By Donna Westfall – January 31, 2021
The simple answer, NO.
Let’s get a little more complex. Newsweek article from 2018 –
Chinese Women Workers Make 4 Cents for Producing $45 Disney Dolls BY CRISTINA MAZA ON 12/6/18 AT 10:01 AM EST
An undercover investigation confirmed that women, mainly over 45 years old, got 4 cents for producing Little Mermaid Dolls. They were overworked, and if they took off they were fined or fired for taking sick days. They even violated CHINESE LABOR LAWS… but we’ll get back to how their labor laws compare to American’s labor laws in another article because it’s another reason why American businesses can’t compete.
There are currently 400,000 people in China considered to be middle class. (Refer to the GINI Index). That only leaves about 1 BILLION that live as lower middle class and the majority in poverty.
What is the minimum wage in China? It depends on the city, because there is no uniform minimum wage in China. Each local government sets their own minimum wage. For example; from lowest minimum wage to highest = 13.6 Yuan per hour in Zhejiang to 24 Yuan per hour in Beijing. How does that translate into US Dollars:
13.6 Yuan equals $2.08/per hour and
24 Yuans equals $3.73/hour.
The minimum wage in California for 2020 is $12/hr.
Why is labor so much cheaper in China than in the US? One reason, the Chinese government imposes few health and safety or environmental regulations. Other reasons, LOW TAXES and duties along with competitive currency practices.
Let’s take Apple as an example. They need to make a profit in order to stay in business They make iPhones. Here’s a schedule of iPhones if you were to go out and buy one:
Apple Inc is headquartered in Cupertino, California. Their closing stock was valued at $131.96 as of closing January 29, 2021, down $5.13. They have 2.4 million employees in the United States across 50 states.
And unlike with many companies, both full- and part-time employees are eligible for such benefits as health insurance, matching retirement contributions, and an employee stock purchase plan. Sounds good. I couldn’t find anything on-line so far that translated to Chinese workers getting any of these benefits.
According to an LA Times article dated February 4, 2020, Apple employs a million workers in China. Virtually all of the worlds iPhones are made in China. In the city of Zhengzhou, based on 2018 figures 350,000 Chinese were employed to churn out the worlds iPhones at a Foxconn factory. That work force produces 500,000 phones a day or up to 350 a minute. Foxconn is the main assembler of iPhones for Apple. There are currently 1.5 billion iPhones in use in the world today.
Apple made $71 billion operating profit for 2019. They have manufacturing of their iPhone 12 series with pre-production in China, India and Brazil.
What about unions? All-China Federation of Trade Unions (ACFTU) is the national trade union center of the People’s Republic of China. It is the only trade union allowed to exist in China. If a strike is called, it’s called by the workers, not the union.
Now if someone were to make a graph of having a manufacturing company in California producing iPhones, with our $12/hr minimum wage, our tax structure, our unions, our rules and regulatory burdens, is there anyone that thinks iPhones could be manufactured in California…. and still make the company an operating profit?
Over 14,000 companies have left California because of it’s high cost of living, taxes and regulations. Take taxes and fees for a second:
Corporate tax at 8.84% for 2020 (Texas imposes just a 0.75% franchise tax on business margins)
California has four state payroll taxes which are administered by the EDD:
Unemployment Insurance (UI) and
Employment Training Tax (ETT) are employer contributions.
State Disability Insurance (SDI) and
Personal Income Tax (PIT) are withheld from employees’ wages.
And FEES: $800 a year for a corporation fee
There are hundreds of American companies that produce, manufacture or purchase their products in China. WalMart being among the largest if not the largest.