You will not pay $1000 for a 60 gig disk drive! If you would, then the
manufacturers could build them here. Fully bundled labor cost in Malaysia
is probably in the $3-5 range, was $1.50 in the early 1990's. So, since the
consumer wants the $60 drive retail, the companies are forced to build
overseas. You think that a PR guy for a union pension fund, should make
$100k+? Then you can hire him, but if you could get the same thing for
$20k, would it not be provident to do so for the benefit of the pensioners,
and stockholders?

No, most folks wouldn't pay $1000 for a disk drive. That would amount to
several days' income for a typical American.

Ironically, when we build them overseas and sell them for $60, that price
represents several days' income for the people that built it.

The missing portion of this equation is executive compensation. UP Uranus
Widgets and Gidgets, (for example), traditonally grossed $500mm per year in
sales with a respectable 8% operating net of $40mm. The CEO earned $6mm per
year.

UP Uranus moved manufacturing from Oklahoma to Malaysia, and accounting and
customer service to New Delhi. The decrease in personnel cost improved the
company operating net from $40mm to $110mm, activating an "incentive" clause in
the CEO's contract that increased his pay from $6mm per year to $35mm.
The board of directors voted themselves fat bonuses, dividends went through the
roof, and the stock price advanced sharply. The CEO, the board, and the
stockholders were all delighted.

Somewhat less delighted were the ex-rank and file employees of UP Uranus. Many
had to rely on unemployment insurance, some were forced into an early and
underfunded retirement, and others settled for "underemployed" jobs at a
fraction of their former wages and lost homes, cars,
savings accounts, as a result.

Almost as undelighted were the taxpayers in Oklahoma. UP Uranus discovered that
by forming sub corporations in Malaysia
and India and registering these entities in certain Caribbean nations, there
would no longer be any US federal or local sate taxes paid on the proceeds.
Just when UP Uranus dumped thousands of involuntarily jobless people onto the
doorstep of society, UP Uranus engineered a way to avoid participating in the
social costs associated with the layoff.

That's what is defined as "smart business" by many people whose god is a
greenback
and holy writ is last quarter's financial statement. What the hell, let the
common people eat cake. If they get too desperate, they can sell one of their
Lexus......(surely every family has at least a couple of those, right?)

BUT.....we haven't finsihed casting all the villains in this little scenario.
Throw in another 200 million adults of consuming age and blind them all to any
portion of a purchase decision except price. Have them shop in a business that
is so powerful it collects almost 10-cents out of every retail dollar spent in
the US, and have that business inform its competing suppliers that it *expects*
them to offshore
as many jobs and reduce costs as much as possible so that the company's
200-million customers can buy a new toaster for $10, or a microwave oven for
$39.

Winners: The very rich and the very poor. (Most of the very poor being
overseas). Middle class consumers but only to a point. (Higher unemployment and
greater underemployment depresses wages for all,
meaing that it takes as long or longer to earn that $39 microwave as it did
when the
appliance cost a bit more).

Losers: The middle class overall. Skilled labor, white collar professionals,
and tax revenues. (Sales tax doesn't diminish much when the companies
reorganize offshore, so the portion of the tax burden paid by the consumer,
rather than the corporations, remains relatively high. Transfers the tax burden
to the little people).

Is this a "good" thing or a "bad" thing?
That's up to everybody to decide based on individual values and perspectives.
No doubt about it, however, it is a common scenario in contemporary times.