However, Thailand is considered to be at a more advanced stage of economic development, so that the study uses quite recent U.S. wages as the basis for comparison. Low wage rates do not necessarily mean low costs, though. Wages are low in developing countries because workers are not as productive as workers in the United States. While the employees may cost less per hour, they take more time to produce the same product. Total labor costs may or may not be lower in a low-wage country.
Labor cost is only part of total cost.
If low wages alone were decisive, we would import all our goods and services from countries like Haiti. Other factors affect cost, though, including cost of capital, expertise of management, transportation, taxes, etc. Purchasers will also consider non-economic factors, such as political risk and the ability of suppliers to comply with labor laws and standards in deciding whether to buy from a given country. And this is why American retailers continue to purchase a significant portion of their merchandise, especially high-quality products, from American suppliers.