The Presidential candidates have been arguing about the greatness of America, our standing as a world leader and what needs to be done to strengthen the nation on a number of fronts.
I’ll tell you straight away that I’m not here to attack or defend, persuade or dissuade, or even state a position necessarily. I’m here to pose some questions and make observations about “Made in the USA” and how it seems to mean more to those outside our borders than within.
A U.S. maker of jeans and a member of America Made Matters said that his company does 20 times more business in Tokyo, a city of 13.5 million people, than it does in the U.S. with a population of 323 million, because the Japanese consumer values Americanmade quality and pays more for U.S.-made products.
If Japanese consumers (and doubtless those in other countries) value goods made by Americans, why don’t Americans? Why do we complain “they don’t make things like they used to” and then go right out and buy cheap products made in ____?
The Reshoring Initative has said that “the bleeding of American manufacturing jobs has stopped,” and its data shows that in the past decade new offshoring has decreased 75% while new reshoring and FDI (foreign direct investment) has increased 400%.
Hemorrhaging halted gives us a moment to wipe the sweat from our brow, but how to rebound is an arduous task with a long road fraught with debate and conflict, unfortunately mired in politics and policies that stall growth of American business. Perhaps the most daunting problem is the lack of skilled labor in the U.S.
According to the 2015 Manufacturing Institute/Deloitte Skills Gap Report, there will be an estimated 3.5 million manufacturing jobs over the next 10 years, but 2 million of those may go unfilled due to the skilled labor gap.
In January, F/T spotlighted our current predicament after a decade of offshoring. While it’s easy to blame companies that sent jobs overseas, it’s often overlooked that societal and educational forces played a part in the devaluing of the American workforce.
At least one generation of adults has been guilty of telling our youth that manufacturing jobs are low paying and lower class. In Europe, educating young people includes teaching them that there is more than one path to career and success, and having a trade/vocation is no less important than having a university degree.
Let’s get real. A four-year college is not for everyone.
Recently, F/T asked the industry about the future of furniture sourcing. An underlying question was whether China might be losing its strong grip in that arena. While there were many takeaways from the reports, my conclusion is that China is not losing ground despite the many challenges of doing business there, among them rising labor costs.
Even so, Chinese factory workers make about one-quarter of what Americans do, according to The Economist. What’s more, labor productivity there increased by 11% a year from 2007 to 2012 — several points higher than in Thailand and Indonesia — and Chinese factories are just starting to invest in automation, which will only increase productivity.
Certainly automation is more limited in furniture manufacturing than in other products, but if China can identify where it needs to focus its efforts to remain competitive while its labor force can earn progressively higher wages, why can’t the U.S.?
Let’s face facts. Collectively, American businesses and manufacturers have the clout to bring about policy and regulatory change, so the question is: How much do Americans value Made in the USA?
On Labor Day, we can take a moment to consider the spirit of the holiday that was first celebrated during our industrial strength, or we can take a moment of silence to mourn its passing.
