That price would much more likely be $45 or more for the shirt that cost $15 at the factory, and $20-$30 for the cheap one. The next step from manufacturer typically doubles the price, the next step in international transactions typically is a multiplier of 3 to 5 on top of that, and then there's yet another mark-up or two after it gets to the USA or UK or Europe where it will be sold retail, according to the books on India and Red China and Malaysia that I've read (and an econ professor of my acquaintance who was in VietNam doing research).
You're leaving out variables. Price also depends on the label (both highly-promoted "designers" and due to product differentiation), on how much it's been down-engineered (lower-quality design of the stitching pattern, for example), thread-count, weave- or knit-pattern, shipping and other mark-ups along the supply chain.
In your hypothetical example, you're artificially and arbitrarily holding "quality cotton" (i.e. "quality materials") as a constant, and it is a variable. We've seen CNBC video of retail chains arguing to product-inventors and -makers that they should substitute less durable, lower-quality materials, making design changes which would make the product less comfortable, less durable/shorten it's useful life... I.e. to make it cheaper rather than to hold the quality constant and make it more efficiently and less expensively.
You can see it with shirts, shoes, cars, hand-tools, power-tools, machine-tools, sewing machines, sticky notes... just about anything. We've seen a lot of reduction in quality of materials and workmanship as manufacture was moved off-shore while retail prices were held constant or increased, profit rates increased, and compensation packages of many executives soared, while compensation of many (not all) worker-bees was stagnant or fell. We've also seen quality and prices vary with the prices of natural gas and other feed-stocks, cotton, and resulting shifting blends.
It would be different if all the quality options were constantly available in the retail stores, but that's not how it works. They completely remove one set of goods and only offer the new set, so the market is impaired; you don't have the option to merely pick a different item off of the next shelf or buy it at the store next-door. For many many goods the markets have been bifurcated: cheap trash at low prices (but still too expensive for the quality), and hideously expensive retail goods of only moderate quality in many cases. For many goods they don't offer (in some cases even allow) honest country-of-origin labeling (COOL) so that you can choose on that basis if you wish, so that's a throw-back to the old evil pre-market, mercantilist, and hyper-regulated feudal guild and crown-granted monopoly days.
It's all been covered over the last 15 years and more in the media that cover economics and finance and such, a little here and a little there. Once every several years, I run across an article or a bit of coverage on the tube that brings most of the elements together.
"What is the difference between a standard business program (nothing super advanced- a well recognized pattern) turned out by a $9,000 a year programmer in india vs the same program turned out by a $90,000 a year programmer in a 1st world country?"
I try to avoid "standard bidness programs", but many software products (and hardware designed or manufactured using that software) take a dive when they're off-shored. Some US and UK programmers have eked out a living by repairing the software botched by guest-workers or over-seas, but few have the contacts to make a go of it that way. But I know that not every non-USA, non-UK, non-German programmer is incompetent; a very few are quite good. And that's what all the studies tell us to expect; about 1 out of 12 can do the work of the rest of that 12... if he has the time and resources. That's 1 of 12 in the USA, and probably 1 of 12 in Hyderabad or Prague or Kiev. But they often plan to throw 5 less competent, cheaper programmers at a piece of work that 1 good programmer could do better and faster (see, e.g. ye ancient Ill-Begotten Monstrosities tome about _The Mythical Man-Month_).
I've worked with some Germans, Japanese, Polish, Koreans, Chinese, Israelis... who were very good and some who were not.
Everyone in the developed world thinks it's common sense to restrict access to firearms. Yes, the USA is the most developed part of the world, and we believe the same. People who have proven that they cannot be relied on to properly own and carry and use arms as tools of defense (of themselves and others, including the state), for precision target shooting, and for hunting in a way that does not harm others have that right restricted, along with their privilege to vote. That's common sense. It is not common sense to leave yourself defenseless against any random private or government thug. People in much of the world lack common sense in this regard despite repeated lessons to the contrary.
Reasonable background investigations of visa applicants is common sense; not so much as interviewing applicants and not cross-checking claims made in appplications is nonsensical. Fencing borders is common sense which has repeatedly been proven to work, though not perfectly; perfection is not achievable and not expected. Tracking people in the country on temporary visas is common sense, but here again perfection is neither expected nor common sensical; merely conscientious, industrious, reasonable effort is common sense. Admitting the best on work visas is common sense; giving out millions of visas without any skill-level standards at all is not common sense. Assimilation of immigrants is common sense; not assimilating immigrants is insane, as recently and repeatedly demonstrated all around the world.
Yes, in the light of the value and expense of information, it is a valid and valuable heuristic. If you go to a hardware store or a big box "home improvement" store, and look at the quality and the prices, they more of less follow the rule. The more expensive switches and sockets, for instance, have heavier, more conductive conductors than the cheap ones. The cheap ones are also much more likely to mechanically wear out long before the more expensive ones.
Yes, heuristics are not perfect. There are cases, today, in which dullards are paid millions for doing very little, and brilliant people are paid well below median wage... where software developers have praise heaped on them for merely changing a configuration setting/option/property and receive little recognition for coming up with a creative, elegant, valuable solution after great effort... where the sales-clone who doesn't have a clue is paid a huge commission just because his job puts him at the juncture where the purchase is finalized while the pre-sales engineers and software developers and systems administrators who developed and made the presentation that sealed the deal get zip in the way of a bonus or raise.
That's kind of beside the point, though. The fact is that what public records there are have been investigated by the statisticians and economists of academia and it was repeatedly found that very few H-1B grantees are "best" or "brightest" (estimates range from 2% to 8% depending on the researcher), that the vast majority are mediocre people, doing mediocre kinds of work, for below-market compensation.
There are ways under the H-1B "prevailing wage" requirement to pay guest-workers less than market compensation, despite the deceptive label. And, in general, studies found that they were being paid 10%-15% below market, while certain ministers of foreign countries and certain executives of foreign-based bodyshops have openly admitted that their business model relies on paying as much as 35% below US local market compensation to the H-1B guest-workers. (There is no US "prevailing wage" or local market compensation level requirement for guest-workers on L-1 visas.)
Yes, we should eagerly welcome the genuinely best and brightest, the highly gifted, those with arcane knacks... but that would have the numbers be 500/year rather than the recent levels of 153,794 admitted in fiscal year 2013, 135,991 in FY2012,
People who are not in the habit of initiating force or fraud, people who are not well along in planning a terrorist attack, that top 0.000 001% of the world's 7G population (i.e.about 7K*) who are genuinely "best and brightest" and show some creativity, honest industry, and have rare knowledge and experience... should be allowed to come to the USA to live and work and assimilate to core US founding values.
* In light of the millions of able and willing US citizen STEM professionals who are unemployed and under-employed, in light of the STEM occupation unemployment rates which have been running 2 to 3 times as bad as the full employment levels for over 10 years, in light of the one-third to one-half of new US STEM grads who have been snubbed by STEM executives and hiring managers for some 15 years or more (and the overall USA jobs dearth of about 30M which has lingered on for nearly the last 10 years), 1K/year H-1B visas would be appropriate, and 7K/year generous.
Ron Hira has addressed this years ago, but here's how I see it:
You've got an office in Outerstan, and set up a sales office in Cincinnati (or Buffalo, or Southfield, or Jacksonville), using $10M-$25M in "incentives" given to you by the suc, er, fine local and state government economic development/crony socialists, widely poclaiming that you expect to employ 1K people (from where you refuse to say). You send 100 people from Outerstan to Cincinnati, or recruit 100 or 500 Outerstani's from USA universities within 400 miles of Cincinnati (or, more likely a combination, with most being fresh college grad Outerstanis in the USA already, with a very light sprinkling of new-US-grad Easten Europeans, South Americans, Africans...).
They're on a combination of F with OPT and L-1 and H-1B visas, and, as others have claimed, many of them want, and expect, to be able to stay in the USA for an extended time and perhaps become citizens. Many of them have gotten a great deal of help with their class-work and simply living in the USA, transportation, bail... from generous Americans. (Yes, I've helped several, and friends and relatives have helped many more a lot more than I did or could. In the end some of them were quite deserving of it, while others were not.)
On this first gig they know nothing about the application areas of your customers, and only academic knowledge about programming, not what real commercial/production programming involves. But your bid was so low that you dare not invest in any training of substance for anyone. So, you have the soon-to-be-former US citizen employees of the client firm train your guest-workers (and if they don't co-operate in training the guest-workers, or try to sabotage it in any way, they don't get any severance pay and they don't get positive recommendations for use when trying to get a new job -- they have communication problems, aren't team players, are borderline insubordinate, are not people people, or simply say you're reluctant to recommend them... nothing anyone could prove or disprove that you're stabbing them in the back, but it still sounds bad enough to stab them in the back to the extent of hampering their careers).
You have your guest-workers get a little experience doing the rote work, then a little work that requires understanding and creative figuring out how to do it. And then start sending them back to Outerstan in shifts of a few at a time. These rotated guest-workers and green card holders teach your crews in Outerstan HQ (your off-shoring services center), and they keep up a communications conduit between your bases of operations.
You (typically) sponsor 0.5%-2% of your guest-workers for green cards and send the rest back to the old country, or scrambling for new jobs in the USA when their gig is up, or simply illegally over-staying their visas. You have an iron grip on the compensation and working conditions of the ones you're sponsoring for green cards through the several yars of the application process, because it would be more difficult and expensive for them to jump ship (though the law explicitly allows them to do so). You also use a tiny number of US citizens for PR and to work with some of the guest-workers to drum up business (clients and contracts/gigs) for your bodyshop/off-shoring operation (yes, I've had bodyshoppers from Outerstan ask me to help them drum up business).
After a while, you've build up a collection of frameworks and templates, and the bodies shopped and green card holders and then the guys back at Outerstan Base are about to die from boredom doing essentially the same work with only minor variations repatedly, for different clients. But your bids are less wildly off the mark, and the guest-workers and off-shore operations people can't be too terribly dissatisfied because, as low as the pay is, and as crowded as they are in that shared house or apartment, it's better than the opportunities they see as possible to them.
You begin to send the 35-year-olds out to pasture on one pretext or another. Yes, you did fine in that last project, yes I know you've got family obligations now and house payments and a retirement fund that's practically non-existent, but we don't have another contract that requires exactly your expertise, so back you go. We really wish we could keep you here but we cannot. And then you recruit another batch of cheap, young, pliant Outerstanis with flexible ethics from the universities, with the latest buzz-words, methodologies and versions from the American universities (where they were taught these latest-greatest, must-have "skills" by 50-70 year olds who figured them out last month or last week or picked up from a conference or journal article, in classes along the with the US citizen students only one-third to one-half of whom will have a real shot at employment in the field), and send the guest-workers off on the new set of gigs.
Churn churn churn. Cheap cheap cheap. Young young young. Pliant pliant pliant. Flexible ethics, flexible ethics, flexible ethics.
* For project C, appoint the body shopped in for project B to be the new liaison for the off-shoring effort, to facilitate communication with his/her cousin.
"There is no such thing as 'a body that is guaranteed to not be in bed with business'."
A dead body might be in bed with a business, and yet not corrupt (or perhaps you were thinking about Obummer's and Shrub's Communist Corpse effort to pervert education, now there's a corrupt body). But experience shows that any other body -- government or business -- in such a scheme is virtually certain to be corrupt... in the immediate sense of demanding and then spreading around personal private data.
"National Center for Supercomputing Applications, Defense Advanced Research Projects Agency and the National Science Foundation"
Good try but all of those existed before 1991. It's good to see that one of them is constitutional, though.
I don't know what Biden knows, but nearly everything he seems to think he knows is wrong. (HT to Firesign Theater)
"Unless you are counting the 57 computers on ARPANET at that time as 'The Internet'"... Yes, it counts; it counted when there were only 3. No significant change in how it worked was made when they changed the name to distance it from the US Defense Department.
"He also paid the bills for the initial development of Internet Explorer and letting AOL users onto Usenet"
Yes, he's done much more evil than I'd thought.
That's what extortion does. Taxes, when they aren't restricted to constitutional and reasonable activities (like national defense/securing the borders, reasonable costs for negotiating treaties, defending people from initiation of force and fraud), pay for things like degrading civilization, enriching and empowering corrupt and power-mad politicians and their families and friends (i.e. crony socialism).
Algore did not pay the bills. He added to the bills. He used the coercive power of the government to force others to pay for things he wanted. (And it's not just him, of course. I had a cousin, more closely related to the Kennedy clan, who was a US senator a wee bit before Algore; a Whig. He pushed through the unconsitutional funding for stretching the first telegraph line from DC to Baltimore at a time when it could have more honestly been funded via private and voluntary means as many other such projects were at the time... His brother was a US senator, too, from the so-called Know-Nothing party.)
2- Some of the foreigners who come to the USA, get some education and/or training and then leave are *good* for the USA, while others (e.g. bin Laden, or that POW general we let go during the American War for Independence who turned around and just about caught the Virginia governor Thomas Jefferson and legislature including Patrick Henry) are bad for the USA.
3- Some of the aliens who come to the USA, get some education, some training, and then stay and work in the USA are good for the USA (e.g. couple university profs and C*Os I've known), while others are bad for the USA (e.g. Faisal Shahzad the would-be Times Square bomber, the several Red Chinese spies caught over the last several decades and thousands more who were not caught; the Israeli who gained citizenship a few decades back and was a spy; other foreign-born university profs and C*Os).
4- Many of the aliens who come to the USA without bothering to get a visa, or who stay in the USA after their visas have expired are bad for the USA (extra burden on education system, welfare expenditures, other crimes they commit; e.g. Uncle Omar; Aunt Zeituni, MS13); but it is likely that a very few are good for the USA.
The brushes are too broad, and people can repent and reform. The problem is the lack of standards, the lack of sorting out the individuals, and issuing too many foreign student visas, too many guest-workers, too many exchange visitors, too many green cards. It would be different if, ceteris paribus, USA population had dropped to 10M and was still falling; then we could maybe use a couple million foreign students and guest-workers and immigrants (who whole-heartedly loved our founding principles) each year until population stabilized.
In reality the job situation in the USA is extremely bad, compared with US history. We've almost always had low unemployment, and low consumer prices relative to wages... until recently. Indentured servants earned enough to endow several counties' educational systems. A few pennies could buy enough food to satisfy for several days. And though there were periods of inflation and deflation, Friedman & Schwartz _A Monetary History of the United States_ and other economic histories have shown that, except for the time of the War for Independence, these were small blips compared to the gyrations since the creation of the Federal Reserve board.
That's what made it possible for people to more rapidly improve their socio-economic status, so long as they were able and willing to work. And now the US government (executive, legislative, judicial) are working as hard as they can to worsen the situation, discourage saving, discourage productivity, encourage bodyshopping and discourage employment.
Very few H-1B recipients are highly skilled. Very few US citizen STEM professionals are highly skilled. In every occupation and every industry, there are very few who are great and many who are good, many who are mediocre, and many who are low-skilled, and a few who should be embarrassed and seek some other field in which they might be able to do better.
Now, a very few who are indeed brilliant but ignorant should be admitted to our universities; and some 5%-10% of those should be admitted to apprenticeship programs after their first year or two, and then to paid employment employment, so long as they stand in line behind the equally capable US citizens.
Yes, we need to find, admit, and retain that top 0.00005% or less (reality-check: let's see 7G... 0.000025%; double that to be generous; 5 out of every 100K) assuming they can also pass a proper background investigation; not drop all standards, rubber-stamp every applicant, and worsen the over-population and over-crowding to no purpose. And once they've met the standards we should eagerly accept and embrace them and help them become thoroughgoing Americans by learning about the Declaration of Independence, Articles of Confederation, Federalist and anti-Federalist articles, the US constitution, American War for Independence, Civil War, apple pie, baseball, football... while bringing the best of their cultures with them.
Yes, the difficulty of a guest-worker moving from one employer/sponsor to another means that the guest-workers must be more pliant, more willing to go along with the employer's unethical activities, less willing to blow the whistle on being under-paid or any other abuses. That's not a core issue, but a side-issue that can be taken care of after the fundamentals have been reformed. Giving them all green cards only makes the STEM talent glut (and other economic problems) grow geometricallly worse as they sponsor their friends and relatives for more green cards.
Thousands of STEM jobs are being done by US citizens with no degrees; but we have millions of US citizens with STEM degrees who can't get STEM work.
OTOH, in 2012, the US government gave out over 135,991 H-1B visas, and over 153,794 H-1B visas in 2013. Maybe he was thinking of the F+OPT apprenticeships... many of which are unpaid.
Then again, how many more able and willing US citizens would have had a decent career if they weren't constantly being undermined by these apprenticeship and guest-work programs which favor non-citizens?
I think the most irritating thing is the way the reporters (and executives, and politicians, and their lobbyists) assert that every H-1B is "best and brightest" and "highly-skilled", when the data available suggest no such thing; and not a single reporter questions them about it. Experts differ a little, but generally come down in a range between 2% and 8% of H-1B grantees who may be genuinely excellent, bright, highly-skilled; the vast majority are mediocre lights, doing mediocre kinds of work, at below-market compensation. And US citizens aren't given a chance to bargain over pay, even if only to become and stay employed rather than dismissed without consideration, regardless of knowledge, experience, creativity, industry, past productivity, etc.
C for yourself.