andyt andyt:
Can't pay employees decent wages - that's not today's business model. Squeeze every penny you can, to squeeze prices as low as possible is the only way to get customers. Most of the profit goes to Asia either way, as we buy all their crap. And cut our own throats to save a buck.
Profits go to Asia? I doubt it, none of the profits go to Asia. Asia may make profits on manufacturing goods for the West, but the vast majority of profits from Wal-Mart/Target/big box stores go to shareholders and CEOs, not Asia.
The old model was buy a widget made here for $8 and sell it for $20 to customers. After labour/infrastrucutre, the company made $2-3.
Nowadays, that widget is made in Asia for $1, another $2 is spent on shipping it here and it gets sold for $15. Labour and infrastructure still cost about the same, but profits jump because the product costs far less to manufacture.
There's a reason why the stock market is valued hundreds of times higher than it was in 60s and it isn't because profits are going to Asia. It because stock prices on average are far higher than in the past - because of increased earnings and dividend payouts.