Can Americans Afford ‘Made in the USA?’
Of course not everyone can afford American-made goods. U.S. consumer spending fell in April for the first time in almost a year, as personal income growth was flat. But attitudes are changing.
Earlier this year, Walmart announced it will boost sourcing of U.S. products. And more American and Chinese consumers are willing to pay a 10 percent to 60 percent premium for “Made in USA” goods, according to BCG research released last fall.
Meanwhile, a shift in manufacturing away from China will begin to take hold around 2015, according to BCG forecasts. Rising labor prices there will create a ripple effect.
Certain industries—in which labor is a lower percentage of total product costs—are more likely to pack up overseas for North America, including Mexico, where labor costs are stable. Product categories likely to reshore first include appliances and electronics, transportation, machinery, plastics, furniture and chemicals, BCG’s Sirkin said.
But as the global economy evolves and shakes out new winners and losers, consumers are connecting the dots between inexpensive, overseas goods and evaporating U.S. jobs.
The recession has been especially brutal on chronically out-of-work or underemployed Americans. Unemployment that counts the discouraged and underemployed, sometimes called the “real” jobless rate, is still above 10 percent in many states.
“People used to thumb their nose at manufacturing jobs,” said Unionwear’s Cahn. But when the recession gripped the U.S. and the manufacturing sector was among the first to stand up and create jobs, many gave the sector a another look.
“As a country we can’t all be servicing each other,” Cahn said. “You have to have manufacturing.”
—By CNBC’s Heesun Wee; Follow her on Twitter @heesunwee
Source Article from http://www.cnbc.com/id/100610061
