# Has outsourcing saved us money? **URL:** \ **Category:** Factual Questions\ **Created:** [September 26, 2010, 4:02pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106 "2010-09-26T16:02:14Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 4:02pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/1 "2010-09-26T16:02:14Z")
Is there any proof that moving US manufacturing offshore saved consumers in the US any money? I can’t see it, but my own sample is _way_ too small to be of any significance. Peace, mangeorge ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 4:21pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/2 "2010-09-26T16:21:00Z")
You’re not going to find a factual answer to this, but outsourcing is just an aspect of [free trade](http://en.wikipedia.org/wiki/Free_trade#Economics_of_free_trade), and most economists think free trade is good for countries that engage in it. > [@](#): > > Though it creates winners and losers, the broad consensus among members of the economics profession in the U.S. is that free trade is a large and unambiguous net gain for society. In a 2006 survey of American economists (83 responders), “87.5% agree that the U.S. should eliminate remaining tariffs and other barriers to trade” and “90.1% disagree with the suggestion that the U.S. should restrict employers from outsourcing work to foreign countries.” ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 4:42pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/3 "2010-09-26T16:42:57Z")
As usual, I wasn’t clear in my question. What I want to know is, do the products now made in China (or any other country) cost me less, due to that move, than when they were made in the US? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 4:52pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/4 "2010-09-26T16:52:50Z")
OK. That probably does have a factual answer, although I don’t have one. One complication, though, is that products are constantly being improved, making comparisons over time difficult. Maybe if you looked at something like furniture or socks, you could make a decent comparison. ---
**Author:** ![anson2995](https://avatars.discourse-cdn.com/v4/letter/a/c77e96/32.png) [@anson2995](https://boards.straightdope.com/u/anson2995)\ **Post date:** [September 26, 2010, 4:56pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/5 "2010-09-26T16:56:03Z")
> [@mangeorge](#): > > As usual, I wasn’t clear in my question. > What I want to know is, do the products now made in China (or any other country) cost me less, due to that move, than when they were made in the US? For a simple answer, I suggest a trip to Walmart, Target, or Best Buy. A significant percentage of consumer products are available at a lower price, especially if you adjust for inflation. But this is a complex economic question, which can be answered by looking at the cost-of-living index, the consumer price index, or other such measures. And as you start to factor in the effect that outsourcing has had on wages, unemployment, and inflation, it gets harder to answer definitively. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [September 26, 2010, 5:08pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/6 "2010-09-26T17:08:35Z")
> [@mangeorge](#): > > As usual, I wasn’t clear in my question. > What I want to know is, do the products now made in China (or any other country) cost me less, due to that move, than when they were made in the US? The retailer (or manufacturer, or wholesaler) has vast resources (compared to me, at least) to consider this question and a bottom line to maintain. Don’t you think that the retailer is constantly checking on this, and if the item could be made cheaper in the US, he would be doing it in a heartbeat? And if he doesn’t, that means something, perhaps answering your question? ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 26, 2010, 5:09pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/7 "2010-09-26T17:09:46Z")
I’m surprised you don’t think the question is obvious. Try and buy almost anything from screws to printing books and a Chinese manufacturer will quot you a lower price. So prices for consumer goods are lower, but then we lose blue collar jobs and replace them with Walmart greeters. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 5:20pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/8 "2010-09-26T17:20:23Z")
> [@anson2995](#): > > > [@mangeorge](#): > > > > As usual, I wasn’t clear in my question. > > What I want to know is, do the products now made in China (or any other country) cost me less, due to that move, than when they were made in the US? > > For a simple answer, I suggest a trip to Walmart, Target, or Best Buy. A significant percentage of consumer products are available at a lower price, especially if you adjust for inflation. > > But this is a complex economic question, which can be answered by looking at the cost-of-living index, the consumer price index, or other such measures. And as you start to factor in the effect that outsourcing has had on wages, unemployment, and inflation, it gets harder to answer definitively. I did look at that. It’s difficuld to determine if the lower prices are due to offshore manufacture or simply massive orders. There’s no doubt that the moves have saved the companies money, what’s not clear is if any part the savings have been passed along to the consumers. Best Practice would say no, unless lower prices were mandated by competition or some other pressure. Especially if the companies are corporations. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [September 26, 2010, 5:33pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/9 "2010-09-26T17:33:45Z")
New Balance shoes used to be made(maybe still are) entirely in the US. At the time they were priced the same as other major brands of(running) shoes. Recently, Hersheys closed the plant in Oakdale, Ca to move operations to Mexico, citing a 40% reduction in the cost of sugar as a factor besides lower labor costs. Hershey bars still cost the same. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 5:34pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/10 "2010-09-26T17:34:09Z")
> [@DanBlather](#): > > So prices for consumer goods are lower Retailers do not, generally, lower their selling prices simply because the wholesale prices go down. They’re in business to make money, of course. They, again generally, lower selling prices only to compete with other retailers. Convience stores price check each others constantly. Large retailers use agencies to monitor the competition’s ads and in-store pricing. My question is harder that I thought it was going to be. 🙂 ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 5:37pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/11 "2010-09-26T17:37:38Z")
> [@runner pat](#): > > New Balance shoes used to be made(maybe still are) entirely in the US. At the time they were priced the same as other major brands of(running) shoes. > > Recently, Hersheys closed the plant in Oakdale, Ca to move operations to Mexico, citing a 40% reduction in the cost of sugar as a factor besides lower labor costs. Hershey bars still cost the same. Perfect examples. Same goes for Levi Straus, who finally moved all their manufacturing offshore. ---
**Author:** ![Crafter\_Man](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/crafter_man/32/458_2.png) [@Crafter\_Man](https://boards.straightdope.com/u/Crafter_Man)\ **Post date:** [September 26, 2010, 5:42pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/12 "2010-09-26T17:42:35Z")
> [@runner pat](#): > > Recently, Hersheys closed the plant in Oakdale, Ca to move operations to Mexico, citing a 40% reduction in the cost of sugar as a factor besides lower labor costs. Hershey bars still cost the same. The goal of most businesses is to increase profit, thus this proves outsourcing can be successful. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [September 26, 2010, 5:46pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/13 "2010-09-26T17:46:24Z")
> [@DanBlather](#): > > I’m surprised you don’t think the question is obvious. Try and buy almost anything from screws to printing books and a Chinese manufacturer will quot you a lower price. So prices for consumer goods are lower, but then we lose blue collar jobs and replace them with Walmart greeters. That last part is not factually correct. > [@mangeorge](#): > > Retailers do not, generally, lower their selling prices simply because the wholesale prices go down. They’re in business to make money, of course. They, again generally, lower selling prices only to compete with other retailers. Unless you think all retailers are in collusion, is there any time when retailers are not competing? Ergo, based on your own understanding, they will generally lower their selling prices. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 6:13pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/14 "2010-09-26T18:13:57Z")
> [@John\_Mace](#): > > Unless you think all retailers are in collusion, is there any time when retailers are not competing? Ergo, based on your own understanding, they will generally lower their selling prices. But my point is, as stated, that they won’t go down due _directly_ to lowered wholesale prices. In fact, I think the astute business owner will lower prices when it sees that sales may go down due to competition’s lower price. Sometimes retailers are in collusion, most often not. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [September 26, 2010, 6:14pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/15 "2010-09-26T18:14:03Z")
Although people always talk about jobs being outsourced to China, as if they were the only country involved, I’ve read that China itself has a net loss of manufacturing jobs to other Asian countries. Chinese salaries are increasing, making their goods more expensive. Outsourcing has no real meaning today, except as a cheap pejorative and sitcom title. In a global economy companies and retailers can choose from suppliers and wholesalers anywhere in the world to get the right combination of supply, price, and quality. The state of each country’s economy varies continuously and the world economy rises and falls. Some products that were outsourced ten years ago are now being made again in the U.S. In another few years that may no longer be true. But the logic behind those moves are identical to a U.S. company switching U.S. component suppliers on a regular basis for the same reasons. You can’t compare what no longer exists. There is no U.S. garment industry anymore, to any extent. The entire industry made the decision to move production elsewhere, because the entire industry saw the same factors at work and made the same decisions. Did that save consumers money? Unless you can come up with a compelling reason why everybody in the industry was wrong and remains wrong even today, you have to assume the answer is yes. As I said earlier, not every move was a money saver and the amount of potential savings varies over time, so any particular product or good may get to be more expensive. But the costs are so incredibly much lower for so many different industries in other countries, I can’t imagine any compelling argument that says that overall over the last decade the savings hasn’t been immense. The net cost - once job loss, lowered savings and investment, poorer life quality in cities, and higher environmental costs worldwide - is a much harder question to answer, since it takes in so many non-quantifiable variables. Consumer price savings are much easier to calculate and much clearer. That’s an easy yes. ---
**Author:** ![Susanann](https://avatars.discourse-cdn.com/v4/letter/s/7ab992/32.png) [@Susanann](https://boards.straightdope.com/u/Susanann)\ **Post date:** [September 26, 2010, 6:16pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/16 "2010-09-26T18:16:51Z")
> [@anson2995](#): > > And as you start to factor in the effect that outsourcing has had on wages, unemployment, and inflation, it gets harder to answer definitively. Yep! YOu would have to add in all costs, not just the price of the object that is now being made in China. For starters, how much does it cost to give unlimited unemployment checks for years and years, along with handing out food stamps to a record number of people, and free health care for the unemloyed? There are over 10 million people collecting unemployment checks for 99 weeks. And then there are welfare checks. There are also other hidden costs, like security. How much is it going to cost us in the long run if getting something a dime cheaper, is going to result in a strengthening of Red China and a build up of their military power and them fighting us in a nuclear war? If Red China dumps the US dollar and makes it worthless and then takes over the world, that toy made in Communist China may not seem as cheap of a price in the long run. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 6:21pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/17 "2010-09-26T18:21:11Z")
[quote=“Crafter\_Man, post:12, topic:555106”] > [@runner pat](#): > > The goal of most businesses is to increase profit Right, not to provide product at a low price. Low price is the goal of the consumer. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [September 26, 2010, 6:31pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/18 "2010-09-26T18:31:58Z")
> [@DanBlather](#): > > I’m surprised you don’t think the question is obvious. Try and buy almost anything from screws to printing books and a Chinese manufacturer will quot you a lower price. However, the good are almost always lower quality. ---
**Author:** ![beowulff](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/beowulff/32/542_2.png) [@beowulff](https://boards.straightdope.com/u/beowulff)\ **Post date:** [September 26, 2010, 6:43pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/19 "2010-09-26T18:43:54Z")
> [@Susanann](#): > > > [@anson2995](#): > > > > And as you start to factor in the effect that outsourcing has had on wages, unemployment, and inflation, it gets harder to answer definitively. > > Yep! > > YOu would have to add in all costs, not just the price of the object that is now being made in China. > > For starters, how much does it cost to give unlimited unemployment checks for years and years, along with handing out food stamps to a record number of people, and free health care for the unemloyed? > > There are over 10 million people collecting unemployment checks for 99 weeks. And then there are welfare checks. > > There are also other hidden costs, like security. How much is it going to cost us in the long run if getting something a dime cheaper, is going to result in a strengthening of Red China and a build up of their military power and them fighting us in a nuclear war? If Red China dumps the US dollar and makes it worthless and then takes over the world, that toy made in Communist China may not seem as cheap of a price in the long run. “Red China”? Nuclear war? I think you need to look at your calendar - it’s not the 60’s anymore. ---
**Author:** ![mangeorge](https://avatars.discourse-cdn.com/v4/letter/m/d78d45/32.png) [@mangeorge](https://boards.straightdope.com/u/mangeorge)\ **Post date:** [September 26, 2010, 6:44pm UTC](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106/20 "2010-09-26T18:44:34Z")
> [@DrDeth](#): > > > [@DanBlather](#): > > > > I’m surprised you don’t think the question is obvious. Try and buy almost anything from screws to printing books and a Chinese manufacturer will quot you a lower price. > > However, the good are almost always lower quality. We don’t need or want quality. It’s easier to just buy a new one. [Next page](https://boards.straightdope.com/t/has-outsourcing-saved-us-money/555106.md?page=2)