The Case for Reshoring: Bringing Quality Manufacturing Jobs to USA
Good news for U.S. manufacturers: stateside production and employment opportunities are on the rise.
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American Made: What is it & Why It Matters
Historically there has been a lot of hype around the American-made topic, but there is a heightened awareness in recent years, which has drawn more attention to this subject now more than ever. This is primarily due to reshoring by major manufacturers, the US Government with SelectUSA and STEM programs, and all of the issues we face with counterfeiting and sub-par products.
Almost every day, I find an article or a label that says, “Made in USA” or “American made.” Products I see with the Made in USA label range anywhere from batteries, hand tools, and hardware, to outdoor furniture and household appliances, to groceries and dog food — not to mention the Made in USA mandate for many government-driven programs. This is similar to every time I communicate with my wife and kids because whenever there is a lot of talk, there are also a lot of misunderstandings, misstatements, and misconceptions.
Related: Buying American Made: Ways To Express Your Values with Your Pocket Book
What exactly is American-made, and why does it matter?
If we want to get technical, American-made can mean many things. Is it South American-made? North American-made? Is it made in Mexico? What is it?
What exactly is Made in USA?
According to the Federal Trade Commission, a product is made in the USA if it is “all or virtually all” made in the USA. What does “all or virtually all” mean? That phrase “means that all significant parts and processing that go into the product must be of US origin. That is, the product should contain no — or negligible — foreign content.” My interpretation is that, most importantly, you be honest. Say so if it is made in the USA with domestic and imported components. Say so if it is manufactured in the USA and packaged in Mexico. Say so if it is designed and assembled in the USA but manufactured in China.
Now on to the heart of the subject, why does it matter? Why should I care? I want the best price … It matters more than we accept.
RELATED: If you are a manufacturer, a service provider, a producer of goods, or if you employ American citizens and are creating jobs, find out how a MAM partnership will help you
Why it matters
- The manufacturing powerhouse After WWII, the US was almost 50% of the global economy, bringing manufacturing to its peak. We produced 80% of the world’s automobiles during America’s manufacturing peak. Almost all of the products we used were manufactured in the US. We manufactured steel, textiles, furniture, planes, appliances, and shoes, to name a few. Well, since 2001, more than 56,000 factories have left the US. Now, I am not suggesting every single product we use needs to be manufactured here in the US, but we need to be and remain the world’s manufacturing powerhouse.
- Manufacturing employs people — At its height, US manufacturing employed more than 19 million people. Over the last couple of decades, along with losing our factories, we have lost our jobs. According to the National Association of Manufacturers (NAM) and the Bureau of Labor Statistics (BLS), manufacturing in the US currently employs just over 12 million people. Although losing more than 7 million jobs is alarming, what is more alarming is that, unlike the service sector, for every manufacturing job, there are approximately 1.6 jobs created. For example, in The American-Made Movie, we see the Louisville Slugger, an American-made product supporting a great American tradition. To create one baseball bat, there are loggers to cut trees, truck drivers to deliver them to the mill, mill workers to create billets, truck drivers to deliver them to the factory to manufacture the bats, marketers to market them, and retailers to sell them. Manufacturing employs people.
- Manufacturing keeps the US competitive — According to the NAM review of National Science Foundation reports, manufacturers in the US perform two-thirds of all private sector R&D in the nation, driving more innovation than any other sector. Our engineers, techs, and science professionals keep us abreast of technological advancements and developments.
What are your thoughts? Does it matter to you? Does it matter enough to consider a change? Let us know in the comments below.
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Manufacturing Day Highlights Opportunities to Bolster US Manufacturing
“American manufacturing is back!” breathlessly exclaim the ebullient cheerleaders in locales such as Forbes and the Boston Consulting Group. But while U.S. manufacturing may have bounced back slightly from Great Recession-lows, the reality is that America’s manufacturing recovery remains tenuous. On this National Manufacturing Day, policymakers can and should be doing much more to stimulate the growth and competitiveness of America’s manufacturing economy. Read more
Chair Pad Manufacturer Earns Made in USA CERTIFIED® Seal
CERTIFIED, Inc. (madeinusa.net), the nation’s leading independent, non-governmental organization (NGO) certification company Made in USA claims, reported today that KLEAR VU CORPORATION of Fall River, Massachusetts has earned a Made in USA CERTIFIED® Seal for its quality Delightfill® chair pad and chair pad gripper line, fully documenting these products comply with the qualification and quantification that all or virtually all of the product components originate in the United States. Read more
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Check Out New Balance’s Latest ‘Made in the USA’ Sneaker Collections
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The Case for ‘Made in America’
It’s about pride in what we do, not about protectionism. BY MARK DWIGHT
The Case for ‘Made in America’
I proudly add the “Made in USA” label to every product I manufacture in my San Francisco factory. Making bags in this country is fundamentally important to me and to my company–but maybe not for the reasons you think.
Here at Rickshaw Bagworks, making our own products celebrates our passion for making things, not a protest of outsourcing or offshoring. I’m not a protectionist, and I’m not a Made-in-America zealot. We live in the modern global economy–I get it. In fact, my original plan was to import partially made bags from China and do only the final assembly in our shop.
But, alas, I’m a stubborn maker at heart. We soon found ourselves designing products we could produce from scratch in our own factory and getting excellent customer feedback for our made-in-San-Francisco goods. So we encouraged letting our manufacturing story be our crucial point of differentiation: We don’t just design what we sell; we make what we sell.
That’s always been my true love. In high school, I took wood and metal shop classes and started my own stained glass business, crafting windows, lampshades, and terrariums for my parents’ friends. Then I headed off to college, got a degree in engineering, and started working in Silicon Valley. My crafting days were over–or so it seemed. Twenty years later, I entered the bag-making business and reconnected with my dormant passion for making things. As fate would have it, that happened at a time and in a place particularly challenging for makers–but also full of opportunity.
Photo Credit: Rickshaw Bagworks
We live in an age when production is more often than not outsourced to anonymous contract manufacturers, predominantly in low-cost labor markets. There are good reasons for that and some horrific and well-publicized downsides. Though economies of scale and low-cost labor have yielded tremendous cost savings for consumers, it seems we may be approaching the limits of this business model, especially after factory disasters abroad have focused more attention on the poor working conditions and environmental impact of these practices. A small but growing group of “conscious consumers” care about the who, what, why, where, and how behind the products they buy. These customers want to connect with the companies they purchase goods from and share their enthusiasm with others like themselves.
So, does it really matter where it’s made? Yes, and no. I believe it’s less about precisely where we manufacture–though San Francisco has fabulous geographic cachet–than about making our own products in our own factory under our own brand name. It’s about connection and accountability–knowing and dealing directly with the maker and trusting the brand. Here at Rickshaw, we design and make what we sell. We own it. The buck starts and stops right here. Making what we sell is our primary differentiator. “Made in USA” is the where of our brand story.
Photo Credit: Rickshaw Bagworks
As a conscious consumer, I’m concerned about the environmental and social justice issues of manufacturing in less-developed, poorly regulated countries. As a maker, I’m optimistic that there’s a promising future for small-scale, innovative specialty manufacturing in America. In my bags, those “Made in USA” labels are shorthand for “quality products, made with integrity by a company that’s accountable and that cares for its employees, customers, business partners, and community, and for our shared planet.”
This is not something that’s exclusively American. Nor is it universally American. But I like to think it’s fundamentally American.
Photo Credit: Rickshaw Bagworks
FROM THE NOVEMBER 2014 ISSUE OF INC. MAGAZINE
Mark Dwight foundedhttps://www.rickshawbags.com/ Rickshaw Bagworks, a San Francisco maker of custom bags, and SF Made, a nonprofit focused on building the city’s manufacturing sector.
“MADE IN USA” CLAIMS TRICKY FOR RECYCLED MATERIALS
Manufacturers of products made with recycled materials can’t claim offerings were “Made In USA” unless they can show that the materials originated domestically, according to the Federal Trade Commission (FTC) making it the “Made in USA” claims tricky for recycled materials. Read more
‘Made in USA’ True Again
A number of positive factors came to light in April to give credence to the fact that the U.S. manufacturing sector, which has been subject to severe attrition since the early 1980s, is rebounding impressively.
Since that time, manufacturing, in concert with construction, had been a major mainstay of America’s solid economic underpinnings, with their combined workforces providing employment for a sixth of the U.S. workforce. But in the wake of major sectors such as textiles, leather goods, electronics and transportation vehicles (cars and airplanes), as well as industrial equipment, heading overseas, those employed in the hands-on industrial arena have been cut almost in half.This was particularly the case with conglomerates and major publicly held corporations lured by the low-cost manufacturing opportunities, first in Japan, and subsequently in most of developing Southeast Asia. But up-to-date information released lately by industrial sector analysts indicates that this decades-long period of attrition may now be in sharp reversal. The following salient factors make this case, even though still in its early stages:
- Of the world’s 25 leading global industrialized nations, the U.S. ranks No. 8 in overall productivity and cost-effectiveness.
- A combination of the accelerating natural gas expansion, and record domestic oil production, coupled with dormant employment costs, and contributary technological production improvements, has given America’s overall cost effectiveness a new lease on life.
- With the U.S. export sector reaching a peak among world leaders China, Japan, Germany, the U.S. brand-name quality reputation has created a preference, even among export-oriented nations in Southeast Asia that are in various stages of consumer demand development.
- Although in the early stages of reversion to American shores, this return to U.S. production is starting to make itself felt among major corporate chemical manufacturers, benefited by the nation’s lowest global cost of natural gas, a major resource for this sector.
Also beneficial to U.S. domestic user and consumer demand requirements are the rising costs incurred by labor and management in China, and to a lesser extent in other dynamic manufacturing sector nations such as Taiwan, Vietnam, India, Bangladesh and Indonesia.
This redounds to the benefit of America’s manufacturers, not only in shrinking costs, but lessening the need of huge advance orders to get the best price from foreign exporters. Also, the ability of domestic U.S. manufacturers through its distribution, to keep inventories current, without overburdening supply, definitely tilts the advantage increasingly to the domestic industrial manufacturing sector.
Although this obvious rebound of the U.S.A.’s industrial sector benefits the American economy as a whole, it probably will do little to alleviate the chronic unemployment, as tightening government regulations and advanced tech, plus increased use of part-time workers do not translate into a torrent of substantial additional production employees.
Morris R. Beschloss writes a regular blog at www.desertsun.com/beschloss and a column that can be found Sunday in The Desert Sun.
What do you think?
Do you agree or disagree with Morris Beschloss? Let us know via comments below.
SOURCE: The Desert Sun