No, it doesn't. In fact, America has massive capabilities in mass-production. Why is is more lucrative to have assembly and some manufacturing off-contracted to China? Simply because, Foxconn and the like are willing to continually invest in new production, or compromise to get the contract. Human labor is also very flexible, very efficient, and doesn't need a change of hands to accommodate a new product. A machine on the other hand, needs to change a part, or new software. Tbh, there is very little reason to build anything in America. Infrastructure and support for any type of consumer production exists in China, it's still cheaper in some regards.
My original message wasn't the most clear, and it was misinterpreted. I understand manufactures like Foxconn have workers that are paid next to nothing. I understand that labor standards aren't anywhere close to the United States.
Why is it, then that the US phone is only $11 less? The hardware is cheaper, yes, shouldn't the gap in price be wider? IE, shouldn't the US phone be more expensive, and the Chinese phone be less expensive to manufacture? I just can't understand how the margin is this small.