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Comment by moogly | Hacker News Reader

That was Howard Lutnick. He's said a lot of, let's say "out-of-touch", things. He's not living in the real world, though.

Motorola tried that not too long ago. Didn't go well. If you want to decimate American wages, you could do it, but if you at the same time deport people who were the most ready to work for a pittance, it's going to be hard to do this without riots. Then again, Stephen Miller wants those riots, so maybe you're right.

The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.

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The old chestnut that Henry Ford didn't actually say comes to mind though: "I wanted to pay my workers enough so they could afford the cars they were building." If they were making them in the US, Tim Cook could pay them enough to afford an iPhone on a payment plan with Verizon or AT&T. Even if he didn't want to, there's a federal minimum wage US workers employers are required to pay. What's frustrating is the investment Apple made in China is double the size of the Marshall plan the US invested in rebuilding Europe after WWII. That money could have been spent on America, but Steve Jobs spent it on China instead.

> That money could have been spent on America

This is wishful thinking, and similar to how how video game producers think if they stop N people from pirating a game, there will be N more copies of the game sold.

No, instead of that the game will be played less. And analogously, less iPhones would be produced.

You could argue that less iPhones would be good for the world, but that’s orthogonal to the topic.

You're overestimating the proportion of the price attributed to labor that goes into an iPhone. The reason that production is offshored is to shave off a few percentage points. The price difference is almost nothing to the buyer, but a lot to the owners of Apple.

iPhones have nothing to do with videogames. They are material objects, not zero marginal cost copies.

edit: and the point is that, across the economy, it is very good for labor. While the iPhone's cost would rise a little bit nominally, it wouldn't rise as a portion of income, which is the only important number. The retail price would probably rise a bit more than that, but that's because it is a luxury good and its price would rise as incomes rose.

> price attributed to labor that goes into an iPhone

Oh, that was not my point at all.

It's that we simply do not have the scale and manpower to do it. Maybe in ten years with more automation sure, but definitely not in the Steve Jobs era.

Interesting take. I would happily give up my iPhone if, instead, the US Department of Education got an extra $55 billion/year and US would pay people to go to college.

US pays people to go to college, but just the outliers.

It's an interesting tradeoff, make the outliers the best in the world at what they do, or make the average person slightly more competent.

I think it's difficult to design a system that makes both outcomes true at the same time. The countries that have succeeded in doing it so far have a tiny population compared to the hundred millions of students US/China/India has now.

China seems to be slowly moving to a system comparable to the US one where outliers are prioritized. India has avoided it so far, which is why we see so many generic software engineers from India. I wonder if that stance will change with that category of jobs rapidly shrinking.

IPhone production cost in China is between $10 and $30 per item. I believe a factory with US-level wages would not increase its price but it would definitely decrease Apple's profit margin.

Howard Lutnick is "in charge," real or not it's his world we're living in. ;-)

Despite their belief to the contrary the executive branch is in charge of very little in this country. They are harassing and extorting in legally dubious and often outright illegal ways, but companies and institutions and individuals are getting wise to the fact there’s very little power these guys really have because the law is structured to prevent executive abuse of power. All you have to do is get your suit filed and get a stay, and sooner or later the governments case likely falls apart. It’s frictionful for everyone involved and will sooner or later cause serious damage to the economy, but increasing as the initial shock fades, everyone is realizing the president is fairly weak and his antics and his hand picked but of loonies undermine any power they might have. It’s not Howard Lutnicks world, and as time goes on it becomes less and less so as they squander the reputation of the presidency tilting at windmills.

> The crux of the matter is that those workers won't be able to afford the iPhones they're assembling, however.

Of course they will, Americans banks and “tech” companies are always coming up with creative ways to extend shady lines of credit to the poorest Americans.

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