o word of the day: UNIT COST

The unit cost is the cost incurred by a company to produce, store and sell one unit of a particular product. Unit costs include all fixed costs (i.e. plant and equipment) and all variable costs (labor, materials, etc.) involved in production.

Imagine if we could create a table of all the unit costs for consumer goods made in the US. The unit cost of a shirt, made in America, assume is $10.00. Then imagine a world in which free trade is fair trade and US workers are put on par with global workers. A world where slave labor is discouraged. What the US could do is to tax foreign good shipped to the US if the goods are being sold below unit costs. Because of minimum wage, a variety of taxes and other government enforced conditions, US manufactured goods are priced out of our own market. The current system is simply not fair.

Or, we can choose to keep things the way they are. Let's apply this notion to sports, where fairness and rules of the game are very important. From now on, for all Indian and Chinese tennis players, the doubles alley is considered fair play and in bounds. Yao Ming can have ten personal fouls, take four steps before shooting, and can shoot foul shots from five feet away. We are doing the exact same thing to American manufactured goods.