Wednesday, April 28, 2010

The Daily Show on US-China Trade and Manufacturing

H/T IELP Blog:

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Wham-O Moves to America
Daily Show Full EpisodesPolitical HumorTea Party

I know I'm a total killjoy loser for commenting on this very funny segment, but I can't help it.  There's actually a very good real-world lesson or two in there.  One is why Wham-O is "re-sourcing" its manufacturing from China back to the US and why the company just doesn't establish manufacturing operations in the lowest-cost world labor market - because, contrary to the "race to the bottom" folks, labor costs aren't the only factor that a business considers when deciding where to establish its operations.  They also care about quality, reliability, rule of law, logistics and other things, and thus often decide that it's better to build and invest in the United States than China (or Bangladesh or elsewhere).  This is something that Dan Ikenson and I discussed at length last year (see. p. 14).

Second, Wham-O's experience in China - with its rising labor costs and focus on higher-value manufacturing - is a great, concrete example of a very important dynamic over there and further proof that the whole "race to the bottom" is complete nonsense.

Most importantly, however, the sketch is flat-out hilarious.

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