, I’m a weeb (definitely not), or that I’m too poor to own a bed. They assume that they could never be comfortable on it, as a pillowy mattress on a high frame is associated in people’s minds with high luxury, angels with harps, royalty, and sexual intrigue. Sleeping on a mat on the floor is associated with camping, homelessness, destitution, and failure.
To each their own I guess
https://nolahsleep.com/pages/about-us
Everyone already knows this but the mattress industry is absurdly opaque and most reviews are fake
In the US (and Europe) manual labor is expensive, so to make something you need a lot of automation. Once it is automated the next step is enough volume to pay for the automation (which needs expensive engineers).
Of course maybe this will change. Basic textiles were one of the first things we automated 300+ years ago, but we are only able to go from a bunch of cotton to a bolt of fabric today. As I write this making a shirt (or dog bed as this story) seems beyond what we can automate. Maybe a little investment will fix that, maybe not. I'm not an automation engineer so I can't tell you how solvable the problems are.
https://www.npr.org/2022/10/22/1130552239/robot-folding-laun...
It's possibly already changing? 3D-knitting (of shoe uppers is what I have noticed) can make some sewing redundant. How far that can be taken remains to be seen.
ah there are already sweaters made using this technology it seems: https://www.oliver-charles.com/pages/3d-knitting
Textile mills in Bangladesh are able to pay $0.025 US cents per kwh, and factory laborers can be employed for about $150 a month. From their main port to the US west coast, when sent by container ship, costs about $0.10 per sq m. There is no universe where anyone else can compete. It's not within America's comparative advantage anymore.
https://youtu.be/L9f5SQQKr5o
Any country which did not abuse their citizens or subsidize their businesses became noncompetitive.
And why would you use old school taxis when uber/lyft were offering $5 rides in a 7x7mile area, and how could old taxi companies compete when they are forced to compete with people not bound by market forces?
If that isn't enough, imagine you are choosing Hard mode by sourcing non-China, and your competition chose Easy mode.
I think Coca Cola might be a counter example if we look at how they procure their sugar.
Irrelevant since the point is to grow US manufacturing, not manufacturing in "countries besides USA and China".