I agree that there is a good chance of people working 12 hour days under terrible conditions to assemble these. However, my point is that paying more at the retail end for a brand-name item is absolutely no guarantee that that is not happening unless you are careful of the country of origin. And even if it's "Made in USA" or whatever, that just means it's probably assembled there - the LCDs are probably still printed in Korea and the microcontrollers might come from Taiwan. The US has a big semiconductor industry, Intel for example produces much of the world's flash memory, and they do it for very close to the same price as Taiwan and Korea - semiconductors are cheap because of how they're made in insanely large numbers, not because of slave labour.
What goes into one of these thermometers is actually pretty trivial and semiconductors are perhaps much cheaper than you'd thought. There's a junction (just two bits of metal pressed together) to sense the temperature, a microcontroller (less than 1mm^2, costs on the order of 5c since you get about 30,000 of them from an 8" wafer), an LCD (these are printed out on rolls hundreds of square metres at a time like photographic film, likewise it's worth a few cents), two button cells (about 10c) and a plastic casing (fraction of a cent). Then they get assembled, maybe by hand, and that's a few seconds per item for someone earning a couple dollars per hour. You move that production to the west and the only thing that gets more expensive is the assembly (it's now 30s at $17/hour = 14c).
And that is all. Digital thermometers, while containing slightly interesting software (maybe $10k of IP in total), calibration tables and being the product of advanced semiconductor manufacturing, actually have approximately zero incremental cost once they're being stamped out 100,000 at a time. If you look closely, the cost of production is at most 50c with the biggest single cost probably being the batteries.
Edit: what boggles my mind is how they can ship them for the remaining 50c. There's got to be a subsidy of china post or something strange going on there.
Last edited by polyglot; 06-01-2011 at 06:55 PM. Click to view previous post history.