Thread: Twinkie for your thoughts

It depends on where the inputs for the finished product are made...

For the company I work for, one of the cheapest inputs is labor, no matter what country that labor is from.

We have one shop in the US and one on Mexico - the largest determining factor for what gets made where has much less to do with labor costs than it does with where products are being shipped.

Edit to elaborate:
We make parts for tractors and industrial machinery. The company that makes the machinery has assembly plants all over the world.
Working backwards through the chain: an area of the world has a large demand for brand X tractors; brand X builds an assembly plant in that area rather than shipping finished products there; suppliers like us put shops near the assembly plants; our suppliers set up operations near us; and so on...

If all of this sounds bad for American workers, it's not - there are still plenty of plants here, and these products are selling on a global market, bringing a lot of money back here.

There's also the economic concept of comparative advantage, whereby we benefit as an entire economy from focusing on the things that are most profitable and farming out the rest.

Back to the company I work for - our USA business is stronger by also having a shop in Mexico. It's not a loss of jobs for USA workers; those jobs wouldn't exist here.