We'll use this as an example and I know it won't work but we'll try.
China's making cars - $10,000 less than they can be made in the US or Canada = so a $20,000 vehicle now costs $10,000. In the USA there's a lot of poor people making minumum wage. Which is half of the Cdn minumum wage which just means we'll be screwed more... but that's another example.
OK, the working poor in the USA can now buy a car - new one at that. But what about the Big 3 autoworkers?? What about their unions. Say their costs are $15,000 so they make a margin of $5000. Yet China can make that car for $5000 and selling at $10,000 gives them the same margin. But they can sell at home for $6000 due to the huge population they make up the margin in the number of cars sold.
The Big 3 cannot compete. Therefore they start closing plants - which is what they are currently doing - and moving to China, Mexico etc. Where the fixed and variable costs are considerably lower. This will allow them to lower the cost of their cars on the world market and stay "in the game".
The poor will always be poor, the rich will always be rich... but the middle class... is going to take a BIG hit. Either they will have to lower wages and benefits to keep the plants open and compete or the jobs will move. This will create a recession.
Imperial Tobacco is going to Mexico. Pulling 100% out of Canada. Why, with benefits the wage rate was $40/hr. Plus all the red tape and crap dealing with the Cdn and Provincial gov'ts.
Do you blame them??
Also, China is shipping into our countries but we're not shipping into there's. My dh just said they are agriculturally self-sufficient, enough raw materials they can make anything, they are well educated, excellent research capabilities, and have a huge slave wage rate, poor working conditions class of people to make cheap products - cheaper.
Sheri