Sunday, January 22, 2012

iphones and jobs in China

Commerical about new iphone glass (less than 1 minute)

NYT (1-22-2012) Apple, America and a squeezed middle class by By Charles Duhigg and Keith Bradsher

An article in last Sunday's New York Times reveals how iphones are produced, and why jobs are going overseas. While everybody knows wages are lower in China, you might not be aware of two other  factors that are even more important: 1. Chinese workers are willing to live in dorms near the factories, to work longer hours, and to work overtime on short notice, and 2. costs are lowered dramatically by locating all production processes near each other.

This article also introduces the concept of the job multiplier. One new manufacturing job generates many other jobs (tools, inputs, equipment, infrastructure, management, energy, food services etc.), while one new service job does not generate nearly as many others jobs (management, food services etc.) The video link provided below does an even better job of making this point than the article .

Interactive video (5 minutes) on loss of jobs in the middle

Does anyone have any ideas on how the U.S. can get its job creation mojo back?

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