I have just looked at minimum wages in various countries. Here are a few, in US dollars, which is how it is listed on Wikipedia:
Australia $17.39 July 2014
Luxembourg $14.42 Oct 2013
Netherlands $10.99 Jan 2014
Ireland $11.09 July 2011
UK $10.32 Oct 2014
Canada $10.00 Sept 2014
Japan $8.32 Nov 2013
USA $7.25 July 2009 (but some states have no minimum wage.)
Taiwan $3.38 Jan 2014
China $1.19 Jan 2013
(Italy has no national rate, minimum wages set sector by sector by collective bargaining, while in Germany a handful of trades have national rates, the rest sector by sector by collective bargaining. It is difficult to know where to put these in the list. 'Average income' would include millionaires and can't be compared with minimum wages anyway. Probably best to assume that production line instrument makers would be somewhere in the region of UK wages?)
it is clear that China's minimum wage is barely more than a third of that of Taiwan; slightly under one sixth that of the USA; almost exactly one seventh that of Japan; and almost one ninth of that of the UK.
I don't have any figures to produce a materials bill of costs for a saxophone (I'd guess that all components are manufactured from raw materials in China and not bought in from another country) but I'd guess that the biggest cost might be the brass. Brass sheet in the USA costs just over $3.50 FOB per lb. So less than $20 for the brass for a tenor sax (?) .... the same again for material cost of springs, pads etc is surely generous...
So total material cost to a volume manufacturer is probably $40 - or less - for a tenor sax.
All we need now is an idea of person hours needed to make a tenor sax and that would give us the manufacturers' costs per country. Any offers?
Whether Taiwan and Japan will continue to manufacture I have no idea. Politically, of course, they both have an incentive to try to continue... 1:3 and 1: 7 ratios of labour costs are very daunting obstacles.
The above figures do not include taxation, health or other costs in the various countries... China, again,
will no doubt have a massive advantage. Business rates in the UK are crippling... China probably pays businesses on floor space rather than tax them in order to boost exports and foreign earnings...
Profit margins of importers and retailers are likewise not taken into account. There is liable to be a large variation from country to country and within countries. Shipping, also, is not given. How many saxes fit in a container?
The figures above are enough to show why Chinese saxophones are so very, very inexpensive. Before Suzuki and Honda motorcycles took the world by storm just over fifty years ago (my school friends talked of little else...) Japanese products were sneered at in the west as being cheap, inferior copies...
There is simply no need to assume cost cutting on materials or labour or have poor quality control. This last is always the last to be tuned by a manufacturer, as it depends on tuning production techniques and building a skilled and motivated labour force. But Chinese manufacturers are reputed to have plenty of savvy - why not spend two or three dollars more and make sure the product is an acceptabe quality - or even exceptional quality - see Stephen Howard's G4M 'vintage' alto sax review... They seem to be working on this incrementally...
I would strongly suspect that quality will continue to increase and China will be the main producer of saxophones, which may in some cases however be assembled/finished/regulated elsewhere by firms aiming at the 'hand finished' 'high quality control' sector of the market. Indeed this is already happening.
Nothing stays static in economics. Eventually China's labour costs will rise to approach those of its nearest competitors - but that might not happen for decades.
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