What the Media Are Missing About Chinese Recalls and Protectionism

ABC correspondent Chris Cuomo unleashed a scathing commentary on Mattel CEO Bob Eckert in an interview on the August 15 “Good Morning America”:

“But fundamentally it comes down to where you’re having the toys made. They’re being made in China, you don’t have oversight, there’s tremendous pressure for them to cut corners and keep costs down, because that’s how you make money. So allow me to ask you sir, how much money are you saving having these toys made in China?”

Consumers are saving money – not just the company. But it isn’t all about saving money, according to one expert. Aside from the labor costs – 25 to 50 cents an hour in China versus $18 an hour for a toymaker in Missouri, according to ABC News – there are issues of product availability.

In the media’s rush to protectionism advocates, journalists have overlooked possible consequences.

“If you were to require that we have no imports from China, then we’d have to take those resources to produce some things to export to China and instead use those to make Barbies instead,” James Sherk, a labor expert at the Heritage Foundation, told the Business & Media Institute. “We wouldn’t be making as much computer chips or as much software or what have you. And on the whole, we would have less stuff in general.”

He also said U.S. labor is much more skilled and has more capital invested in it for tools (e.g. laptop computers, word processors, etc.) than Chinese labor, and the markets dictate which goods and service are produced where as a result.