Monday, August 19, 2013

Why "Made in the USA" matters

Sure, most of us support the idea of products being "made in the USA" but often the added cost of products made by US workers is hard to justify when a similar product made in China or a third world country is temptingly cheaper. The argument for Made in the USA is much more nuanced than price and feel-good fuzzies, however, and has direct economic links back to each and every one of us.

Let's start with the obvious first benefit: US jobs. Yes, workers here are earning a wage that is spent locally supporting area businesses and services such as the one you own or work for. Their taxes support your roads, schools, police force etc. But it's not just the workers. There are many suppliers: vendors, distributors, technicians, and even other manufacturers in the USA who are dependent on the business they get from US manufacturers. When I produce my clothing I buy from vendors all throughout the US, many of whom have struggled to stay afloat after the exodus of apparel manufacturing to China and other countries. Their money, in turn, goes to support their local businesses and municipalities.

Why does it cost more to produce in the US? US manufacturers are held to laws and regulations that protect consumers and workers but add a tremendous cost to doing business. Higher wages, liability insurance, workers comp, OSHA, licenses, health benefits, federal & state taxes, Social Security & Medicare taxes, etc are all designed to protect workers and the general public from fraud and the expense of treating injury to workers in the quest to earn money. Remember the recent scourge of fatalities in Bangladesh? Lead poisoning from China? All of these are just recent examples of unregulated greed at the public's expense. Had this happened in America, all the workers medical expenses would have to be absorbed by the public in some way, shape or form, and the surviving dependents would be drawing Social Security benefits until they came of age.

It's not that all outsourcing is bad, really. To some extent the inter-dependency this has created is, by default, our greatest incentive for peace, but the lopsided scale has been overwhelmingly to our deficit. Try finding any products made in the USA at any big box retailer these days. Go to Walmart, Target, Home Depot, or Lowes and it is highly unlikely you can find a domestically produced product amidst the sea of cheap foreign imports.

What has the loss of US manufacturing jobs meant? It means we are no longer the self-reliant country we once prided ourselves on being. It means we have lost control over critical aspects that affect our very health and safety: food production & processing, pharmaceutical components, lead in paint, toxic metals, and other ingredients recently discovered in tainted products made abroad for our consumption. It means a brain drain. It is exponentially more difficult for many industries to ramp up in the US now even if they wanted to because our knowledge base is gone. The exodus in manufacturing started more than 20 years ago. At that time, the workers who were at their prime of knowledge and experience were in their 40's. This means that by now most of them have retired and there is no one to replace them as young people needing to earn a living chose not to enter a dying field. Many industrial manufacturing jobs were reasonably well-paying jobs that were available without a higher education and allowed for a livable wage at which workers could support their families. Those jobs have been replaced with low-wage service jobs that often required taking both parents out of the home and working 2 jobs and odd hours just to make ends meet. As a result, more kids were left with less supervision as their parents picked up shift work. The rising crime rates and gang activities have a direct link to this lack of family stability. Lower paid workers, in turn have needed to rely more on government assistance to make ends meet, and many are uninsured, driving up costs for society at large. Cities and small towns across our country have been left in shambles by the systematic closing of one manufacturing plant after another - with their tax base depleted and their prime work force gone.  The list goes on and on but the math brings you back full circle to the realization that every dollar you "save" on a cheaper foreign made product may well prove so much costlier in the end.