[Lazamataz]

Suppose you make 10 gadgets per hour and get paid $10. A Chinese worker make 2 gadgets per hour and get paid $1.90 By how much should you salary drop for you to be as desirable as the Chinese worker. The cost of a single gadget you produce is $1 vs. $0.95 when made by the Chinese. You salary should drop only 5% --- from $10 to $9.50 --- for you to be competitive. These $9.50 are far above $1.90 that the Chinese worker makes. You don't have to accept the Chinese wages at all.

Your problem is the Chinese worker seems to be making 17 gadgets an hour at that wage.

[neutronsgalore]

Your problem is the Chinese worker seems to be making 17 gadgets an hour at that wage.

Bingo. Any improvement in productivity, and/or willingness to work your people to death with a massive back-up labor pool leaves us outmatched at every step. Something only protectionism can counter.