eli5 how it’s cheaper to manufacture goods in other countries and have them imported back to north america?

Question

I get it’s the poor pay for labor but what about transportation and materials?

In: 0

Answer 1

I’ll take an exemple that is not exact, but easy to understand:

Let’s say a phone takes 10 hours to make by a single person. At 10$/h, it costs 100$ in labor. At 1$/h, it’s 10$ in labor. If you can ship a box containing 1000 of them, that box contains 10k$ of labor instead of 100k$ of labor. Unless that box costs 90k$ or more to ship, you’ve made more money.

You’ll have to pay for materials both ways, so it’s irrelevant.