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Manufacturing Sector Still Expanding but Losing Steam
October 01, 2015 1 min read 40 Comments
Some of the possible causes for a weaker reading are economic weakness around the world and a recent decision by China to devalue their currency. As the U.S. dollar gains strength and other countries devalue their currency it makes American made goods expensive to buy, thus hurting American manufacturer's exports.
The best way to improve the index that measures factory activity, improve our current economy, and create a strong foundation for the future, is to support American manufacturing by purchasing items that are Made in the USA. The United States of America is one of the largest consumer-driven economies, if we would start spending more of our money on USA Made items we could create millions of well paying jobs.
40 Responses
Daniel Beard
February 09, 2021
There is a town about 10 miles from where I live called Lumberton NC. If you would have went there 40 years ago you would have seen 40+ mills and manufacturing plants including Sara Lee, Converse, Burlington Mills, etc. If you were to go there today you would see many empty building’s and warehouses, where these companies used to be. The town has the highest crime rate in the state per capita, and one of the highest in the country. The town has a unemployment rate of probably half of the population.The town being right beside I 95 is a sad sight to see when driving by, all those empty buildings and poor people. So remember what your supporting when you buy items made in China and Bangladesh and other overseas countries, not only are you supporting slave labor but you are supporting increasing the poverty , unemployment and crime rates. Now let me get off my soap box.
Wanda
February 09, 2021
Maybe All American should expand their clothing line. Not everyone is looking for knit tops or jeans. Some people like items that are classic and dressy.
Johnie
February 09, 2021
Your not saving money buying cheap chinese garbage. Almost all products made in USA last 2 to 3 times longer.
Johnie
February 09, 2021
Free trade was the worst decision ever made. It only benefits the middle east.Vote for a Clinton and thats exactly what you’ll get!!!
Martha Stemberger
February 09, 2021
I know it costs more, but as long as the quality is the same, the ethical considerations justify buying goods made in the USA…or when that is not possible, at least buying from a country with fair labor practices, including a living wage and appropriate safety practices. I haven’t bought Chinese crap since I had to live there.
Also keep in mind, Chinese workers are dying making that garbage, while billionaires get rich exploiting them.
Own less. Own ethical.
Barney
February 09, 2021
Back in 1963, the day before JFK was assassinated in Dallas, Richard Nixon was in that same city, along with Don Kendall, the CEO of Pepsi. While some conspiracy theorists have suggested Nixon was there to set up the Kennedy killing, in fact this was really part of Nixon’s assassination of our middle class.
Today, America lost around 14 factories. In fact, as Thomas Heffner notes over at Economy in Crisis, we’re losing 14 factories a day, every day, and have been for decades. And it all started with Nixon.
In 1959, as Vice President, Nixon visited Russia to push Pepsi. We may never know what he got out of the deal personally, but he was there in Dallas in ’63 for Pepsi, and then went to China, presumably in part on behalf of Pepsi, in 1972 as President.
Just as he started our failed “War on Drugs,” Richard Nixon was also the godfather of our failed “Free Trade” policies, starting with China, which began sending us manufactured goods, while Pepsi was the first American product sold in China. While Nixon was probably paid handsomely by industry for this—we know of his bribe-taking from the dairy industry, for example—he tried to sell so-called “free trade” to us as a way of ending Communism in China.
As he wrote in his book Seize the Moment in 1992, “If we remain in China, we can play a critical role in helping the private economy gradually eclipse the state sector. In this respect, the most counterproductive thing we could do would be to revoke China’s most-favored-nation trade status. … If we want to have an impact on the changes occurring in China, we should not pull the plug on trade. Increasing economic progress will bring progress on human rights.”
Thus began the destruction of American manufacturing. And ironically, once again the “evils” of China are being evoked to push more of our factories out of the United States via the TPP, as President Obama recently told us that if we don’t “write the rules of trade” with Asia, “China will.”
It was a bad idea in 1972 when Nixon first started all this in a big way, and it’s a bad idea now. We’ve lost over 60,000 factories just since 2000.
Our $500 billion trade deficit is so bad that foreigners now own fully one-seventh of all assets in the United States and we’ve lost two-thirds of the factories we had when Nixon went to China.
Back in 1776, Adam Smith pointed out that what makes nations wealthy is manufacturing. We did manufacturing here in the US for about 200 years, and all that time the thing that kept manufacturing here in America was protectionist trade policies.
Barney
February 09, 2021
How Public Policy Crippled Manufacturing
Manufacturing executive Andrew Smith explains why health care and worker’s compensation are responsible for the industry’s decline.
By Brooke Berger April 4, 2013, at 9:15 a.m.
In its glory days, the manufacturing sector made up about one-third of the American economy. Today, just 10 percent of American workers work in manufacturing. In “Sand in the Gears: How Public Policy Has Crippled American Manufacturing,” Andrew Smith, a manufacturing executive, argues that health care and worker’s compensation are responsible for the industry’s decline. Smith recently spoke with U.S. News about the manufacturing sector, how public policy has failed, and what he says should be done to keep America competitive. Excerpts:
Who is to blame for the downfall of American manufacturing?
So the conventional wisdom about what happened to U.S. manufacturing is that companies in the U.S. went offshore to chase cheaper labor, lower operating costs and forces of globalization, which are emerging markets and supply chains developing in other parts of the world. These three factors contributed to the job loss, and that’s certainly true, but they don’t explain the entire story. The rest of the story is that we did this to ourselves. “Sand in the Gears” examines the tax system, the health care system, the legal system, the worker’s compensation programs, government regulations, and labor policy that together have created a hostile environment for manufacturers.
How do health care policies affect manufacturers?
Eighty percent of manufacturers offer health insurance to their employees, versus 50 percent for the rest of the economy. And 80 percent of those employees will take it up from their manufacturer employers, versus about 60 percent for the service sector. [American health care is] almost three times more costly than the OECD [Organisation for Economic Co-operation and Development] average. That creates a tremendous headwind for the cost structures of manufacturers. And under Obamacare it’s going to be worse. Spending is going to be worse; it’s going to get more expensive, not less costly, I predict.
What does this mean for U.S. competitiveness globally?
We’ve got the most expensive health care system in the world. We’ve allowed unions to exert destructive power over the workplace. We have excessive regulations at all levels of government, which are both costly and inefficient. Our tax system is dysfunctional and complex, and our disabilities systems are featherbedded, and they really have been used for purposes that do not relate to taking care of people who are truly disabled. Now the rest of the world is looking at the United States as not that fierce a competitor. They’ve been very successful in taking market share from us, and it’s because we allow these policies to develop.
Why is manufacturing important to the American economy?
National security is a key factor. Manufacturing has also been a driver of innovation and research and development, historically. Manufacturing has a very large multiplier effect. It has more linkages to other parts of the economy than any other sector that we can identify. Wherever you have strong manufacturers, you have prosperity. For many people, you can have a very good living without a college education by working in manufacturing.
What is the “new social compact”?
The new social compact is my [proposed] package of reforms. When I look across these policy areas, what joins them together is the fact that it’s all about taking care of people who are injured or sick. [The compact’s] central feature is to promote individually-owned, all-risk insurance products for every citizen that would cover all injuries, all illnesses, even death from whatever cause, wherever it occurs. This insurance would be funded by the government by means of a fixed subsidy or fixed credit, which allows market forces to work. And as a result you wouldn’t need numerous existing programs.
How would the social compact be funded?
I propose eliminating the current income tax system and replacing it in its entirety with the value-added tax. Economists have studied this, and they estimate that we would have approximately $1 trillion a year more in economic output if we used a consumption tax like the VAT instead of the income tax system, which is what we have.
Will American manufacturing ever get back to its glory days? Should it?
In the glory days, [manufacturing] was about a third of our economy, both in output and in workforce, and it’s unlikely that we will return to that. In about 1980 we had 21 million jobs in manufacturing. And today, even with the substantial recovery since the bottom of the meltdown period, we’re only at 12 million. We’ve really got an interlocking series of policies that have created huge headwinds for the manufacturing sector. And, if we care about manufacturing, and I think we should, then we’ve got to address all these areas at once.
Joseph dancers
February 09, 2021
I am a middelClass wage earner. The products that are made in my company are sold and distributed around America. Products that people use each and every day. I am Resolving to only purchase clothing and products that are made in America. Because without people like me There will not be jobs for people like me.
Dave Harduby
February 09, 2021
You are so nieve. Every time you buy at Walmart and offshore made products you are exporting more American jobs. What are you going to do if your job gets eliminated.
Michael Van Allen
February 09, 2021
I am a very strong believer in purchasing American made clothing, motor vehicles, and household items and anything else that I need as an American consumer. A person has to carefully examine labels on products for the “Made in U.S.A.”. I have found brand name candy that in years past was American Made now manufactured in Mexico. I turned down Colgate brand toothpaste because it was made in Mexico. Even large appliances are starting to be made outside of the United States of America. The American economy will improve if American consumers purchase more and more high quality American made products.
Bryan
February 09, 2021
I live in South Carolina. I see huge factories and mills that have been closed down and vacated all over the place. Clothing and otherwise. They are now ghost towns. These job loses are real and if you think the cost of buying America is expensive now, wait till you have no job to buy those goods with. There is much more at stake here than saving a few dollars here and there. Our way of life is at stake. That’s the true cost. I’ll pay three times as much for something Made in America if it means that my kids don’t have to grow up in a wasteland of forgotten hopes and dreams. That’s the reality.
Mamac
February 09, 2021
Your reply is an oxymoron. If you expect to be paid more yourself to work in America, you better be prepared to pay more on the American made product. Your actions are the EXACT reason why China’s economy and work force is booming, while ours is dead. When you buy cheap clothes, low wages are paid to the people who make them. You must begin by choosing quality over quantity and reprogramming your spending habits. There are many things we all can cut back on and do away with completely to balance the buck.
Mamac
February 09, 2021
I agree with your post… except for your reasoning for the housing market collapse. I am a home builder. Or I should say “was” a successful home builder for 21 years.
When the big banks crashed (Fannie and Freddie) in 2007/08, they were given a free bailout from the government. However, after that very month, they changed lending policies across the board for new home construction. They felt it was “too much of a risk”.
Before the crisis banks lent funds for new construction to homeowners with little money down on a draw system, payable in phases of the project. That stopped completely. 40% down is the new standard for homeowners and builders paying out of pocket for the project until completion. This new policy put builders under and homeowners out. Only massive corporate building contractors are left standing across America.
Many people can’t see how or why the ecomomic crisis is relatable to the new housing crash. But, this happened and these new policies have continued to affect our market today. Just look at the materials and labor that is associated with everything in a home. It’s endless. From the shingles, to the lumber, to the plumbing, wiring, carpet, glass, wood, stone, metals, plastics, and so on : the products and labor is boggling.
Mamac
February 09, 2021
Watch and recommend the documentary “The True Cost” it’s fantastic. (Netflix) if u don’t buy American made now, u will.
Mikel
February 09, 2021
Be American – buy American.
B Propes Delaware
February 09, 2021
I’ve bought many products from AllAmerican Clothing. Quality products that last a long time!
Wolfgang
February 09, 2021
It’s quite simple. If you have one person working he pays all the taxes. If you have two persons working they split the Taxes.The more people we put to work causes our share of taxes to reduce. With taxes reduced we have more in our pocket. Was putting an unemployed person to work we also reduce the amount we pay into welfare. Which causes more money into our pockets. We bought an American made product it’s at least four times better than any product Bought from overseas. My dad always said take care of your own first then take care of others. Ime to make America better buy American products. Yes Walmart sells those para pants for 10 box but they buy them for less than $.50 a pair and the money doesn’t go to the workers it goes the family it’s time we start taking back America. I think what I’m saying is I’d rather have quality over quantity
Mags
February 09, 2021
My response to “I can’t afford to buy American” is simply “How can you afford not to buy American?” Every dollar spent on cheap foreign merchandise is a dollar looted from our Country, and a dollar stolen from your paycheck.
Free Trade was never about ‘free trade,’ but rather about picking the worker’s pockets. How do we know? Because despite a free trade agreement with every nickle and dime nation, we still don’t have FTA’s with the EU, which offers wages and benefits comperable to our own.
My research indicates that the first FTA was created by Reagan with Israel. Then George Herbert Walker Bush negotiated NAFTA with Canada and Mexico. Ross Perot stood up and told us Free Trade was like pulling the plug on America. We ignored him and Bill Clinton signed NAFTA. George W Bush then negotiated 21 FTA’s with all comers without protections for the USA. Millions of jobs were offshored and our economy was so weakened that we could not withstand the housing bubble. Barak Obama has done at least 1 FTA and now Obama wants to sign the TPP and the TIPP which involve 40% of the world economy. Globally, other 1st World Countries have expressed grave doubts as to the efficacy of the TPP. I have just read an analysis that the TPP can be expected to give negligible growth to the US economy of only 0.05% by 2030 but will continue to offshore well paying US jobs.
We cannot continue to loot America’s wealth to line the pockets of a few. Patrick J. Buchanan argues that the concept of Free Trade destroyed the British Empire when put into practice there in the 1800’s there, and it is destroying the USA today. Those who acquiesce, those who encourage free trade by buying imported goods made without safety or environmental regulations and by child/ slave/ prisoner labor or by workers who wirk 12-16 hour days and live in barracks or shacks are modern American Traitors.
Drag-N-Fly
February 09, 2021
Jim I refer to Wal-Mart stores as China town !!! And Wal-Mart Distribution Centers as China IIII
Nate
February 09, 2021
Well said!!
Pierre
February 09, 2021
All I am hearing/reading is “I.”
Stop buying slave labor made crap. Enough people like you are making America a third world nation.
bob niles plumbers local 12 boston
February 09, 2021
If a man came on TV and said,“My name is John Doe. I own a clothing manufacturing business. All my materials are American made, all my employees get good wages, good benefits, health care and vacation time. Because of this, I need to charge a more for my product than Walmart does. Please buy my product.” I would be thrilled to patronize this all American business.
Think America's Future
February 09, 2021
But buying foreign made goods isn’t putting people to work here in America it is putting other countries to work and sending all of our hard earned money over seas destroying us in the process. Not only that but the goods you get from other countries does not have the quality that goods made in America has. I know that for a fact, for I am still wearing t-shirts made here twenty years ago and those made overseas are lasting maybe three to four years. So people just keep giving your money to foreigners and just wait and see who will own our country and be telling you what you can and can’t do. From a person who is trying to do there part in keeping our people employed and my money at home where it needs to be. Because people out there we are doomed if our country and people don’t change there way of supporting there own economy and welfare because Countries like China will be telling us all how to Live. the way I see it we are headed fast in that direction because of our Countries debt.
R . Coppock
February 09, 2021
Don’t wait for TV! We are here! You have to look!
But American Manufacturing is returning!
Loring
February 09, 2021
Our NATION was STRONG when our UNIONS were strong GO TEAMSTERS !!!!!
Corky Shaw
February 09, 2021
When buying American you are not only supporting your country you are supporting the future. American made products are proven to have better quality and manufacturing plants are not working their employees to death, literally. If you care for your children and grandchildren you will buy American, even if it means buying less.
Harvey Williamson
February 09, 2021
Harvey,
Not knock religion, but a large amount of people’s incomes are used to build communal institutions that promise pie in the sky.
Kenny Marshall
February 09, 2021
I grew up at a time when my family would not buy anything unless it had a Union Label attached to the product, They were not hard to find at the time. Now my family looks for American Made. We used to have so many well paying union jobs in this country, it’s high point was of course in the 50’s when the entire country was enjoying life, and most people could afford to buy a house.By the way most husbands were the only ones that were required to have a job to support the family. It is not that American Workers pay is out of line, it’s the greed at the top of the corporations. The people at the top now need to have hotel size homes and a few hundred luxury cars. If we buy American, that creates jobs which adds to the tax base and a more prosperous country from the bottom to the top. It’s my opinion that if you think it’s so great to buy from companies that use slave / sweat shop labor, why not move to one of these countries and get a job there.
Jim jones usa
February 09, 2021
It bothers me to see all these so called religious people run to Walmart and other business to support a communist country that do,not believe in GOD, very sad, wake up .
Spike Cutler
February 09, 2021
The price of the All-American jeans is low in relation to the quality of the product; they are, in every tangible respect, better-made and will simply last longer. Every detail reflects this. Buy a pair, compare to ill-fitting jeans from Malaysia or China (and those always seem to have a stank to ’em, too). Buy better, buy once.
It’s worth it!
Dan Connelly
February 09, 2021
If you looked at the label, the items that were astronomicaly priced in the department store where probably made overseas as well. Buy a good pair of, let’s say American shoes. They will cost you three or four times as much as the Jonke and Walmart or Kmart, but they will last you 10 times longer. There is value in purchasing American-made products. Don’t just look at the price tag. Think of the quality.
Bill
February 09, 2021
If you are purchasing poorly made products for $10-$15 cheaper, but have to buy 4x’s as often are you really getting a bargain?
Think before you buy
February 09, 2021
This mentally is the genesis and mindset of the problem with our economy. When someone buys a product at WalMart, Hobby Lobby, even Chinese made Home Depot products it puts American workers out of jobs. So this short sided mentally, saves money on a cheap product which will have to be bought over and over, puts your neighbor out of a job and increase taxes due to higher unemployment and loss of healthcare. It is termed the WalMart cycle because as more people do it, more people “have” to do it if they want a product and thus continues the issue.
Brian Yockman
February 09, 2021
If you want American made,you gotta buy American made.They are by far,a better made product,and we keep the jobs here.End of story.
Glen Hardy
February 09, 2021
You are part of the problem this American has. I INSIST on buying American Made if I can find it! My problem IS locating it locally. I have to shop online most of the time because Madera, Ca, merchants will not look for American made products to carry. You buy items in Walmart but you do care that the person that made those clothes is getting paid far less than you would except for a wage? I shop for clothes mostly at “all american clothing dot com”! I buy socks from them, long-sleeved & short-sleeved T-shirts, etc. my patriotism runs deep. I want ALL Americans employed, to include you, so I buy American-made! Please think about it. . . . . . . then look around.
John M.
February 09, 2021
If you buy from Wal-mart, you can’t really complain that things are the way they are in the USA. Support places such as All American Clothing and things will work out naturally.
Michael a
February 09, 2021
I love my country. That country is America.The money that I spend on American made products support Americas military. The dollars that I send to the peoples republic of china supports that military, A military that is openly hostile towards the United States. while we are not yet at war with china you would not know it from their actions. My grand daughter and my grandson are in the United State Navy and I will do everything I can to not send one dollar to china to give them the weapons to kill them. And not just my children but yours too. Freedom isn’t free you fight and pay for it or you lose it.
JTC
February 09, 2021
It is a crime that this country that was founded with tariffs, allows its workers to now compete directly with people making less than 10% of American wages/ benefits in the name of “Free Trade.”
Judy (no dot) Turner
February 09, 2021
If products made in America weren’t so expensive, I probably would buy more American made products but when I can get a pair of jeans for my grandsons for around anywhere from $10 to $15 less per pair, I can buy two pair when I would only have bought one, thus giving another grandson a pair of jeans. Since they wear uniforms to school, they don’t wear out as quickly and as often as my sons’ jeans wore out when they were in school. Just like last week, I went to a large deparment store to buy a pair of sweat pants and a sweat shirt and the prices were astronomical! I went to Wal-Mart and got three sweat shirts and three pair of sweat pants for the price of one in a large department store. Cost matters most to me because I am not a high wage earner, although the wages I earn now are higher than they used to be. I have to save money every way I can and I cannot justify spending more just because it was made in America.
Jim jones
February 09, 2021
You need to live in the country you support, that kind of attitude is what destroys this country, you keep buying foreign junk made with child labor will someday be the wages those grandsons will be earning in America, because the communist Chinese government will own this great country. Why support a country that won’t let their people own a bible, and worship GOD.