You’ve heard the arguments: American
companies are outsourcing jobs to overseas locations so they can pay cheaper
wages. American companies are moving their operations and headquarters overseas
(“inversion”) so they don’t have to pay U.S. corporate taxes on their profits.
I saw a curious statement by Jeff Immelt,
CEO of General Electric, who said recently that the cost of labor is a tiny
fraction of total production costs in many manufacturing operations.
NewYorker.com says that a couple years
ago Immelt mentioned this: “If you
look at an aircraft engine, the content of labor is probably less than five per
cent. We have two hours of labor in a refrigerator. So it really doesn’t matter
if you make it in Mexico, the U.S., or China.”
TWO HOURS of labor in a refrigerator?!?
One source I checked said the average
cost of a refrigerator is about $1,100—of course, you can spend less or a lot
more.
I’m thinking, now, why does a refrigerator
cost that much if there’s only two hours of labor in it?
I’m thinking, now, I’m gonna need some
help listing all the reasons why anybody in his or her right mind would pay
full list price for a refrigerator, instead of waiting for the “once in a
lifetime” sale that happens every month or so at most of the big appliance
dealers.
Copyright © Richard Carl
Subber 2016 All rights reserved.
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