I can't speak for all manufacturing, but in regards to cheap electronics I can say that the factories I've worked with in China don't pay their workers pennies. They make between $4-6 an hour.

Now that's still quite a bit less than what a US worker would make but it's not a significant amount.

What China really has that the US doesn't have, that the US is unwilling to admit as well, is the workforce and the infrastructure.

When a factory in China gets an order for 100,000 widgets in one month they can literally throw people at that problem in a factory thats already made to make it.

In the US that factory probably doesn't exist and there certainly isn't that number of people waiting around for the job.

In fact, at one point I was looking into making USB wall plugs in the USA and every US factory that could do it that I talked to, their first question was "How much of it can we do in China and still be considered Made in the USA". And the main reason was because they wouldn't be able to keep up with demand if they had to do it all.

Now clothing I don't know much about, but American Apparel makes their clothing in Downtown Los Angeles. And while it's more expensive than Target or Walmart, it's not an absurd price.

But I really think the biggest cost would be getting enough people to keep up with the level of output that we expect. Which goes back to your first point of paying more.