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Comment by ap22213 | Hacker News Reader

The reason why iPads are built in China is because of a thing called Comparative Advantage [1].

Even though the US could reasonably produce iPads _more_ efficiently than China, it doesn't. The reason is that the US is even more efficient at supplying higher-cost services (software, finance, etc.) than China that it would be at producing iPads. Therefore, the US is better off training more of its workforce for higher-cost services than to train them to be laborers.

[1] http://en.wikipedia.org/wiki/Comparative_advantage

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This is part of it, but there are other important factors at play here. In China, the contractors of Apple don't have to adhere to US labor and environmental laws. These are huge factors in decision to outsource production to China.

...not to mention currency and wage issues.

Unfortunately, the "comparative advantage" in this case results mostly of self-inflicted woulds on the part of USG. For a company with highly productive employees such as Google, the large fixed cost associated with labor-law compliance isn't that big a deal, but for low-wage jobs it can be comparable to the cash compensation. There's no shortage of low-cost laborers in the US; it's just that onerous regulations price them out of the market.

Onerous how? I'm not a business owner (well, I am, but with a staff size of one, which is mostly irrelevant to this conversation) - the regulations i've seen don't seem that bad.

Could you be more specific?

See http://www.dol.gov/compliance/topics/posters.htm (among many other examples).

Just posting a number of laws does not explain how they are onerous or hard to follow. Let's see...

Minimum wage stuff, no hostile work environment, no unsafe work environment, FMLA doesn't even apply unless you have more than 50 workers, etc.

I know most of this stuff by heart just from being in the workforce, let alone an employer (who I'd assume worked for someone else at some point in their career).

"Onerous" essentially means "expensive to comply with", not necessarily "hard to follow". For more detail on these sorts of issues, see, e.g., http://esr.ibiblio.org/?p=1752.

The fallacy in that is that countries don't get to decide and plan what their comparative advantages are. If the US can systematically train it's workforce for higher-cost services, so can China. Except, they can do it faster, cheaper and at a larger scale (like everything else they do). This is what happened with white collar IT jobs going to India.

Nicely put.

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