(MoneyWatch) COMMENTARY
The net loss of manufacturing jobs from the U.S. to China may have finally come to an end, according to a study by strategy and operations consultancy The Hackett Group. And because of changing conditions in the U.S. and Chinese labor markets, the net shift of jobs may move back to domestic facilities.
The net loss of manufacturing jobs from the U.S. to China may have finally come to an end, according to a study by strategy and operations consultancy The Hackett Group. And because of changing conditions in the U.S. and Chinese labor markets, the net shift of jobs may move back to domestic facilities.
However, there’s bad news as well. The number of manufacturing jobs in the U.S. is unlikely to ever return to former levels, and service jobs will continue to move offshore for years to come until there are simply no more left to send.
The reason manufacturing jobs moved to China from the U.S. in the first place was because of money. It simply cost less to make products there than here. Even though shipping goods back thousands of miles was expensive and there were the accompanying expenses of carrying the two months of inventory that would take 60 days or more to make the journey, lower costs of labor and materials more than made up the additional expenses.
The so-called “total landed costs” that take into account every expense occurred was lower for Chinese-manufactured goods. According to Hackett chief research officer Michel Janssen, products from China were 35 percent cheaper in 2005 than the American equivalent.
Times have changed. Because of domestic unrest and unfavorable publicity like the focus on labor conditions in Apple’s outsourced factories, salaries have risen in China. Rising oil prices have contributed to more expensive transportation costs. Some manufacturers have begun to bring jobs back to the U.S.
The reason manufacturing jobs moved to China from the U.S. in the first place was because of money. It simply cost less to make products there than here. Even though shipping goods back thousands of miles was expensive and there were the accompanying expenses of carrying the two months of inventory that would take 60 days or more to make the journey, lower costs of labor and materials more than made up the additional expenses.
The so-called “total landed costs” that take into account every expense occurred was lower for Chinese-manufactured goods. According to Hackett chief research officer Michel Janssen, products from China were 35 percent cheaper in 2005 than the American equivalent.
Times have changed. Because of domestic unrest and unfavorable publicity like the focus on labor conditions in Apple’s outsourced factories, salaries have risen in China. Rising oil prices have contributed to more expensive transportation costs. Some manufacturers have begun to bring jobs back to the U.S.
“For a long time we’ve been losing jobs,” Janssen says. “Now we’re reaching a point I call net zero.” That is, the number of manufacturing jobs returning has finally balanced the ones leaving.
A tipping point
“The expectations are that by 2013, [the difference in landed costs] will be 16 percent,” Janssen says. Coincidentally, 16 percent is the threshold at which U.S. companies say that they would consider moving manufacturing jobs out of China, according to a Hackett survey of major corporations. The chances are that within a few years, the U.S. could see a net gain in manufacturing jobs.
However, there are significant downsides to the news. One is that jobs won’t return in the same volume. U.S. manufacturers have continued to use technology to make factories more efficient and the jobs that return will likely be to highly automated facilities that don’t need as many people as they once might have.
Also, not all the jobs that are “reshored” will return. Many that depend on lower cost wages and other manufacturing expenses will move to other areas in Asia like Vietnam, South Asia locations like India, and even South America. Also, the move to the U.S. depends on the “implicit deflation in wages here,” Jenssen says. So even if jobs that were once well-paying with good benefits return, they may offer significantly less to workers.
Services still hurting
The change in manufacturing jobs has had no impact on the move of service jobs in accounting, IT, human resources, customer service, technical support, and similar areas. According to another Hackett study, the net number of general and administrative overhead service jobs moving out of the U.S. this year will likely hit 285,000, continuing a long-standing trend.
But by 2016, the number of service jobs that companies could outsource will have dropped to a million. “We’re not going to run out of labor arbitrage opportunities. We just run out of low cost jobs to move,” Jenssen says.
SOURCE: CBS News
We’re all aware of how critical manufacturing has been to the U.S. economy over the past several decades. Most of us are equally aware that it still plays a huge role. But do you realize how big a role it still plays?
If you add up all the offshoring that took place over the past two decades and subtract some portion of that to account for the decent stream of re-shoring that’s been going over the past few years, what do you have?
I don’t know either, but I do know that accounting for the current value of manufacturing in terms of past offshoring and recent re-shoring is a difficult, if not impossible, task. Regardless, that’s exactly what many discussions on the state manufacturing in the U.S. are based.
A more dependable estimate of the value of manufacturing to the U.S. economy is data from the U.S. Census Bureau, which recently released some new data from its 2011 County Business Patterns and Survey of Manufacturers projects.
I don’t know either, but I do know that accounting for the current value of manufacturing in terms of past offshoring and recent re-shoring is a difficult, if not impossible, task. Regardless, that’s exactly what many discussions on the state manufacturing in the U.S. are based.
A more dependable estimate of the value of manufacturing to the U.S. economy is data from the U.S. Census Bureau, which recently released some new data from its 2011 County Business Patterns and Survey of Manufacturers projects.
The first thing I found interesting in this release is that number of manufacturing facilities in the U.S. still hovers around 300,000 — which is pretty much where it was in 1990. While it’s clear that offshoring impacted millions of jobs and lead to the shut down of numerous manufacturing facilities, the overall number of manufacturing facilities in the U.S. has remained fairly stable over the past 20 years. Some will argue that this number should have grown significantly if it weren’t for all the offshoring, but what happened happened. What’s important now is the current state of the industry and forward-looking trends.
While it’s clear that offshoring impacted millions of jobs and lead to the shut down of numerous manufacturing facilities, the overall number of manufacturing facilities in the U.S. has remained fairly stable over the past 20 years.
Looking at some of the key figures reported in the Census Bureau’s release, manufacturing is currently the fourth largest employer in the U.S., employing 11 million people. This means that manufacturing trails only healthcare, retail and hotel/food services industries in terms of employment.
The average annual salary of a U.S. manufacturing worker was $52,300 in 2012—27 percent higher than the average U.S. worker’s salary in 2011 (which was $41,211 in 2011, according to the Social Security Administration).
Considering the importance of exports to the economy, it’s notable that manufacturing still accounts for more than half of our export dollars—6 in 10 of U.S. export dollars were generated by manufacturing in 2011.
Of course, exporting is only half the economic equation, with consumption being the other half. According to the 2011 Annual Survey of Manufacturers, U.S. manufacturers spent $3.2 trillion on materials in addition to spending $147 billion on capital expenditures.
Sectors of the manufacturing industry that are performing the best, in terms of shipment value, are: petroleum and coal products ($837 billion), chemical ($777 billion), food ($710 billion), and transportation equipment ($690 billion). From there, the size of the industry sectors, in terms of shipments, are considerably smaller, with the next category—machinery—clocking in with $366 billion in shipments, about half of the shipment value total of the equipment sector.
In terms of energy management, data from the 2011 Annual Survey of Manufacturers shows that manufacturers—the largest industrial consumers of energy—are getting more savvy about generating power and making money from it. According to the survey, manufacturers generated 119 billion kilowatt hours of energy and sold nearly 35 billion kilowatt hours of energy.
All in all, it seems like the increasing focus put on U.S. manufacturing over the past several years by both entrepreneurs and government looks to be paying off.
The average annual salary of a U.S. manufacturing worker was $52,300 in 2012—27 percent higher than the average U.S. worker’s salary in 2011 (which was $41,211 in 2011, according to the Social Security Administration).
Considering the importance of exports to the economy, it’s notable that manufacturing still accounts for more than half of our export dollars—6 in 10 of U.S. export dollars were generated by manufacturing in 2011.
Of course, exporting is only half the economic equation, with consumption being the other half. According to the 2011 Annual Survey of Manufacturers, U.S. manufacturers spent $3.2 trillion on materials in addition to spending $147 billion on capital expenditures.
Sectors of the manufacturing industry that are performing the best, in terms of shipment value, are: petroleum and coal products ($837 billion), chemical ($777 billion), food ($710 billion), and transportation equipment ($690 billion). From there, the size of the industry sectors, in terms of shipments, are considerably smaller, with the next category—machinery—clocking in with $366 billion in shipments, about half of the shipment value total of the equipment sector.
In terms of energy management, data from the 2011 Annual Survey of Manufacturers shows that manufacturers—the largest industrial consumers of energy—are getting more savvy about generating power and making money from it. According to the survey, manufacturers generated 119 billion kilowatt hours of energy and sold nearly 35 billion kilowatt hours of energy.
All in all, it seems like the increasing focus put on U.S. manufacturing over the past several years by both entrepreneurs and government looks to be paying off.
SOURCE: Automation World
David Greenfield has been covering industrial technologies, ranging from software and hardware to embedded systems, for more than 20 years. His principal areas of coverage for Automation World focus on technologies deployed for factory and process automation. Contact David at dgreenfield@automationworld.com or follow him on Twitter @DJGreenfield.
A new Kickstarter campaign,launched by the founder of Flint and Tinder, wants to make blue shoelaces a symbol of American manufacturing. (The Blue Lace Project)
The Bluelace Project, which launched on Tuesday via a Kickstarter campaign, wants to make blue shoelaces a symbol of support for American manufacturing that is as visible and instantly recognizable as the yellow ribbon symbolizes support for U.S. troops.
The effort, spearheaded by Jake Bronstein (founder and chief executive of the made-in-America Flint and Tinder underwear brand) aims to raise $25,000 by Dec. 19 so that it can fire up the machines and manufacture a run of blue-hued, 51-inch shoelaces — and inspire some enthusiasm for made in America merchandise.
According to the press materials sent our way — including a video of a fellow pulling a 13,000-pound truck with a pair — these aren’t going to be your run-of-the-mill laces.
“[T]o do it, we’ve partnered with one of the last shoelace manufacturers left in America,” Bronstein says in the announcement. “We challenged them to develop the very best product they’ve ever created. They came back with a lace unlike any we’d seen — a braided, high density, waxed canvas piece tipped in aluminum.
“This is about more than re-setting expectations and supporting an American factory on the ropes,” the announcement continues. “It’s about giving American manufacturing its own yellow ribbon: a wearable way to show support for the war they’re waging daily. A symbol that retailers can see that lets them know that if they start stocking the right domestically produced product, their customers will care. It’s time to support each other again. It’s time to try harder again.”
According to the Bluelace Project page at Kickstarter.com, the funds from each $5 pledge will be allocated as follows:
“$1 goes to Processing fees (10% of all money received is paid directly to New York City-based Kickstarter and Amazon for processing the transaction)
$2 goes directly to our shoelace factory in Portsmouth, Ohio, for manufacturing the laces using American materials and shipping them to our warehouse.
$1 covers shipping, this includes the stamps purchased from USPS and the envelope bought in bulk from our Texas-based manufacturer.
$1 is paid to our Henderson, Nevada, warehouse for packing each individual order (likely a set of BLUELACES plus whatever additional goodies we decide to throw in the pouch).”
We must get 100 emails a month pitching a new made-in-the-U.S. product, project, Web clearinghouse or the like – and even more that tout the latest in crowd-funded fashion. But what really appeals to us about this (apart from the fact that it combines both) is the sheer simplicity and straightforwardness of the item and the symbolism behind it.
Yes, a $5 pledge gets you a pair of high-quality, eye-catching laces. It also sends a message that you’ve, in one small way, very visibly voted with your feet.
And if these blue shoelaces manage to lift the enthusiasm for buying American-manufactured goods — even the tiniest bit? Well, we’d consider that a far more impressive feat of strength than pulling a 13,000-pound truck.
As of this writing it appears that Bornstein might be well on his way to tying this one up in a big shoelace-appropriate bow — the first four hours of the campaign generated 1,120 backers pledging $16,387 toward the $25,000 goal.
At this rate, we won’t be surprised if The Bluelace Project is fully funded in time to tie one on for happy hour.
According to the press materials sent our way — including a video of a fellow pulling a 13,000-pound truck with a pair — these aren’t going to be your run-of-the-mill laces.
“[T]o do it, we’ve partnered with one of the last shoelace manufacturers left in America,” Bronstein says in the announcement. “We challenged them to develop the very best product they’ve ever created. They came back with a lace unlike any we’d seen — a braided, high density, waxed canvas piece tipped in aluminum.
“This is about more than re-setting expectations and supporting an American factory on the ropes,” the announcement continues. “It’s about giving American manufacturing its own yellow ribbon: a wearable way to show support for the war they’re waging daily. A symbol that retailers can see that lets them know that if they start stocking the right domestically produced product, their customers will care. It’s time to support each other again. It’s time to try harder again.”
According to the Bluelace Project page at Kickstarter.com, the funds from each $5 pledge will be allocated as follows:
“$1 goes to Processing fees (10% of all money received is paid directly to New York City-based Kickstarter and Amazon for processing the transaction)
$2 goes directly to our shoelace factory in Portsmouth, Ohio, for manufacturing the laces using American materials and shipping them to our warehouse.
$1 covers shipping, this includes the stamps purchased from USPS and the envelope bought in bulk from our Texas-based manufacturer.
$1 is paid to our Henderson, Nevada, warehouse for packing each individual order (likely a set of BLUELACES plus whatever additional goodies we decide to throw in the pouch).”
We must get 100 emails a month pitching a new made-in-the-U.S. product, project, Web clearinghouse or the like – and even more that tout the latest in crowd-funded fashion. But what really appeals to us about this (apart from the fact that it combines both) is the sheer simplicity and straightforwardness of the item and the symbolism behind it.
Yes, a $5 pledge gets you a pair of high-quality, eye-catching laces. It also sends a message that you’ve, in one small way, very visibly voted with your feet.
And if these blue shoelaces manage to lift the enthusiasm for buying American-manufactured goods — even the tiniest bit? Well, we’d consider that a far more impressive feat of strength than pulling a 13,000-pound truck.
As of this writing it appears that Bornstein might be well on his way to tying this one up in a big shoelace-appropriate bow — the first four hours of the campaign generated 1,120 backers pledging $16,387 toward the $25,000 goal.
At this rate, we won’t be surprised if The Bluelace Project is fully funded in time to tie one on for happy hour.
SOURCE: LA Times
The Walmart on Atlantic Boulevard in Canton is collecting food for employees who can’t afford Thanksgiving dinner. The company said this is proof that employees look out for one another. The group of employees who have held national strikes against the world’s largest retailer says the food drive is proof Walmart doesn’t pay associates enough to survive. The Organization United for Respect at Walmart, or OUR Walmart, is holding strikes against the chain at stores in Dayton and Cincinnati on Monday, Nov. 18. (courtesy of OUR Walmart)
CLEVELAND, Ohio — The storage containers are attractively displayed at the Walmart on Atlantic Boulevard in Canton. The bins are lined up in alternating colors of purple and orange. Some sit on tables covered with golden yellow tablecloths. Others peer out from under the tables.
This isn’t a merchandise display. It’s a food drive – not for the community, but for needy workers.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
The food drive tables are tucked away in an employees-only area. They are another element in the backdrop of the public debate about salaries for cashiers, stock clerks and other low-wage positions at Walmart, as workers in Cincinnati and Dayton are scheduled to go on strike Monday.
Is the food drive proof the retailer pays so little that many employees can’t afford Thanksgiving dinner?
Norma Mills of Canton, who lives near the store, saw the photo circulating showing the food drive bins, and felt both “outrage” and “anger.”
“Then I went through the emotion of compassion for the employees, working for the largest food chain in America, making low wages, and who can’t afford to provide their families with a good Thanksgiving holiday,” said Mills, an organizer with Stand Up for Ohio, which is active in foreclosure issues in Canton. “That Walmart would have the audacity to ask low-wage workers to donate food to other low-wage workers — to me, it is a moral outrage.”
Kory Lundberg, a Walmart spokesman, said the food drive is proof that employees care about each other.
“It is for associates who have had some hardships come up,” he said. “Maybe their spouse lost a job.
“This is part of the company’s culture to rally around associates and take care of them when they face extreme hardships,” he said.
Lundberg said holding the food drive at the Canton Walmart was decided at the store level. However, the effort could be considered in line with what happens company-wide. The Associates in Critical Need Trust is funded by Walmart employee contributions that can be given through payroll deduction. He said employees can receive grants up to $1,500 to address hardships they may encounter, including homelessness, serious medical illnesses and major repairs to primary vehicles. Since 2001, grants totaling $80 million have been made.
But an employee at the Canton store wasn’t feeling that Walmart was looking out for her when she went to her locker more than two weeks ago and discovered the food drive containers. To her, the gesture was proof the company acknowledged many of its employees were struggling, but also proof it was not willing to substantively address their plight.
The employee said she didn’t want to use her name for fear of being fired. In a dozen years working at the company, she had never seen a food drive for employees, which she described as “demoralizing” and “kind of depressing”. The employee took photos of the bins, and sent them to the Organization United for Respect at Walmart, or OUR Walmart, the group of associates holding the strikes in Cincinnati and Dayton.
Vanessa Ferreira, an OUR Walmart organizer, said she “flipped out” when she first saw the photos taken by the Canton worker.
“Why would a company do that?” she said. “The company needs to stand up and give them their 40 hours and a living wage, so they don’t have to worry about whether they can afford Thanksgiving.”
The strikes against Walmart, which have been staged in the last several weeks across the country, including at stores in California, Florida and Illinois, are focusing on three issues: ensuring that no associate makes less than $25,000 a year, offering employees more full-time work and “ending illegal retaliation” against employees who speak out against pay and working conditions.
The first strike occurred last Black Friday at Walmart stores throughout the country. Though most associates remained on the job, many credit the event with being the public launch of the low-wage workers’ movement. Efforts to raise the minimum wage would follow, including a bill pending before Congress to raise the federal hourly minimum wage from $7.25 to $10.10. (The minimum wage in Ohio is $7.85.) In the time since, fast-food workers also have staged strikes, demanding the minimum wage be raised.
OUR Walmart won’t say what is planned for this Black Friday, but the group has a news conference scheduled Monday afternoon in Washington, D.C. AFL-CIO President Richard Trumka and Joseph Hansen, international president of the United Food and Commercial Workers union, are scheduled to announce organized labor’s commitment to Black Friday efforts.
Lundberg said taken in this context, OUR Walmart had incentive to first misinterpret and then blow out of proportion the food drive at the Canton store as fodder for the campaign.
“Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner,” read signs affixed to the tablecloths.
The food drive tables are tucked away in an employees-only area. They are another element in the backdrop of the public debate about salaries for cashiers, stock clerks and other low-wage positions at Walmart, as workers in Cincinnati and Dayton are scheduled to go on strike Monday.
Is the food drive proof the retailer pays so little that many employees can’t afford Thanksgiving dinner?
Norma Mills of Canton, who lives near the store, saw the photo circulating showing the food drive bins, and felt both “outrage” and “anger.”
“Then I went through the emotion of compassion for the employees, working for the largest food chain in America, making low wages, and who can’t afford to provide their families with a good Thanksgiving holiday,” said Mills, an organizer with Stand Up for Ohio, which is active in foreclosure issues in Canton. “That Walmart would have the audacity to ask low-wage workers to donate food to other low-wage workers — to me, it is a moral outrage.”
Kory Lundberg, a Walmart spokesman, said the food drive is proof that employees care about each other.
“It is for associates who have had some hardships come up,” he said. “Maybe their spouse lost a job.
“This is part of the company’s culture to rally around associates and take care of them when they face extreme hardships,” he said.
Lundberg said holding the food drive at the Canton Walmart was decided at the store level. However, the effort could be considered in line with what happens company-wide. The Associates in Critical Need Trust is funded by Walmart employee contributions that can be given through payroll deduction. He said employees can receive grants up to $1,500 to address hardships they may encounter, including homelessness, serious medical illnesses and major repairs to primary vehicles. Since 2001, grants totaling $80 million have been made.
But an employee at the Canton store wasn’t feeling that Walmart was looking out for her when she went to her locker more than two weeks ago and discovered the food drive containers. To her, the gesture was proof the company acknowledged many of its employees were struggling, but also proof it was not willing to substantively address their plight.
The employee said she didn’t want to use her name for fear of being fired. In a dozen years working at the company, she had never seen a food drive for employees, which she described as “demoralizing” and “kind of depressing”. The employee took photos of the bins, and sent them to the Organization United for Respect at Walmart, or OUR Walmart, the group of associates holding the strikes in Cincinnati and Dayton.
Vanessa Ferreira, an OUR Walmart organizer, said she “flipped out” when she first saw the photos taken by the Canton worker.
“Why would a company do that?” she said. “The company needs to stand up and give them their 40 hours and a living wage, so they don’t have to worry about whether they can afford Thanksgiving.”
The strikes against Walmart, which have been staged in the last several weeks across the country, including at stores in California, Florida and Illinois, are focusing on three issues: ensuring that no associate makes less than $25,000 a year, offering employees more full-time work and “ending illegal retaliation” against employees who speak out against pay and working conditions.
The first strike occurred last Black Friday at Walmart stores throughout the country. Though most associates remained on the job, many credit the event with being the public launch of the low-wage workers’ movement. Efforts to raise the minimum wage would follow, including a bill pending before Congress to raise the federal hourly minimum wage from $7.25 to $10.10. (The minimum wage in Ohio is $7.85.) In the time since, fast-food workers also have staged strikes, demanding the minimum wage be raised.
OUR Walmart won’t say what is planned for this Black Friday, but the group has a news conference scheduled Monday afternoon in Washington, D.C. AFL-CIO President Richard Trumka and Joseph Hansen, international president of the United Food and Commercial Workers union, are scheduled to announce organized labor’s commitment to Black Friday efforts.
Lundberg said taken in this context, OUR Walmart had incentive to first misinterpret and then blow out of proportion the food drive at the Canton store as fodder for the campaign.
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Erica Reed, an associate at the Canton store, agrees. She said food drives have been going on at the store for a few years, so she questions why they are becoming an issue now. Reed said past food drives helped her cope with her own problems, not caused by low wages but because of losing $500 a month in child support when the father of her four children went to jail. She declined to give her salary.
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“It took a burden off me. I didn’t have to worry about how I was getting my turkey to feed them Thanksgiving dinner,” she said.
Reed said it was “ignorant” to question efforts to help people in need or blame Walmart for the economic realities of the labor force nationally.
“You can’t find a decent job anywhere,” she said.
Scott Stringer, a Dayton associate who said he intends to go on strike, said Walmart bears blame because of its dominance. He makes $9.30 an hour after five years with the company.
“Walmart sets the precedent for everybody, so if they make changes, everyone would follow suit,” he said. “The economy and the United States, in general, would be a better place.”
A question of salaries
Lundberg said nationally that associates make $12.87 an hour. The company considers those working at least 34 hours to be full time. He said the average full-time employee works 37 to 38 hours a week. That comes to an annual salary of about $25,000.
OUR Walmart places the average salary at between $8 and $10 an hour, based on glassdoor.com and other websites that compile salaries, often without company participation. Based on that range,
th
e average associate’s salary is roughly between $15,000 and $20,000 a year.
For example, after about a dozen years on the job, the Canton employee who took the photos makes nearly $12 any hour. But the hourly rate is misleading, she said. Though officially a full-time worker, the associate said she only made about $17,000 last year because the company has had a common practice in recent years of cutting hours.
Lundberg said this isn’t true and that the company is committed to having full-time employees. For example, he said company-wide, 35,000 associates are scheduled to be promoted from part time to full time between September and January.
Ricki Hahn, a Dayton associate who intends to strike Monday, said poor working conditions — and not money — motivated her to speak out. She said supervisors consistently berating employees — often in public — is part of Walmart’s culture. So is failing to address unsafe working conditions, such as unsecured shelving in a stock room that could fall on employees, she said.
The company says it has good working conditions, in terms of safety and employee relations.
Hahn, who makes $11.70 an hour after 7½ years, describes her salary as “pretty good” since she knows it is hard for her to get credit for experience in her industry, and she would be back earning near minimum wage should she take a similar job at another retailer. Hahn said she is realistic about the salaries low-skilled workers should make. For example, she supports the federal bill to raise the minimum wage to $10.10, but believes the fast-food workers demand of $15 is too high.
While the Walmart strike isn’t just about wages, it always seems to come back to money. Hahn is constantly reminded of this during the work day.
“Personally, it is difficult for me to stock groceries that I can’t afford at the end of the day,” she said.
Symbols both in food drive and strike
While Walmart officials and many employees see the food drive bins as a symbol of generosity, others see it differently.
“That captures Walmart right there,” said Kate Bronfenbrenner, director of labor education research at Cornell University’s labor school. “Walmart is setting up bins because its employees don’t make enough to feed themselves and their families.”
Mills, the Canton community activist, said the issue of the food drive drew her in because for her it represented another case of corporations behaving irresponsibly and then leaving the less fortunate to “clean up the mess.” She said if employees can’t afford Thanksgiving, then Walmart should pay for turkey dinners “with all the fixings and all the sides.”
Reed said it was “ignorant” to question efforts to help people in need or blame Walmart for the economic realities of the labor force nationally.
“You can’t find a decent job anywhere,” she said.
Scott Stringer, a Dayton associate who said he intends to go on strike, said Walmart bears blame because of its dominance. He makes $9.30 an hour after five years with the company.
“Walmart sets the precedent for everybody, so if they make changes, everyone would follow suit,” he said. “The economy and the United States, in general, would be a better place.”
A question of salaries
Lundberg said nationally that associates make $12.87 an hour. The company considers those working at least 34 hours to be full time. He said the average full-time employee works 37 to 38 hours a week. That comes to an annual salary of about $25,000.
OUR Walmart places the average salary at between $8 and $10 an hour, based on glassdoor.com and other websites that compile salaries, often without company participation. Based on that range,
th
e average associate’s salary is roughly between $15,000 and $20,000 a year.
For example, after about a dozen years on the job, the Canton employee who took the photos makes nearly $12 any hour. But the hourly rate is misleading, she said. Though officially a full-time worker, the associate said she only made about $17,000 last year because the company has had a common practice in recent years of cutting hours.
Lundberg said this isn’t true and that the company is committed to having full-time employees. For example, he said company-wide, 35,000 associates are scheduled to be promoted from part time to full time between September and January.
Ricki Hahn, a Dayton associate who intends to strike Monday, said poor working conditions — and not money — motivated her to speak out. She said supervisors consistently berating employees — often in public — is part of Walmart’s culture. So is failing to address unsafe working conditions, such as unsecured shelving in a stock room that could fall on employees, she said.
The company says it has good working conditions, in terms of safety and employee relations.
Hahn, who makes $11.70 an hour after 7½ years, describes her salary as “pretty good” since she knows it is hard for her to get credit for experience in her industry, and she would be back earning near minimum wage should she take a similar job at another retailer. Hahn said she is realistic about the salaries low-skilled workers should make. For example, she supports the federal bill to raise the minimum wage to $10.10, but believes the fast-food workers demand of $15 is too high.
While the Walmart strike isn’t just about wages, it always seems to come back to money. Hahn is constantly reminded of this during the work day.
“Personally, it is difficult for me to stock groceries that I can’t afford at the end of the day,” she said.
Symbols both in food drive and strike
While Walmart officials and many employees see the food drive bins as a symbol of generosity, others see it differently.
“That captures Walmart right there,” said Kate Bronfenbrenner, director of labor education research at Cornell University’s labor school. “Walmart is setting up bins because its employees don’t make enough to feed themselves and their families.”
Mills, the Canton community activist, said the issue of the food drive drew her in because for her it represented another case of corporations behaving irresponsibly and then leaving the less fortunate to “clean up the mess.” She said if employees can’t afford Thanksgiving, then Walmart should pay for turkey dinners “with all the fixings and all the sides.”
Mills successfully worked toward getting Canton to pass a law requiring banks and other financial institutions to put up bonds so the city wouldn’t be left paying to maintain the homes on which these institutions foreclosed. Many of these foreclosures were the result of subprime and predatory loans, she said.
“I call it the reverse Robin Hood effect,” she said.
Walmart sees the strikes as a symbol without substance. For example, during the highly publicized strikes in Los Angeles earlier this month, the company said no more than 20 associates participated, though there were about 275 demonstrators.
Bronfenbrenner said the company is misinterpreting the low numbers of workers on strike.
“There were many work places, that when the striking workers returned, many workers inside stood up and clapped,” she said.
Both Dayton strikers Hahn and Stringer say they have strong support, even if fellow workers won’t join them on the picket line.
“A lot of friends of mine at work want to go out on strike, but they fear that they won’t be able to support their families if something happens,” Hahn said.
That something could mean losing a job, said Ferreira, the OUR Walmart organizer. She said she got fired after participating in the 2012 Black Friday strikes. Ferreira was terminated some time after the strike on trumped up charges of staying on break too long, she said.
Lundberg said Walmart has a very strong anti-retaliation policy.
Hahn and Stringer see themselves at the beginning of a movement that they believe will mushroom.
“We’ll be speaking out for other areas, like Cleveland, that aren’t striking,” Hahn said. “Just because they aren’t striking Monday, doesn’t mean it can’t happen there soon.”
SOURCE: Cleveland.com
Tree leaves were turning yellow and red in Damascus, Oregon, in late October. Competing with fall foliage for attention were Halloween decorations, which adorned almost every house in this sleepy middle-class suburb of Portland on America’s Pacific West Coast.
SECRET LETTER FOUND INSIDE HALLOWEEN TOY
A few pumpkins sat on the steps leading to Julie Keith’s house, while three fake tombstones greeted visitors in the front porch — as they did last year.
“I feel obligated to use them every year now because I feel they need to have some worth,” said Keith, 43, who lives here with her husband and their two young children. “I am sad for the people who have to endure torture to make these silly decorations.”
The decorations came in a $29 “Totally Ghoul” toy set that Keith purchased in a local Kmart store in 2011. When she opened the package before Halloween last year, a letter fell out.
In broken English mixed with Chinese, the author cried for help: “If you occasionally (sic) buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here… will thank and remember you forever.”
“I feel obligated to use them every year now because I feel they need to have some worth,” said Keith, 43, who lives here with her husband and their two young children. “I am sad for the people who have to endure torture to make these silly decorations.”
The decorations came in a $29 “Totally Ghoul” toy set that Keith purchased in a local Kmart store in 2011. When she opened the package before Halloween last year, a letter fell out.
In broken English mixed with Chinese, the author cried for help: “If you occasionally (sic) buy this product, please kindly resend this letter to the World Human Right Organization. Thousands people here… will thank and remember you forever.”
An excerpt of the letter sent by labor camp inmate Mr. Zhang contained within the Halloween decoration.
Long hours, abuse
The letter went on to detail grueling hours, verbal and physical abuses as well as torture that inmates making the products had to endure — all in a place called Masanjia Labor Camp in China.
“It was surprising at first and I didn’t know if it was a hoax,” recalled Keith, a program manager at a company that runs a chain of thrift stores and donation centers. “Once I read the letter and researched on the Internet, I realized that this may be the real deal.
“I knew there are labor camps in China, but this slammed me in the face. I had no idea if this person was still alive or dead or in the camp — it’s extraordinary that it was able to come all the way from China.”
Keith heeded the writer’s call by reaching out to human rights groups but received no response. She then posted the letter on Facebook, which prompted the local Oregonian newspaper to run a front-page article.
As word of Keith’s unusual Halloween discovery spread, her story turned into international news, throwing a spotlight on one of China’s most notorious labor camps — and the controversial system behind them.
Strange discovery
Then one morning recently, some 6,000 miles away from Damascus, a bespectacled middle-aged Chinese man walked into the CNN office in Beijing to talk to us about this strange discovery half a world away. His voice was soft and calm but from time to time it would betray a hint of both agony and force.
“I saw the packaging and figured the products were bound for some English-speaking countries,” he said. “I knew about Christmas but we were making skulls and the like — I really didn’t know much about Halloween.
The letter went on to detail grueling hours, verbal and physical abuses as well as torture that inmates making the products had to endure — all in a place called Masanjia Labor Camp in China.
“It was surprising at first and I didn’t know if it was a hoax,” recalled Keith, a program manager at a company that runs a chain of thrift stores and donation centers. “Once I read the letter and researched on the Internet, I realized that this may be the real deal.
“I knew there are labor camps in China, but this slammed me in the face. I had no idea if this person was still alive or dead or in the camp — it’s extraordinary that it was able to come all the way from China.”
Keith heeded the writer’s call by reaching out to human rights groups but received no response. She then posted the letter on Facebook, which prompted the local Oregonian newspaper to run a front-page article.
As word of Keith’s unusual Halloween discovery spread, her story turned into international news, throwing a spotlight on one of China’s most notorious labor camps — and the controversial system behind them.
Strange discovery
Then one morning recently, some 6,000 miles away from Damascus, a bespectacled middle-aged Chinese man walked into the CNN office in Beijing to talk to us about this strange discovery half a world away. His voice was soft and calm but from time to time it would betray a hint of both agony and force.
“I saw the packaging and figured the products were bound for some English-speaking countries,” he said. “I knew about Christmas but we were making skulls and the like — I really didn’t know much about Halloween.
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“But I had this idea of telling the outside world what was happening there — it was a revelation even to someone like me who had spent my entire life in China.”
After months of searching, through a trusted source and with some good luck, CNN found the man who says he wrote the letter that Keith found in her Halloween decorations. Released from the labor camp but afraid to be sent back, he agreed to his first television interview on the condition that CNN concealed his identity. “Mr. Zhang” — as he would be called — is a follower of the Falun Gong spiritual movement, branded by the Chinese government as an evil cult and outlawed since 1999. He claims he was detained by police several months before the 2008 Summer Olympics in Beijing and sentenced to two and a half years in the Masanjia labor camp in northeastern China. |
“For people who have never been there, it’s impossible to imagine,” he said. “The first thing they do is to take your human dignity away and humiliate you.”
Zhang recounted the systematic use of beatings, sleep deprivation and torture, especially targeting those like him who refused to repent. Some gruesome details are too specific to him to be reported.
“Making products turned out to be an escape from the horrible violence,” he said. “We thought we could protect ourselves, and avoid verbal and physical assaults as long as we worked and did the job well.”
Zhang recounted the systematic use of beatings, sleep deprivation and torture, especially targeting those like him who refused to repent. Some gruesome details are too specific to him to be reported.
“Making products turned out to be an escape from the horrible violence,” he said. “We thought we could protect ourselves, and avoid verbal and physical assaults as long as we worked and did the job well.”
The male inmates’ quarters at the Masanjia labor camp stand behind fields covered in haystacks.
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Broken by China’s labor camps
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Secret messages
Moving forward with his plan to expose the horror in the camp, he secretly tore off pages from exercise books meant for political indoctrination sessions as inmates were barred from having paper. He also befriended a minor criminal from his hometown — a monitor for the guards — who managed to get him another banned item: a ball pen refill. “I hid it in a hollow space in the bed stand — and only got time to write late at night when everyone else had fallen asleep,” he recalled. “The lights were always on in the camp and there was a man on duty in every room to keep an eye on us.” “Writing in English was very hard for me. I had studied the language but had never practiced speaking or writing much. That’s why I included some Chinese words to make sure the message would not be misunderstood because of my English mistakes.” |
Inside the camp
In late October, the autumn colors were fading fast in Masanjia Township as temperatures plunged to barely above freezing overnight. Driving towards town, the landscape was a mixture of barren farmland and mothballed factories with banners advertising cheap rent.
The town itself sits outside Shenyang, the provincial capital of Liaoning and an industrial base of eight million residents. If not for the labor camp infamy, it would be just another backwater in China’s northeastern rust belt.
A national emblem and two signs adorned an unguarded entrance in the center of town. One displayed “Liaoning Province Masanjia Labor” with the final word of “Camp” missing; the other read “Liaoning Province Ideological Education School.”
Inside the complex, which seemed to be closed — though officials would not confirm this — fields covered with haystacks and dried corn separated three clusters of low-rise buildings. Administrative offices were painted white, female inmates’ quarters mostly red and male’s largely beige. High blue concrete walls or green fences glinted with barbwire surrounding the inmate areas, as guard towers loomed above each corner.
In late October, the autumn colors were fading fast in Masanjia Township as temperatures plunged to barely above freezing overnight. Driving towards town, the landscape was a mixture of barren farmland and mothballed factories with banners advertising cheap rent.
The town itself sits outside Shenyang, the provincial capital of Liaoning and an industrial base of eight million residents. If not for the labor camp infamy, it would be just another backwater in China’s northeastern rust belt.
A national emblem and two signs adorned an unguarded entrance in the center of town. One displayed “Liaoning Province Masanjia Labor” with the final word of “Camp” missing; the other read “Liaoning Province Ideological Education School.”
Inside the complex, which seemed to be closed — though officials would not confirm this — fields covered with haystacks and dried corn separated three clusters of low-rise buildings. Administrative offices were painted white, female inmates’ quarters mostly red and male’s largely beige. High blue concrete walls or green fences glinted with barbwire surrounding the inmate areas, as guard towers loomed above each corner.
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“Wow, they’ve removed the sign in front the men’s camp,” marveled Liu Hua, pointing at an unmarked gate. “Look, that warehouse-looking building over there was where men like Zhang used to work.”
As the van carrying her and the CNN crew stopped near the women’s quarters, powerful memories rushed back to this 50-year-old farmer from a nearby village. |
Last inmates
Liu only dared to return here after hearing that authorities had released the last group of inmates in mid-September — an apparent step toward shutting the facility down.
She had landed in Masanjia twice for petitioning against local officials over what she calls illegal land grabs. In total, she spent two and a half years in the labor camp. Her first stint overlapped with Zhang’s, but the two only met after both were released. Unlike Zhang, Liu didn’t see work as an escape. Remembering making down jackets bound for Italy and shirts sold to South Korea, she still shivers at the heavy workload that almost ruined her health.
“I had to do everything from matching fabrics to sorting materials and cutting loose threads,” she said. “Every day, I had to repeat seven work steps — for about 2,400 steps in total.”
Suffering from high blood pressure and malnutrition, Liu said she once fainted on the job but was denied medical care. For her defiant attitude, she said guards also ordered fellow inmates to beat her twice — their assaults with plastic stools and basins so vicious that she lost consciousness. “But I still had to work after I regained consciousness,” she added. “This place was Hell on Earth.”
Horror exposed
Last April, Masanjia’s fear-striking reputation was cemented when Lens, a Chinese magazine, published a lengthy article about the horrors inside its walls. Based on interviews with a dozen former female inmates including Liu, the story — titled “Leaving Masanjia” — detailed appalling working and living environments as well as frequent use of torture in the camp.
The Chinese journalists also spoke to two former officials at the camp who said Masanjia housed more than 5,000 inmates as free laborers at its peak and created annual revenues of nearly 100 million yuan ($16 million) — including those generated from exports.
Liu only dared to return here after hearing that authorities had released the last group of inmates in mid-September — an apparent step toward shutting the facility down.
She had landed in Masanjia twice for petitioning against local officials over what she calls illegal land grabs. In total, she spent two and a half years in the labor camp. Her first stint overlapped with Zhang’s, but the two only met after both were released. Unlike Zhang, Liu didn’t see work as an escape. Remembering making down jackets bound for Italy and shirts sold to South Korea, she still shivers at the heavy workload that almost ruined her health.
“I had to do everything from matching fabrics to sorting materials and cutting loose threads,” she said. “Every day, I had to repeat seven work steps — for about 2,400 steps in total.”
Suffering from high blood pressure and malnutrition, Liu said she once fainted on the job but was denied medical care. For her defiant attitude, she said guards also ordered fellow inmates to beat her twice — their assaults with plastic stools and basins so vicious that she lost consciousness. “But I still had to work after I regained consciousness,” she added. “This place was Hell on Earth.”
Horror exposed
Last April, Masanjia’s fear-striking reputation was cemented when Lens, a Chinese magazine, published a lengthy article about the horrors inside its walls. Based on interviews with a dozen former female inmates including Liu, the story — titled “Leaving Masanjia” — detailed appalling working and living environments as well as frequent use of torture in the camp.
The Chinese journalists also spoke to two former officials at the camp who said Masanjia housed more than 5,000 inmates as free laborers at its peak and created annual revenues of nearly 100 million yuan ($16 million) — including those generated from exports.
Former Masanjia inmate Liu Hua (right) walks across the field outside the female inmates’ quarters and talks to a CNN reporter.
Although the officials acknowledged poor living and labor conditions, they denied the use of torture. They admitted some officers may have used excessive force in dealing with disobedient inmates.
The story mentioned the discovery of an accusatory letter about Masanjia in a Halloween decoration package in the United States — and that the news caused a big stir in the labor camp. When asked, one official confirmed the letter indeed came from the Masanjia men’s camp.
The article’s publication surprised many observers, as domestic Chinese media — all state-run — had long shunned the sensitive subject.
Less than two weeks after the issue hit newsstands, the official state news agency, Xinhua, ran a response from the local autho
rit
ies. Calling the article “seriously inaccurate,” provincial officials in Liaoning said their thorough investigation at Masanjia turned up no evidence of any torture or mistreatment of the interviewed inmates during their confinement.
The story mentioned the discovery of an accusatory letter about Masanjia in a Halloween decoration package in the United States — and that the news caused a big stir in the labor camp. When asked, one official confirmed the letter indeed came from the Masanjia men’s camp.
The article’s publication surprised many observers, as domestic Chinese media — all state-run — had long shunned the sensitive subject.
Less than two weeks after the issue hit newsstands, the official state news agency, Xinhua, ran a response from the local autho
rit
ies. Calling the article “seriously inaccurate,” provincial officials in Liaoning said their thorough investigation at Masanjia turned up no evidence of any torture or mistreatment of the interviewed inmates during their confinement.
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Officials also rejected accusations of horrid living and working conditions in the camp, blaming the journalists for buying into “smear campaigns” launched by overseas Falun Gong movements. They did not address the Halloween letter in their rebuttal.
Lens magazine suspended publication for several months after its Masanjia issue. Despite CNN’s repeated efforts, officials with Liaoning’s police department and press office declined to comment for this story. |
Hundreds of camps
By all accounts, Masanjia is but one of hundreds of labor camps in China borne under the laojiao — or “re-education through labor” — scheme.
Set up in 1957, the system allows the police to detain petty offenders — such as thieves, prostitutes and drug addicts — in labor camps for up to four years without a trial. China’s judicial process itself is already controlled by the ruling Communists in a one-party regime. In a 2009 report to a United Nations human rights forum, the Chinese government acknowledged 320 such facilities nationwide holding 190,000 people. Other estimates have put the number of inmates much higher.
Critics have long accused of the authorities of misusing the camps to silence so-called trouble makers, including political dissidents, rights activists and Falun Gong members.
By all accounts, Masanjia is but one of hundreds of labor camps in China borne under the laojiao — or “re-education through labor” — scheme.
Set up in 1957, the system allows the police to detain petty offenders — such as thieves, prostitutes and drug addicts — in labor camps for up to four years without a trial. China’s judicial process itself is already controlled by the ruling Communists in a one-party regime. In a 2009 report to a United Nations human rights forum, the Chinese government acknowledged 320 such facilities nationwide holding 190,000 people. Other estimates have put the number of inmates much higher.
Critics have long accused of the authorities of misusing the camps to silence so-called trouble makers, including political dissidents, rights activists and Falun Gong members.
“The continued existence of laojiao signifies China remains a police state,” said Pu Zhiqiang, a prominent Beijing-based lawyer known for defending government critics in court and a vocal opponent of the labor camp system. “It’s against China’s own constitution and laws, as well as international conventions it has signed.
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“The danger is really about unrestrained police power at a time when they are under increasing pressure to maintain social stability.”
Two of Pu’s cases last year generated a massive backlash against laojiao, forcing the government to re-examine the thorny issue. In one case, a mother was sentenced to one and a half years in a labor camp for “disrupting social order” after she repeatedly petitioned officials to execute men convicted of raping her 11-year-old daughter. In another case, a young village official was sent to a labor camp for two years for retweeting posts deemed seditious. |
Signs of change
Since the change of top leadership a year ago and despite mixed signals, the government may finally be ready to scrap the controversial system.
Li Keqiang, the new premier, said in his first press conference as head of the government that officials were “working intensively to formulate a plan” to reform the laojiao system and it may be announced before the year’s end. A senior Chinese diplomat repeated Li’s statement recently when addressing a U.N.-organized human rights forum.
While some activists have expressed concerns over the official term of “reform” instead of “abolition,” Pu, the lawyer, feels the strong tide of public opinions against the laojiao system has forced the government’s hands.
Already, provinces around China — including Liaoning — seem to be preparing for the inevitable. State media has cited examples of officials stopping accepting new inmates, changing camp names to drug rehabilitation centers and reducing staff on site.
And an empty Masanjia seems to be the ultimate testimony there is no going back.
Back in Oregon, Julie Keith is still awaiting the next move from her government. She contacted U.S. customs officials after finding the letter, as federal law prohibits the import of goods made by forced labor. She said officials admitted there was little they could do other than adding her report to their file. She hasn’t heard from them since.
Contacted by CNN, a spokeswoman with U.S. Immigration and Customs Enforcement (ICE) declined to confirm the existence or status of an investigation.
“These allegations are very serious and are an investigative priority for ICE,” she said. “These activities not only negatively impact the competitiveness of American businesses, but put vulnerable workers at risk.”
Supplying the West
Sears, the company that owns Kmart, also responded when asked how products in a labor camp in China ended up on its store shelves. “We found no evidence that production was subcontracted to a labor camp during our investigation,” it said, but added it no longer sources from this company.
Keith believes Sears “must know” but “would rather this be swept under the rug.”
Her skepticism is shared by human rights activists who have long called for stricter supervision of supply chains by multinational corporations. “A lot of these camps are run like businesses and, if you look online, there are a lot of them advertising,” said Maya Wang, a Hong Kong-based researcher for Human Rights Watch. “One would question how they get in touch with Western companies and whether or not Western companies have done due diligence when they procure services.”
For consumers, though, Wang says the only sure bet to avoid forced labor products from China is to push for legislation in their own countries and ensure strict implantation by their governments.
Even if China abolishes the labor camp system, experts like Wang and Pu point out that convicted criminals often work under similar labor conditions in prisons.
Freed from Masanjia but still haunted by the nightmare, Zhang has lived quietly in Beijing. When his long-forgotten letter was discovered by Keith and made news last year, he was as surprised as everyone else. He sent a new letter to Keith through a friend, thanking her profusely for her “righteous action that helped people in desperation achieve a good ending,” while reminding her that “China is like a big labor camp” under the Communist Party’s rule.
“It is quite ironic that it was a bloody graveyard kit that I purchased — knowing that the people who made these kits were desperate and bloody themselves,” Keith reflected.
“Now I check the labels and try not to buy things I don’t necessarily need, especially if it is made in China,” she added.
SOURCE: CNN
The push by Wal-Mart Stores to return manufacturing to the U.S. has gathered more momentum with the global retailer announcing that three companies will support manufacturing operations in Georgia, South Carolina and Pennsylvania.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Bentonville-based Wal-Mart sponsored the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 34 states with about 500 Wal-Mart suppliers and retail vendors.
Arkansas Gov. Mike Beebe was one of eight state governors to attend. The effort has already produced one success for Arkansas. Redman & Associates announced Oct. 7 a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
The announcement Thursday was held at the SelectUSA 2013 Investment Summit with Walmart U.S. President and CEO Bill Simon joining U.S. Department of Commerce Secretary Penny Pritzker to discuss the manufacturing moves to the U.S.
More than 1,200 attendees from nearly 60 countries around the world attended the SelectUSA event held in Washington, D.C., and coordinated by the U.S. Department of Commerce.
According to a statement from Wal-Mart, Elan-Polo, Louis Hornick & Company and EveryWare Global will produce footwear, curtains and glassware, respectively. The three suppliers will create a combined 385 jobs with the new manufacturing operations.
“Today’s announcement is a great example of the progress that’s being made, and it highlights opportunities that exist for manufacturers to invest in the USA by re-shoring or expanding their manufacturing in America,” Simon said in the statement. “Companies, government officials and industry leaders are working together to increase manufacturing, and these efforts are helping more Americans get into good-paying jobs and more businesses reinvest in the U.S. economy.”
The statement provided the following details about the three companies.
Bentonville-based Wal-Mart sponsored the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 34 states with about 500 Wal-Mart suppliers and retail vendors.
Arkansas Gov. Mike Beebe was one of eight state governors to attend. The effort has already produced one success for Arkansas. Redman & Associates announced Oct. 7 a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
The announcement Thursday was held at the SelectUSA 2013 Investment Summit with Walmart U.S. President and CEO Bill Simon joining U.S. Department of Commerce Secretary Penny Pritzker to discuss the manufacturing moves to the U.S.
More than 1,200 attendees from nearly 60 countries around the world attended the SelectUSA event held in Washington, D.C., and coordinated by the U.S. Department of Commerce.
According to a statement from Wal-Mart, Elan-Polo, Louis Hornick & Company and EveryWare Global will produce footwear, curtains and glassware, respectively. The three suppliers will create a combined 385 jobs with the new manufacturing operations.
“Today’s announcement is a great example of the progress that’s being made, and it highlights opportunities that exist for manufacturers to invest in the USA by re-shoring or expanding their manufacturing in America,” Simon said in the statement. “Companies, government officials and industry leaders are working together to increase manufacturing, and these efforts are helping more Americans get into good-paying jobs and more businesses reinvest in the U.S. economy.”
The statement provided the following details about the three companies.
- Elan-Polo, a global footwear and 35-year Walmart supplier, will start production of injection-molded footwear in March 2014 at a factory in Hazelhurst, Ga., as part of a joint venture with McPherson Manufacturing. Once at full capacity, this new facility will create 250 jobs and produce 20,000 pairs of shoes per day. Previously, the company manufactured the shoes overseas.
- EveryWare Global manufactures bakeware, beverageware, tabletop and household glassware. The company will produce Mainstays Canning Jars for Walmart in its Monaca, Pa., facility. The company is investing $1.8 million to expand factory capacity and establish a new product line made in the U.S. The agreement will create new manufacturing jobs in the Monaca facility. Founded in 1905, Anchor Hocking, an EveryWare Global brand, has been supplying products to Walmart for over 25 years and has 1,811 employees in the United States.
- Louis Hornick & Company makes window coverings and home textiles. The company will invest $2.5 million to establish a new manufacturing facility in Allendale County, S.C. The investment is expected to create 125 new jobs over the next three years. The company has been supplying Walmart for 40 years.
Wal-Mart said in the statement that as a result of their onshoring effort “manufacturers have committed to create more than 1,600 jobs and invest more than $100 million in industries that include socks, televisions, light bulbs and hardware. Factoring in today’s announcement, more than 600 of those job commitments have been announced since Walmart’s U.S. Manufacturing Summit.”
In addition to the Redman move to Rogers, the new operations include:
- Tailor Made Products, a kitchen utensil manufacturer, is making a $2 million investment that will add 12 new manufacturing jobs in Wisconsin.
- Korona Candles will invest $18.5 million that will generate 170 jobs in Virginia to produce Mainstays Tealight Candles.
It will take many more announcements to boost the U.S. and Arkansas manufacturing sectors.
Historically, U.S. manufacturing sector employment has ranged between 19 million and 17 million. It reached a high of 19.553 million jobs in June 1979. Sector employment has been stuck below 12 million since May 2009. Prior to May 2009, the last time sector employment was below 12 million was May 1941. The sector employed an estimated 11.963 million as of September, up slightly over the 11.925 million in September 2012.
The U.S. Bureau of Labor Statistics estimated there were 154,700 manufacturing jobs in Arkansas during August 2013. Employment in the sector is down 24.2% compared to August 2003, and is down more than 37% compared to the sector high of 247,300 set in February 1995.
SOURCE: The City Wire
Rogers is famous for Daisy BB guns but it will soon be home to another toy maker, Redman & Associates, who announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years.
Gov. Mike Beebe, Walmart U.S. CEO Bill Simon and officials with Redman made the announcement Monday (Oct. 7) in Rogers.
Mel Redman, a former Wal-Mart executive and Redman CEO, told a room full of economic leaders that his firm had been looking at on-shoring its small manufacturing center as the economics are now favoring “Made in the USA.”
“This would not have happened if Wal-Mart had not made its $50 billion commitment to source American-made products over the next 10 years. That gave me the guts to step out and do it,” Redman said during Monday’s press conference.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.
Redman said he attended the recent supplier/manufacturing conference held in Orlando by Wal-Mart.
“We met with the state economic team about shared our plans and they took off like a freight train after that,” Redman said.
This is the first score for Arkansas since Wal-Mart’s manufacturing conference which brought together suppliers and state economic teams to discuss bringing manufacturing jobs back to the U.S.
Redman said he operates a sales office in Bentonville that employs 16 people. But moving the manufacturing here will create 17 jobs the first year, ramping up to 74 by the time the entire operation comes online in Rogers.
A study by the University of Arkansas estimates the $18.55 per hour average wage created from this business will pump $3 million back into the local economy once it’s fully operational. The UA study found that every new manufacturing job created will support four other jobs that provide services to the toy maker.
“We buy a lot of cardboard boxes and print lots of labels. Local companies here will get that business,” Redman said.
He said when the Rogers plant is fully operational and shipping from Northwest Arkansas instead of Long Beach, Calif., his firm will save 2.2 million inland miles and slash $7 million in ocean freight expenses, by far its largest annual expense. It will also cut seven days out of the supply chain, making for a more efficient overall operation.
Gov. Beebe said there is not a better story than seeing a local entrepreneur who could have retired long ago but instead invests in creating new jobs.
“This is just the tip of the iceberg. We are going to see other companies follow this lead because people do want to buy American-made products if the price and quality are comparable,” Beebe said.
Beebe also credited Wal-Mart for stepping out to help facilitate suppliers and economic teams to make success stories like this happen.
“I have said for a long time that a country can’t be great unless it makes things, we are seeing these jobs come back because consumers want to buy manufactured goods made in America,” Beebe said.
“Wal-Mart’s commitment to restoring U.S. manufacturing jobs and Redman & Associates’ decision to bring these jobs to the U.S. allow more Americans to do just that. With rising business costs overseas, Arkansas has the ideal location and workforce for companies looking to manufacture and distribute products throughout the U.S. and the world,” he said.
Rogers Mayor Greg Hines said the new facility will be located at 1300 N. Dixieland Road in an existing 275,000 square-foot building.
“Mel Redman told me after touring the building that he could not have built one more suitable for his manufacturing needs,” Hines said.
Redman will produce 6-volt battery powered ride on toys and believes they can source all of the raw products in the U.S. The battery itself is the most challenging. Redman will relocate its plastic molding business to Rogers, which makes the main body of these ride-on toys.
The toys made locally will feature characters from Disney and Marvel franchises including Disney Princess, Classics, Disney•Pixar and Spider-Man. Production should begin in early 2014. Redman is licensed by Marvel Characters B.V., and Redman produces Disney character ride-on toys for Wal-Mart under Wal-Mart’s license with Disney.
Simon said the response he and other Walmart officials are hearing from their supplier community about this initiative has been overwhelmingly positive.
“It is making economic sense. We continue to hear about smaller suppliers adding a few U.S. jobs here and there, but this is the first of we hope are several announcements for manufacturing onshoring,” Simon said.
He said this region like many others could become clusters for certain like types of manufacturing. For instance Redman requires plastic molding, which could open the door for others in that business. Or, when a textile company that makes socks comes back onshore, other garment companies could also cluster there because of shared sourcing power.
Grant Tennille, executive director for the Arkansas Economic Development Commission, said the state did give Redman a few incentives to move their manufacturing operation from Shanghai to the Natural State. Those incentives included $2 million that goes toward building and equipment costs for Redman, and the Arkansas Advantage 1% state tax credit on wages paid for five years. In addition, Redman will also get a sales tax rebate on manufacturing equipment purchases relating to its startup.
Mel Redman, a former Wal-Mart executive and Redman CEO, told a room full of economic leaders that his firm had been looking at on-shoring its small manufacturing center as the economics are now favoring “Made in the USA.”
“This would not have happened if Wal-Mart had not made its $50 billion commitment to source American-made products over the next 10 years. That gave me the guts to step out and do it,” Redman said during Monday’s press conference.
Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.
Beebe was one of eight state governors to attend the “U.S. Manufacturing Summit” in Orlando, Fla., that was held Aug. 22-23. The event connected economic development officials from 36 states with about 600 Wal-Mart suppliers and retail vendors.
Redman said he attended the recent supplier/manufacturing conference held in Orlando by Wal-Mart.
“We met with the state economic team about shared our plans and they took off like a freight train after that,” Redman said.
This is the first score for Arkansas since Wal-Mart’s manufacturing conference which brought together suppliers and state economic teams to discuss bringing manufacturing jobs back to the U.S.
Redman said he operates a sales office in Bentonville that employs 16 people. But moving the manufacturing here will create 17 jobs the first year, ramping up to 74 by the time the entire operation comes online in Rogers.
A study by the University of Arkansas estimates the $18.55 per hour average wage created from this business will pump $3 million back into the local economy once it’s fully operational. The UA study found that every new manufacturing job created will support four other jobs that provide services to the toy maker.
“We buy a lot of cardboard boxes and print lots of labels. Local companies here will get that business,” Redman said.
He said when the Rogers plant is fully operational and shipping from Northwest Arkansas instead of Long Beach, Calif., his firm will save 2.2 million inland miles and slash $7 million in ocean freight expenses, by far its largest annual expense. It will also cut seven days out of the supply chain, making for a more efficient overall operation.
Gov. Beebe said there is not a better story than seeing a local entrepreneur who could have retired long ago but instead invests in creating new jobs.
“This is just the tip of the iceberg. We are going to see other companies follow this lead because people do want to buy American-made products if the price and quality are comparable,” Beebe said.
Beebe also credited Wal-Mart for stepping out to help facilitate suppliers and economic teams to make success stories like this happen.
“I have said for a long time that a country can’t be great unless it makes things, we are seeing these jobs come back because consumers want to buy manufactured goods made in America,” Beebe said.
“Wal-Mart’s commitment to restoring U.S. manufacturing jobs and Redman & Associates’ decision to bring these jobs to the U.S. allow more Americans to do just that. With rising business costs overseas, Arkansas has the ideal location and workforce for companies looking to manufacture and distribute products throughout the U.S. and the world,” he said.
Rogers Mayor Greg Hines said the new facility will be located at 1300 N. Dixieland Road in an existing 275,000 square-foot building.
“Mel Redman told me after touring the building that he could not have built one more suitable for his manufacturing needs,” Hines said.
Redman will produce 6-volt battery powered ride on toys and believes they can source all of the raw products in the U.S. The battery itself is the most challenging. Redman will relocate its plastic molding business to Rogers, which makes the main body of these ride-on toys.
The toys made locally will feature characters from Disney and Marvel franchises including Disney Princess, Classics, Disney•Pixar and Spider-Man. Production should begin in early 2014. Redman is licensed by Marvel Characters B.V., and Redman produces Disney character ride-on toys for Wal-Mart under Wal-Mart’s license with Disney.
Simon said the response he and other Walmart officials are hearing from their supplier community about this initiative has been overwhelmingly positive.
“It is making economic sense. We continue to hear about smaller suppliers adding a few U.S. jobs here and there, but this is the first of we hope are several announcements for manufacturing onshoring,” Simon said.
He said this region like many others could become clusters for certain like types of manufacturing. For instance Redman requires plastic molding, which could open the door for others in that business. Or, when a textile company that makes socks comes back onshore, other garment companies could also cluster there because of shared sourcing power.
Grant Tennille, executive director for the Arkansas Economic Development Commission, said the state did give Redman a few incentives to move their manufacturing operation from Shanghai to the Natural State. Those incentives included $2 million that goes toward building and equipment costs for Redman, and the Arkansas Advantage 1% state tax credit on wages paid for five years. In addition, Redman will also get a sales tax rebate on manufacturing equipment purchases relating to its startup.
Tennille said the tax credits occur retroactively. Redman said the incentive package helped to seal the deal.
Tennille said there are plenty of other companies like Redman that have the relationship with Wal-Mart but have been outsourcing their manufacturing arm. Those are some of the companies the state is targeting for onshore efforts.
Raymond Burns CEO of Rogers Lowell Chamber of Commerce, said Monday’s announcement is symbolic of what is happening across the country as manufacturers across many segments are finding economic incentives to make their products in the U.S.
“We hope to see more of it here, that’s for sure,” Burns said.
Redman & Associates is a family-owned business founded in 1995. The company started as a consulting firm, and now has a diversified portfolio that includes production through all stages of product design, production, logistics, store planning, and into the hands of the consumer. The company produces Monster TRAX ride-on toy vehicles, Zumu three-in-one bike trailer/jogg
er/
strollers and a variety of six-volt ride on toys licensed through Disney.
SOURCE: The City Wire
A job-seeker, right, talks to a prospective employer at a job fair earlier this year at Prairie State College in Chicago Heights. Jeff Korzenik, chief investment strategist at Fifth Third Bank, said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
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HOBART │ Manufacturing returning to the U.S., a housing and construction comeback and “getting junior out of the house” are some of the reasons the country is on an economic journey to normal, according to an industry expert.
On Wednesday at Avalon Manor, the Northwest Indiana Forum and Fifth Third Bank welcomed Jeff Korzenik, chief investment strategist at Fifth Third Bank, for an economic outlook and review.
Korzenik, a 27-year industry veteran and a frequent guest on CNBC’s “Closing Bell” program, said the economic downturn of 2008-09 might not have been “your grandfather’s recession, but it was your great- great-grandfather’s recession”
“The kind of financial disaster that we weathered in 2008 and 2009 used to occur in the United States every 10 or 12 years,” he said “But it primarily occurred in the 19th century and parts of the 20th century. Economists called it a financial panic. What was abnormal in ’08 and ’09 was that we had a 19th century recession.”
That said, Korzenik thinks we are turning a corner.
“There have been some structural changes in the U.S. workforce,” he said.
If you lose your job in a recession it takes you longer to get back to work, Korzenik said. Usually it takes 15 to 20 weeks on average for people to get back in the workforce but in this recession, people stayed out of work for 40 weeks or more.
“We’re starting now to get some resolution from this because we’re through the pipeline of people exhausting their unemployment benefits and making tough choices to return into the workforce,” Korzenik said. “This is the essence of the journey to normal.”
Housing and construction market is also on a comeback and the acceleration is continuing, Korzenik said.
Children of baby boomers are moving out of their parent’s homes. It was delayed during 2008-09 downturn. Korzenik called it “getting junior out of the basement.”
Some of those “juniors” may only be renting but others are buying homes. Korzenik also said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
“This group has seen enormous gains,” he said.
Korzenik said another driver of economic growth is the reshoring of manufacturing in the United States. The days of sending jobs overseas is changing and makers of heavier items are moving back to the U.S. Korzenik said Whirlpool has opened its first manufacturing plant in the U.S. in 30 years.
“It’s important for the creation of new jobs,” he said. “Manufacturing jobs may not pay what they paid at their peak, but they still pay more than service sector jobs.”
Korzenik said manufacturing jobs have what Congress calls “a high multiplier effect,” which means they tend to create other jobs in the economy.
Additionally, there has been a profound energy revolution to extent that the U.S. has overtaken Russia as the largest energy producer of the world.
“Ten years ago this was unthinkable,” Korzenik said. “It’s one of the drivers of manufacturing because energy in the United States is cheaper.
Korzenik also talked about the movement to natural gas in vehicles – something that’s becoming widespread with trucking fleets across the country.
Despite the apparent journey to normal, Korzenik was reminded of the proverb “a man plans and God laughs” – which means things can go wrong. Those things include inflation risks, currency debasement and inflation.
Korzenik, a 27-year industry veteran and a frequent guest on CNBC’s “Closing Bell” program, said the economic downturn of 2008-09 might not have been “your grandfather’s recession, but it was your great- great-grandfather’s recession”
“The kind of financial disaster that we weathered in 2008 and 2009 used to occur in the United States every 10 or 12 years,” he said “But it primarily occurred in the 19th century and parts of the 20th century. Economists called it a financial panic. What was abnormal in ’08 and ’09 was that we had a 19th century recession.”
That said, Korzenik thinks we are turning a corner.
“There have been some structural changes in the U.S. workforce,” he said.
If you lose your job in a recession it takes you longer to get back to work, Korzenik said. Usually it takes 15 to 20 weeks on average for people to get back in the workforce but in this recession, people stayed out of work for 40 weeks or more.
“We’re starting now to get some resolution from this because we’re through the pipeline of people exhausting their unemployment benefits and making tough choices to return into the workforce,” Korzenik said. “This is the essence of the journey to normal.”
Housing and construction market is also on a comeback and the acceleration is continuing, Korzenik said.
Children of baby boomers are moving out of their parent’s homes. It was delayed during 2008-09 downturn. Korzenik called it “getting junior out of the basement.”
Some of those “juniors” may only be renting but others are buying homes. Korzenik also said there was not a lot of hiring of young people during the recession, but that has changed. Their unemployment rate was above the national average but now it’s below.
“This group has seen enormous gains,” he said.
Korzenik said another driver of economic growth is the reshoring of manufacturing in the United States. The days of sending jobs overseas is changing and makers of heavier items are moving back to the U.S. Korzenik said Whirlpool has opened its first manufacturing plant in the U.S. in 30 years.
“It’s important for the creation of new jobs,” he said. “Manufacturing jobs may not pay what they paid at their peak, but they still pay more than service sector jobs.”
Korzenik said manufacturing jobs have what Congress calls “a high multiplier effect,” which means they tend to create other jobs in the economy.
Additionally, there has been a profound energy revolution to extent that the U.S. has overtaken Russia as the largest energy producer of the world.
“Ten years ago this was unthinkable,” Korzenik said. “It’s one of the drivers of manufacturing because energy in the United States is cheaper.
Korzenik also talked about the movement to natural gas in vehicles – something that’s becoming widespread with trucking fleets across the country.
Despite the apparent journey to normal, Korzenik was reminded of the proverb “a man plans and God laughs” – which means things can go wrong. Those things include inflation risks, currency debasement and inflation.
SOURCE: NWI Times
We have heard a great deal this year about manufacturing coming back to the United States. We hear about the diminishing wage gap in some Asian countries and the possibility of lower U.S. energy prices. In addition, a few small examples of goods currently made in China, but now being planned for U.S. manufacture, are pointed to as a harbinger of great things to come.
Written by: Ralph Gomory
Yet these discussions, as well as the reports and studies they often cite, are almost always purely economic cost analyses. They estimate future wages here and abroad, worker productivity and transportation costs, and they conclude that the manufacturing differences between the United States and Asia are diminishing. They then extrapolate these trends far enough into the future that going to Asia seems no longer worth the trip.
Non-market factors are given at most a minimal mention in many arguments that favor reshoring, as it is called, of Chinese manufactured goods. But China’s exchange rates, as we know, are set by its government, not by markets. The massive government subsidies of land, energy and technology, in addition to low- or no-cost loans, are barely mentioned. These are, however, the levers that have catapulted Chinese industries into global prominence in a very short span of years. And these government actions are not going away; if anything, they are increasing.
Americans are assured, based on flawed analysis, that when U.S. companies find it cheaper to make certain goods domestically, they will do so. What is overlooked in reaching that much-wished-for conclusion is that the Chinese, following the example of other Asian nations, simply do not allow important outcomes to be determined in that way.
China did not get to where it is today by allowing natural economic forces to decide the outcome. The reality is much closer to the exact opposite. An industry is targeted, and then the economic forces needed to obtain a dominant position — including subsidies, special tax rates, exchange rates and technology agreements — are put in place. This fundamental reality cannot be ignored.
One report I am particularly fond of, from the respected Boston Consulting Group, is powerfully titled “Made in America, Again.” The cover is a pleasure for any patriot to see: It is simply a large red, white and blue American flag with small figures unrolling the red stripes, while others check the stripes’ exact locations before fixing them into place. The cover graphically and dramatically suggests the glorious return of U.S. manufacturing.
However, what is inside the report is much less colorful but far more realistic. It concludes that if the United States maintains a “flexible” labor force and a good investment climate, it will become “increasingly attractive” for those who want to stop manufacturing goods in China that are consumed in the United States — attractive, that is, for those who, for one reason or another, find other countries in Southeast Asia unattractive.
This is the feeble manufacturing renaissance promised in the report. To get to this rather wishy-washy conclusion, all sorts of leaps of faith are required both in this specific report and in many similar analyses. One must accept that there will be double-digit yearly increases in Chinese wages. One must accept that American workers will remain more productive than Chinese workers. One must be willing to equate U.S. subsidies — few and far between and tiny as they are — with those employed by the Chinese government. And one must believe that the relatively few small manufacturing plants planning to move back to the United States show that forces are in place to close a yearly manufacturing trade gap measured today in the hundreds of billions of dollars.
But most of all, despite the evidence of recent history, there is a tacit assumption that the Chinese government would simply stand by and let these happy outcomes happen. This is unlikely; the Chinese government does not share our pure and simple faith in the unguided operation of markets.
That China adheres to its system is not surprising; its system has been working for it. What is more surprising is that our faith in our own system is so ingrained that we continue to believe in its benign results even in the absence of the free markets and free trade conditions on which those conclusions are based.
A real manufacturing renaissance in America — at least one based on reshoring from China — is not something we can expect. Forecasts that reach that much-desired conclusion by simply extrapolating cost analyses into the future are not realistic. There is far too much that China and other countries can do to shape the outcome. We would do better to consider what we can realistically do in today’s mercantilist world rather than continue to act as if we were living in a textbook world, a world shaped only by market forces.
About the writer:
Ralph Gomory
Research Prof. NYU, Pres. Emeritus, Alfred P Sloan Foundation, Former IBM SVP Science-Tech
Ralph Gomory
Research Prof. NYU, Pres. Emeritus, Alfred P Sloan Foundation, Former IBM SVP Science-Tech
Ralph Gomory was born May 7, 1929, in Brooklyn Heights, New York. He graduated from Williams College in 1950, studied at Cambridge University, and received his Ph.D. in mathematics from Princeton University in 1954. Gomory then served in the Navy (1954-57) and then was a Higgins Lecturer and Assistant Professor of Mathematics at Princeton before joining IBM’s newly formed Research Division in 1959 as a research mathematician.
In his student and graduate student years (Williams, Cambridge, Princeton), Gomory did research on nonlinear differential equations, but his years in the Navy turned his attention to the applied mathematics of operations research. Back at Princeton he obtained the first general cutting-plane algorithms, which established the field of integer programming. It remains an active area of research today.
At IBM Research in the early 1960’s, Gomory published papers with Paul Gilmore on the knapsack, traveling salesman and cutting-stock problems, and with T. C. Hu on flows in multi-terminal networks and continua. In the late 1960’s, he developed the asymptotic theory of integer programming and introduced the concept of corner polyhedra. In the early 1970’s, he collaborated with Ellis Johnson in investigating subadditive functions related to corner polyhedra that could also play a role in producing cutting-planes.
Gomory served as Chairman of IBM Research’s Mathematical Sciences Department from 1965-67 and 1968-70 during an important period of its growth and evolution. This period saw the beginning of Samuel Winograd’s work on limits of algorithms and of Benoit Mandelbrot’s work on fractals.
Gomory became Director of Research for IBM in 1970, with line responsibility for IBM’s Research Division. During his 18 years as Director of Research the Research Division made a wide range of contributions to IBM’s products, to the computer industry, and to science. The Zurich Research Laboratory did the work that resulted in two successive Nobel Prizes in physics, Yorktown Heights Research was the birthplace of what is now known as RISC architecture, and San Jose was the birthplace of the concept, theory and first prototype of relational databases.
Gomory, who had become the IBM Senior Vice President for Science and Technology retire
d f
rom IBM in 1989 and became President of the Alfred P. Sloan Foundation. During his tenure as President he led the foundation into a long list of fields relevant to major national issues. The foundation pioneered in the field of on-line learning supporting this work before there was even a public Internet, and then supported its growth to more than three million people taking courses for credit. They started the now widespread program of industry studies, and engaged a major program advocating a more flexible workplace. The foundation developed a novel and successful approach to the problem of producing minority PhD’s in scientific and technical fields. The foundation was early in perceiving the threat of bioterrorism and was active in that area for years before the events of 9/11. On the scientific side the foundation supported the widely recognized Sloan Sky Survey, which has made major contributions to the problem of dark energy and initiated a major worldwide effort to survey life in the oceans known as the Census of Marine Life. In December 2007, after 18 years as President, Gomory retired from the foundation and became a Research Professor at New York University’s Stern School of Business.
Gomory has served in many capacities in academic, industrial and governmental organizations. He was a Trustee of Hampshire College from 1977-1986 and of Princeton University from 1985-1989. He served on the President’s Council of Advisors on Science and Technology (PCAST) from 1984 to 1992, and again from 2001 to 2009. He served for a number of terms on the National Academies’ Committee on Science, Engineering and Public Policy (COSEPUP). He has recently joined STEP, the Board on Science Technology and Economic Policy of the National Academies.
Gomory has been a director of a number of companies including the Washington Post Company and the Bank of New York. He is currently a director of Lexmark International, Inc., and a small start-up company. He was named one of America’s ten best directors by Director’s Alert magazine in 2000.
Gomory has been elected to the National Academy of Sciences, the National Academy of Engineering, and the American Philosophical Society. He was subsequently elected to the Councils of all three societies. He has been awarded eight honorary degrees and many prizes including the Lanchester Prize in 1963, the Harry Goode Memorial Award of the American Federation of Information Processing Societies in 1984, the John von Neumann Theory Prize in 1984, the Medal of the Industrial Research Society in 1985, the IEEE Engineering Leadership Recognition Award in 1988, the National Medal of Science awarded by the President in 1988, the Arthur M. Bueche Award of the National Academy of Engineering in 1993, the Heinz Award for Technology, the Economy and Employment in 1998, the Madison Medal Award of Princeton University in 1999, the Sheffield Fellowship Award of the Yale University Faculty of Engineering in 2000, the International Federation of Operational Research Societies’ Hall of Fame in 2005, and the Harold Larnder Prize of the Canadian Operational Research Society in 2006.
While continuing his research on integer programming Gomory has written on the nature of technology development, research in industry, and industrial competitiveness, and on models of international trade involving changing technologies and economies of scale. He is the author, with Professor William Baumol, of the book Global Trade and Conflicting National Interests (MIT Press 2001).
A Wilson Sporting Goods factory in Ada, Ohio. (Photo: Skip Peterson, AP file)
Manufacturing activity in the U.S. expanded at the fastest pace in 2½ years last month, getting a boost from overseas growth and a strong year for the auto industry.
The manufacturing index at the Institute for Supply Management, a trade group of purchasing managers, rose to 56.4 in October. That’s up from 56.2 in September. A reading above 50 indicates growth.
It was the fifth straight gain for the index. A measure of new orders rose slightly, while a gauge of production fell but remained at a high level. Factories added jobs, though at a slower pace than the previous month.
A measure of export orders jumped to its highest level in nearly a year and a half, a sign of improving economies overseas.
Factories also benefited from a robust U.S. auto industry that is having its best year since the recession began.
Car sales have soared this year and overseas growth in Japan and Europe has picked up a bit.
China’s economy has also picked up after slowing earlier this year. A measure of manufacturing in China, released Friday, showed its best improvement in seven months.
Still, the shutdown slowed activity at companies that make metal products and electrical equipment, according to the ISM survey.
And factories barely increased their output in September, the Federal Reserve said on Monday. Automakers produced more, but that gain was offset by declines at companies that make computers, furniture and appliances.
Companies reduced demand for long-lasting factory goods in September, the Commerce Department said last week. Orders for industrial machinery, electrical equipment and other core capital goods fell 1.1%. August’s orders were revised down to a 0.4% gain, from 1.5%.
Economists pay particular attention to core capital goods, which exclude aircraft and defense-related goods, because they reflect business confidence.
Still, economists don’t expect manufacturing to boost economic growth in the coming months. Growth likely fell to an annual rate of just 1.5% to 2% in the July-September quarter, down from a 2.5% pace in the April-June period. Most economists expect similarly slow growth in the final three months of the year.
Contributing: Associated Press
It was the fifth straight gain for the index. A measure of new orders rose slightly, while a gauge of production fell but remained at a high level. Factories added jobs, though at a slower pace than the previous month.
A measure of export orders jumped to its highest level in nearly a year and a half, a sign of improving economies overseas.
Factories also benefited from a robust U.S. auto industry that is having its best year since the recession began.
Car sales have soared this year and overseas growth in Japan and Europe has picked up a bit.
China’s economy has also picked up after slowing earlier this year. A measure of manufacturing in China, released Friday, showed its best improvement in seven months.
Still, the shutdown slowed activity at companies that make metal products and electrical equipment, according to the ISM survey.
And factories barely increased their output in September, the Federal Reserve said on Monday. Automakers produced more, but that gain was offset by declines at companies that make computers, furniture and appliances.
Companies reduced demand for long-lasting factory goods in September, the Commerce Department said last week. Orders for industrial machinery, electrical equipment and other core capital goods fell 1.1%. August’s orders were revised down to a 0.4% gain, from 1.5%.
Economists pay particular attention to core capital goods, which exclude aircraft and defense-related goods, because they reflect business confidence.
Still, economists don’t expect manufacturing to boost economic growth in the coming months. Growth likely fell to an annual rate of just 1.5% to 2% in the July-September quarter, down from a 2.5% pace in the April-June period. Most economists expect similarly slow growth in the final three months of the year.
Contributing: Associated Press
SOURCE: USA Today
Manufacturing matters because it’s simply impossible to have a vibrant national economy without a healthy globally traded sector, and manufacturing is America’s most important traded sector.
Manufacturing has been the focus of much attention lately — a key theme of President Barack Obama’s Inauguration and State of the Union addresses and the subject of numerous recent books and articles. But why does manufacturing matter? Why should Washington in particular care? Most commentators miss the real reason.
And getting the answer right is imperative because many economists, like Nobel Laureate Gary Beckerand Columbia’s Jadish Bhagwati, persist in trying to convince policy makers that America can thrive without manufacturing, and in fact would be better off without it.
Here are some reasons that don’t really matter. Read more: http://www.industryweek.com/global-economy/real-reason-why-washington-should-care-about-manufacturing
And getting the answer right is imperative because many economists, like Nobel Laureate Gary Beckerand Columbia’s Jadish Bhagwati, persist in trying to convince policy makers that America can thrive without manufacturing, and in fact would be better off without it.
Here are some reasons that don’t really matter. Read more: http://www.industryweek.com/global-economy/real-reason-why-washington-should-care-about-manufacturing
SOURCE: Industry Week
A national manufacturing strategy would help U.S. industries stay on the cutting-edge of emerging technologies, enhance overall knowledge generation and thereby prevent economy-wide erosion of innovation capacity even if some market share is lost to overseas competitors.
A robust traded sector economy is essential to U.S. global competitiveness, and a strong manufacturing base is central to traded sector strength, as I have noted previously.
Unfortunately, manufacturing in the United States has lost competitive advantage in the last 15 years and unless this turns around significantly it will continue to be a drag on our efforts to fully recover from the Great Recession.
There is no inherent reason the United States could not run a significant trade surplus in manufacturing. America possesses the tools, talent, and resources to revive industrial production and our innovation economy.
Unfortunately, manufacturing in the United States has lost competitive advantage in the last 15 years and unless this turns around significantly it will continue to be a drag on our efforts to fully recover from the Great Recession.
There is no inherent reason the United States could not run a significant trade surplus in manufacturing. America possesses the tools, talent, and resources to revive industrial production and our innovation economy.
Read the entire article: http://www.industryweek.com/competitiveness/why-america-needs-national-manufacturing-strategy?page=1
SOURCE: Industry Week
WASHINGTON (AP) — Americans’ confidence in the economy fell this month to the lowest level since April, as many worried about the impact of a 16-day partial government shutdown. The decline could weigh on spending and economic growth.
The Conference Board said Tuesday that its index of consumer confidence dropped to 71.2 in October, down from 80.2 the previous month. September’s figure was revised slightly higher.
Consumers became particularly pessimistic in their outlook on the economy six months from now, while their assessment of current economic conditions declined by much less. They also expect less hiring in the months ahead. Consumers’ confidence is closely watched because their spending accounts for 70% of economic activity.
Americans became more confident in the spring as job gains were healthy and economic growth improved. The Conference Board’s measure reached 82.1 in June, the highest in 5 ½ years. That’s still below the reading of 90 that is consistent with a healthy economy.
Confidence has dropped in three of the four months since June. The shutdown already caused a drop this month in the University of Michigan’s measure of consumer sentiment. Americans made more negative references to the federal government’s impact on the economy in October than at any time in the 50-year history of the survey, the university said.
Falling confidence can cause Americans to spend less, which would slow the economic growth. But sometimes consumers spend more, even when they say they are less confident.
Weaker job growth is also weighing on consumers’ outlook. Employers added an average of just 143,000 jobs a month from July through September. That’s down from 182,000 a month in April through June and 207,000 in the first three months of the year.
Sluggish spending is likely to weigh on economic growth. Most economists predict growth slowed in the July-September quarter to an annual rate of about 1.5% to 2%, down from a 2.5% rate in the April-June quarter. And the shutdown is likely to keep growth at a tepid pace for the final three months of the year.
Consumers became particularly pessimistic in their outlook on the economy six months from now, while their assessment of current economic conditions declined by much less. They also expect less hiring in the months ahead. Consumers’ confidence is closely watched because their spending accounts for 70% of economic activity.
Americans became more confident in the spring as job gains were healthy and economic growth improved. The Conference Board’s measure reached 82.1 in June, the highest in 5 ½ years. That’s still below the reading of 90 that is consistent with a healthy economy.
Confidence has dropped in three of the four months since June. The shutdown already caused a drop this month in the University of Michigan’s measure of consumer sentiment. Americans made more negative references to the federal government’s impact on the economy in October than at any time in the 50-year history of the survey, the university said.
Falling confidence can cause Americans to spend less, which would slow the economic growth. But sometimes consumers spend more, even when they say they are less confident.
Weaker job growth is also weighing on consumers’ outlook. Employers added an average of just 143,000 jobs a month from July through September. That’s down from 182,000 a month in April through June and 207,000 in the first three months of the year.
Sluggish spending is likely to weigh on economic growth. Most economists predict growth slowed in the July-September quarter to an annual rate of about 1.5% to 2%, down from a 2.5% rate in the April-June quarter. And the shutdown is likely to keep growth at a tepid pace for the final three months of the year.
SOURCE: USA Today
Prospective job seekers meet Oct. 24 with company reps at the annual “Honor a Hero — Hire a Vet” job fair in Van Nuys, Calif. (Photo: Frederic J. Brown, AFP/Getty Images)
The 16-day government shutdown hurt jobs growth in the private sector this month with only 130,000 jobs added, a drop if 15,000 from September, according to ADP’s National Employment Report.
September also didn’t add as many jobs as ADP originally reported. It revised private sector payroll increases from 166,000 to 145,000.
Service industries added the most jobs, but still fewer than last month at 107,000 compared with 130,000 in September. Trade, transportation, and utilities businesses had the biggest October jobs growth within the service sector.
October jobs performance among private employers was “well below the average of the last 12 months,” ADP President and CEO Carlos Rodriguez said in a company statement.
He added that large businesses fared better than small businesses in terms of payroll growth between September and October.
Mark Zandi, Moody’s Analytics chief economist, warned that if private sector jobs growth doesn’t recover, the country could face an increase in unemployment.
“The government shutdown and debt limit brinksmanship hurt the already softening job market in October,” he said in an ADP release. “Any further weakening would signal rising unemployment.”
Service industries added the most jobs, but still fewer than last month at 107,000 compared with 130,000 in September. Trade, transportation, and utilities businesses had the biggest October jobs growth within the service sector.
October jobs performance among private employers was “well below the average of the last 12 months,” ADP President and CEO Carlos Rodriguez said in a company statement.
He added that large businesses fared better than small businesses in terms of payroll growth between September and October.
Mark Zandi, Moody’s Analytics chief economist, warned that if private sector jobs growth doesn’t recover, the country could face an increase in unemployment.
“The government shutdown and debt limit brinksmanship hurt the already softening job market in October,” he said in an ADP release. “Any further weakening would signal rising unemployment.”
SOURCE: USA Today
Toledo, Ohio-based glass fiber reinforcements and engineered materials producer Owens Corning will invest $120 million to establish a manufacturing facility at the N.C. Certified Gastonia Technology Park in Gastonia, N.C., and create 110 jobs.
The facility will include a state-of-the-art manufacturing line, coating capability, and research and development resources, and will have potential for future expansion. It is expected to be completed in mid-to-late 2015. The additional production will help Owens Corning expand its glass nonwovens business in North America.
“Gastonia provides a great foundation for our new glass nonwoven facility with its location near the Charlotte and Research Triangle regions, where there are particular concentrations of skills needed for this business; its proximity to key customers; and its attractive business environment,” said Arnaud Genis, group president, Owens Corning’s Composite Solutions Business. “The Gastonia operation will support growing customer demand for glass non-woven products serving the global building materials market, complementing our existing facilities in Europe and North America, and enhancing Owens Corning’s leadership position in the provision of glass nonwoven technologies.”
The company reports its glass fiber materials are used in more than 40,000 end-use composites applications in the global transportation, industrial and construction industries.
SOURCE: Textile World
NEW YORK (AP) — Team USA will now wear the Made in the USA label. Every article of clothing made by Ralph Lauren for the U.S. Winter Olympic athletes in Sochi, including their opening and closing ceremony uniforms and their Olympic Village gear, has been made by domestic craftsman and manufacturers.
During the 2012 games in London, it was a flashpoint in the media and among Washington politicians that much of the U.S. apparel was made overseas, especially in China.
Ralph Lauren Corp., which has been making most of the athletes’ clothes since 2008 when it took over from Canadian clothier Roots, got the message.
“We have worked incredibly hard as a company to go across America to find the best partners to help us produce the Olympic uniforms at the highest quality for the best athletes in the world,” said David Lauren, the company’s executive vice president of advertising, marketing and corporate communications.
They used more than 40 vendors, from ranchers in the rural West to yarn spinners in Pennsylvania to sewers in New York’s Garment District for the closing ceremony outfits unveiled Tuesday. The ensemble includes a navy peacoat with a red stripe, a classic ski sweater with a reindeer motif and a hand-sewn American flag, and a tasseled chunky-knit hat.
(Individual clothes for competition are made by different, mostly athletic-gear brands, depending on the sport, technical aspects and sponsorship deals. Those outfits didn’t seem part of the earlier overseas outcry, but some companies, such as The North Face, which is making the freeskiing uniforms, have committed to U.S. manufacturing, too.)
Figure skater Evan Lysacek, who won gold in Vancouver in 2010, said the ceremonial uniforms make the athletes stand a little prouder.
“As an athlete, the clothing means even more than you’d think. The training, the sacrifices, the lifestyle, which is not glamorous and can be grueling and trying at times, all seem to come together in the moment when you realize you are part of the Olympic team,” he said. “The moment you put on those first pieces of the American team clothes, you feel like it’s real.”
Moving production to the U.S., though, was a lesson in the state of American manufacturing. It was hard to come by facilities that could create the quantity and quality needed for the Olympic uniforms and the versions that will be sold to the public, David Lauren said. As a result, there are fewer pieces in the collection for 2014.
During the London flap, he said, “what no one wanted to look at was the true complexity of making Olympic uniforms. We would have done it here if we could, but it was so much more complicated than people realized. Lots of places said they could help us make them, but when we called them, they couldn’t. It was grandstanding by a lot of companies. But we have since found manufacturers, and there are many more out there and we will keep reaching out.”
Jeanne Carver of rural Maupin, Ore., couldn’t quite believe the call that came 18 months ago.
Imperial Stock Ranch, founded in 1871 and now run by Carver and her husband, Dan, was at a make-or-break time, especially for its sheep business. They kept hearing that apparel manufacturing was going offshore and they wouldn’t ship U.S. wool overseas, Carver said. Then the phone rang in the summer of 2012.
“I thought the phone was the tinkling of sheep bells!” Carver said. But it was the product development director for the Ralph Lauren knitwear division. “I literally said to him, ‘You are kidding me!'”
When Robert Cramer told her he was looking for yarn for Team USA sweaters and asked for a tour, “The two things that went through my head were, ‘Oh my god, what will I wear? And what am I going to feed fashion people from New York?!'”
(She went with her “clean” cowboy boots and a menu that included lasagna made with ground beef from the ranch.)
The fact that these were for Olympic uniforms was “icing on the cake.” She was just so appreciative that a big company was paying attention to domestic ranchers and farmers, wool dyers and sewers.
The athletes are happy to see more Americans represented, too, says Lysacek.
“What I hear from the athletes on this topic is that we go out in the Olympic Games and in every competition, we represent the United States of America. I might not know every citizen, but I represent them,” he said. “The more people who are tied into the Olympic story, the closer to home each story hits.”
Ralph Lauren Corp., which has been making most of the athletes’ clothes since 2008 when it took over from Canadian clothier Roots, got the message.
“We have worked incredibly hard as a company to go across America to find the best partners to help us produce the Olympic uniforms at the highest quality for the best athletes in the world,” said David Lauren, the company’s executive vice president of advertising, marketing and corporate communications.
They used more than 40 vendors, from ranchers in the rural West to yarn spinners in Pennsylvania to sewers in New York’s Garment District for the closing ceremony outfits unveiled Tuesday. The ensemble includes a navy peacoat with a red stripe, a classic ski sweater with a reindeer motif and a hand-sewn American flag, and a tasseled chunky-knit hat.
(Individual clothes for competition are made by different, mostly athletic-gear brands, depending on the sport, technical aspects and sponsorship deals. Those outfits didn’t seem part of the earlier overseas outcry, but some companies, such as The North Face, which is making the freeskiing uniforms, have committed to U.S. manufacturing, too.)
Figure skater Evan Lysacek, who won gold in Vancouver in 2010, said the ceremonial uniforms make the athletes stand a little prouder.
“As an athlete, the clothing means even more than you’d think. The training, the sacrifices, the lifestyle, which is not glamorous and can be grueling and trying at times, all seem to come together in the moment when you realize you are part of the Olympic team,” he said. “The moment you put on those first pieces of the American team clothes, you feel like it’s real.”
Moving production to the U.S., though, was a lesson in the state of American manufacturing. It was hard to come by facilities that could create the quantity and quality needed for the Olympic uniforms and the versions that will be sold to the public, David Lauren said. As a result, there are fewer pieces in the collection for 2014.
During the London flap, he said, “what no one wanted to look at was the true complexity of making Olympic uniforms. We would have done it here if we could, but it was so much more complicated than people realized. Lots of places said they could help us make them, but when we called them, they couldn’t. It was grandstanding by a lot of companies. But we have since found manufacturers, and there are many more out there and we will keep reaching out.”
Jeanne Carver of rural Maupin, Ore., couldn’t quite believe the call that came 18 months ago.
Imperial Stock Ranch, founded in 1871 and now run by Carver and her husband, Dan, was at a make-or-break time, especially for its sheep business. They kept hearing that apparel manufacturing was going offshore and they wouldn’t ship U.S. wool overseas, Carver said. Then the phone rang in the summer of 2012.
“I thought the phone was the tinkling of sheep bells!” Carver said. But it was the product development director for the Ralph Lauren knitwear division. “I literally said to him, ‘You are kidding me!'”
When Robert Cramer told her he was looking for yarn for Team USA sweaters and asked for a tour, “The two things that went through my head were, ‘Oh my god, what will I wear? And what am I going to feed fashion people from New York?!'”
(She went with her “clean” cowboy boots and a menu that included lasagna made with ground beef from the ranch.)
The fact that these were for Olympic uniforms was “icing on the cake.” She was just so appreciative that a big company was paying attention to domestic ranchers and farmers, wool dyers and sewers.
The athletes are happy to see more Americans represented, too, says Lysacek.
“What I hear from the athletes on this topic is that we go out in the Olympic Games and in every competition, we represent the United States of America. I might not know every citizen, but I represent them,” he said. “The more people who are tied into the Olympic story, the closer to home each story hits.”
SOURCE: AP – Big Story
U.S. consumers are spending more money on domestic goods and services at the cost of imports, and this trend will likely boost the dollar in the medium term, according to a B. of A. Merrill Lynch Global Research report.
Real import growth has declined to less than 1% in the first half of 2013 from 11% in the first half of 2010, wrote David Woo, head of global rates and currencies research at Bank of America Merrill Lynch. At the same time, employment growth jumped to 1.6% from -1.7%. The divergence in directions of the two growth figures is “unusual,” since an upturn in the business cycle would typically increase both, as shown in the chart below.
So what’s happening? It appears that people in the U.S. are spending more on domestically produced goods and services and less on imports. To get a sense of how striking this is, take a look at the chart below. This is just the second time since 1990, excluding recessions, where spending growth on domestic goods and services is growing faster than imports, Woo said.
And the jump in spending on domestic goods and services has been propelled by some pretty interesting factors. That includes the rise in domestic energy production and the resurgence of U.S. manufacturing, perhaps most notably in the auto industry. The former was helped in part by fracking, said Woo in an interview, while the latter was driven by the U.S. bailout of the auto sector. Another contributing factor is the aging baby boomers,who tend to spend on goods and services that are hard to import. That includes medical care, food services and housing arrangements, Woo said. ”The bottom-line: a move away from imports is favoring domestic labor intensive sectors, creating jobs in the U.S.,” he wrote.
But what does this spending shift, also called import substitution, have to do with the direction of the U.S. dollar? The answer lies in the combination of the external balance, or trade balance, and the internal balance, or unemployment rate. Those two balances, trade balance and unemployment rate, are “the two most fundamental variables for any currency,” said Woo in an interview.
As domestic demand increases, that spending can either focus on domestic or imported goods and services. A focus on domestic goods, as is currently the case, would lead to a decline in the unemployment rate, according to the note.
And here’s the tie-in to the Federal Reserve, which currently keeps interest rates low. The Fed has set an unemployment threshold (not trigger, as officials like to remind us) of 6.5% unemployment for a change in interest rates.
So the shift in spending habits, or import substitution, which is creating jobs and driving the unemployment rate lower, will eventually lead the Fed to hike interest rates and push the dollar higher. “Ultimately, for the dollar to strengthen, we need the Fed to hike rates,” Woo said.
But what does this spending shift, also called import substitution, have to do with the direction of the U.S. dollar? The answer lies in the combination of the external balance, or trade balance, and the internal balance, or unemployment rate. Those two balances, trade balance and unemployment rate, are “the two most fundamental variables for any currency,” said Woo in an interview.
As domestic demand increases, that spending can either focus on domestic or imported goods and services. A focus on domestic goods, as is currently the case, would lead to a decline in the unemployment rate, according to the note.
And here’s the tie-in to the Federal Reserve, which currently keeps interest rates low. The Fed has set an unemployment threshold (not trigger, as officials like to remind us) of 6.5% unemployment for a change in interest rates.
So the shift in spending habits, or import substitution, which is creating jobs and driving the unemployment rate lower, will eventually lead the Fed to hike interest rates and push the dollar higher. “Ultimately, for the dollar to strengthen, we need the Fed to hike rates,” Woo said.
The bank has 2014 year-end forecasts of the euro fetching $1.22 and the dollar buying 108 Japanese yen.
SOURCE: Market Watch
If your pet has been eating jerky treats and is feeling sick, please get him to the vet.
Nearly 600 pets have died and thousands more have been sickened after eating jerky treats produced in China — and the Food and Drug Administration has no idea why.
The FDA on Tuesday announced that since 2007 it had logged around 3,600 reports of dogs and 10 reports of cats becoming ill after consuming Chinese-made treats made primarily with chicken and duck. Of those cases, 580 animals died.
Despite the growing number of reports, though, the FDA has been unable to identify the root cause. That’s not for a lack of effort. The agency said it had conducted more than 1,200 tests of Chinese jerky in recent years, visited the treats’ manufacturers, and reached out to foreign experts and leading academics for help.
Still, the spate of illnesses remains “one of the most elusive and mysterious outbreaks we’ve encountered,” Bernadette Dunham, head of the FDA’s Center for Veterinary Medicine, said in a statement.
The FDA has been raising red flags about the safety of Chinese-produced snacks for some time.
Back in 2007, the FDA launched an investigation into dog treats pulled from Walmart stores. And in January, two of the largest retailers of pet jerky — Nestle Purina Petcare and Del Monte Corp. — pulled select products from shelves after they were found to contain residual traces of banned antibiotics.
However, the FDA said at the time that there was “no evidence that raises health concerns,” and that the products were “highly unlikely” to be related to the mounting death reports. (The antibiotics in question are outlawed in the U.S., but widely used abroad, including in the European Union.) And while the rate of illnesses has fallen since that recall, the FDA theorizes that the drop was likely the result of a decreased demand for treats overall, and not the result of deadly meat leaving the market.
The rise in pet illnesses correlates to a massive spike in the volume of pet food imported from China. In 2003, the U.S. imported 1.1 million pounds of cat and dog food from China; that figure leapt to 85.8 million pounds in 2011.
Several federal lawmakers last year asked the FDA to issue a blanket recall of Chinese jerky treats, questioning why it had yet to do so despite thousands of reported illnesses. Former Rep. Dennis Kucinich (D-Ohio) labeled the products “death treats,” while Rep. Jerry McNerney (D-Calif.) wrote to the Chinese government asking it to consider a moratorium on production until the FDA could determine whether the products “contain tainted material.”
Given the booming business, though, China’s government declined the request, instead casting blame on the FDA.
“From the perspective of the Chinese side, there might be something wrong with the FDA’s investigation guidance,” Beijing wrote.
For its part, the FDA has said such a recall would be impractical given the government’s limited understanding of the cause of the illnesses. Instead, the agency has now called on veterinarians and pet owners to help them out and report any new suspected cases as soon as possible.
SOURCE: Yahoo News
If you have a dog or cat that became ill after eating jerky pet treats, the Food and Drug Administration (FDA) would like to hear from you or your veterinarian.
The agency has repeatedly issued alerts to consumers about reports it has received concerning jerky pet treat-related illnesses involving 3,600 dogs and 10 cats in the U.S. since 2007. Approximately 580 of those pets have died.
To date, FDA’s Center for Veterinary Medicine (CVM) has conducted more than 1,200 tests, visited jerky pet treat manufacturers in China and collaborated with colleagues in academia, industry, state labs and foreign governments. Yet the exact cause of the illnesses remains elusive.
To gather even more information, FDA is reaching out to licensed veterinarians and pet owners across the country. “This is one of the most elusive and mysterious outbreaks we’ve encountered,” says CVM Director Bernadette Dunham, DVM, Ph.D. “Our beloved four-legged companions deserve our best effort, and we are giving it.”
In a letter addressing U.S. licensed veterinarians, FDA lists what information is needed for labs testing treats and investigating illness and death associated with the treats. In some cases, veterinarians will be asked to provide blood, urine and tissue samples from their patients for further analysis. FDA will request written permission from pet owners and will cover the costs, including shipping, of any tests it requests.
Meanwhile, a consumer fact sheet will accompany the letter to veterinarians so they can alert consumers to the problem and remind them that treats are not essential to a balanced diet. The fact sheet also explains to consumers how they can help FDA’s investigation by reporting potential jerky pet treat-related illnesses online or by calling the FDA Consumer Complaint Coordinator for their state.
What to Look Out For
Within hours of eating treats sold as jerky tenders or strips made of chicken, duck, sweet potatoes and/or dried fruit, some pets have exhibited decreased appetite, decreased activity, vomiting, diarrhea (sometimes with blood or mucus), increased water consumption, and/or increased urination.
Severe cases have involved kidney failure, gastrointestinal bleeding, and a rare kidney disorder. About 60 percent of cases involved gastrointestinal illness, and about 30 percent involved kidney and urinary systems.
The remaining cases reported various symptoms, such as collapse, convulsions or skin issues.
Most of the jerky treats implicated have been made in China. Manufacturers of pet foods are not required by U.S. law to state the country of origin for each ingredient in their products.
A number of jerky pet treat products were removed from the market in January 2013 after a New York State lab reported finding evidence of up to six drugs in certain jerky pet treats made in China. While the levels of these drugs were very low and it’s unlikely that they caused the illnesses, FDA noted a decrease in reports of jerky-suspected illnesses after the products were removed from the market. FDA believes that the number of reports may have declined simply because fewer jerky treats were available.
Meanwhile, the agency urges pet owners to be cautious about providing jerky treats. If you do provide them and your pet becomes sick, stop the treats immediately, consider seeing your veterinarian, and save any remaining treats and the packaging for possible testing.
What FDA Is Doing
More than 1,200 jerky pet treat samples have been tested since 2011 for a variety of chemical and microbiological contaminants, from antibiotics to metals, pesticides and Salmonella. DNA testing has also been conducted, along with tests for nutritional composition.
In addition to continuing to test jerky pet treat samples within FDA labs, the agency is working with the Veterinary Laboratory Investigation and Response Network (Vet-LIRN), an FDA-coordinated network of government and veterinary diagnostic laboratories across the U.S. and Canada. (A summary of the tests is available on Vet-LIRN’s webpage.)
Inspections of the facilities in China that manufacture jerky products associated with some of the highest numbers of pet illness reports did not identify the cause of illness. However, they did identify additional paths of investigation, such as the supply chain of some ingredients in the treats. Although FDA inspectors have found no evidence identifying the cause of the spate of illnesses, they did find that one firm used falsified receiving documents for glycerin, a jerky ingredient. Chinese authorities informed FDA that they had seized products at the firm and suspended its exports.
To identify the root cause of this problem, FDA is meeting regularly with regulators in China to share findings. The agency also plans to host Chinese scientists at its veterinary research facility to increase scientific cooperation.
FDA has also reached out to U.S. pet food firms seeking further collaboration on scientific issues and data sharing, and has contracted with diagnostic labs.
“Our fervent hope as animal lovers,” says Dunham, “is that we will soon find the cause of—and put a stop to—these illnesses.”
This article appears on FDA’s Consumer Updates page, which features the latest on all FDA-regulated products.
Oct. 22, 2013
SOURCE: FDA
Ms. Bland in her space in the Industry City lot in Sunset Park, Brooklyn. | David B. Torch for The New York Times
Almost a year to the day since she began pitching the idea for Manufacture New York, a work hive for independent designers with outposts in Brooklyn and Manhattan, Bob Bland was on the verge of opening the doors to the first iteration of her vision.
“We gut-renovated this space with our bare hands,” she said one afternoon last month, casting her gaze over a 2,000-square-foot space at 23 West 36th Street that she is branding the Garment Center Pilot Program. “Although now I hear they’re rebranding as the garment district, which means we’ll have to redo all our branding.”
This represents a minor hiccup for Ms. Bland, 30, who has been rallying support and financing for an idea she said, “came to me fully formed, almost as a dream.” The garment district space will be dwarfed by the 160,000-square-foot clothing design and production center she is planning to open in 2014, in an industrial lot, Industry City, in Sunset Park, Brooklyn, that also houses artists’ studios, a microbrewery and the fashion label Rag & Bone (one of whose investors, the Theory chief executive Andrew Rosen, has also been of late carrying out plans to encourage local manufacturing with the Council of Fashion Designers of America).
Ms. Bland pointed out that New York’s garment manufacturing industry has seen a 90 percent decrease in jobs since the early 1990s and said the main motivation behind Manufacture New York “is to provide talented, hard-working designers with the resources they need to make a living doing what they love.” She said both facilities were “a culmination of my entire career in fashion, both as a corporate and an independent designer.”
“I was sick of hearing about small labels going bust,” she said, “and also very aware of the difficulties in keeping an ethical global supply chain.”
Jessica Lapidos of Tilly and William, a unisex label, was one of the first of some 40-odd designers who have already signed up, pleased by the promise of technology “typically accessible solely to big businesses,” she said, like pattern-making software, photo-studio space and sales representation. “They’re responding to the challenges of being a designer from every angle,” she said.
Ms. Bland said she would be able to accommodate up to 70 designers, charging them a monthly membership fee of $275 for access to design space alongside high-quality production facilities. “We want to unite the two,” she said, adding with a note of sarcasm, “How radical!”
Ms. Bland, who has worked on the design floor at labels including Tommy Hilfiger and Ralph Lauren, indeed sounds like a woman radicalized. “Outsourcing production overseas used to seem like a magic solution when it came to producing affordable product for a thrifty, trend-driven consumer,” she said. “But what are the actual costs?”
She described a Chinese factory she visited while working for Triple Five Soul, a streetwear label. “It was by no means a sweatshop, and was compliant with all the regulations on working conditions,” Ms. Bland said; still, teenage laborers lived in barrack-like dormitory accommodations and regularly worked 12-hour shifts.
The collapse of Rana Plaza in Bangladesh last April, causing more than 1,000 deaths, made addressing the issue seem even more urgent.
The daughter of two public schoolteachers, Ms. Bland was born in Washington. She attended the Savannah College of Art and Design and moved to Manhattan in 2003 to pursue a design career, before settling in Williamsburg two years later. She was quickly inspired by the flourishing creative entrepreneurialism there to set up her own label, Brooklyn Royalty, in 2006. “I had already grown tired of designing quality merchandise extolling the virtues of New York City, only to have it produced overseas,” she said. “But the reality is, it’s become almost impossible to produce a line here.”
Still, in what was then her day job at Ralph Lauren, “it seemed crazy to me that the only way to see the end product of my designs was to go into the store and buy it,” Ms. Bland said, adding that while there aren’t enough corporate jobs available to design-school graduates, “the vast majority of what we’re taught is geared toward us working for somebody else.” (She conceded that she had drawn many of her ideas from powerful conglomerates like Jones Group and LVMH, “who share vast resources among many brands, from marketing to sales, sourcing and production.”)
Business mentoring (“all the stuff you should have learned in fashion school and didn’t,” Ms. Bland said) will also be available to designers in the Manufacture New York stable, and she is planning to help arrange paid apprenticeships with designers like Nanette Lepore and Ralph Rucci who have expressed their support for the program.
This represents a minor hiccup for Ms. Bland, 30, who has been rallying support and financing for an idea she said, “came to me fully formed, almost as a dream.” The garment district space will be dwarfed by the 160,000-square-foot clothing design and production center she is planning to open in 2014, in an industrial lot, Industry City, in Sunset Park, Brooklyn, that also houses artists’ studios, a microbrewery and the fashion label Rag & Bone (one of whose investors, the Theory chief executive Andrew Rosen, has also been of late carrying out plans to encourage local manufacturing with the Council of Fashion Designers of America).
Ms. Bland pointed out that New York’s garment manufacturing industry has seen a 90 percent decrease in jobs since the early 1990s and said the main motivation behind Manufacture New York “is to provide talented, hard-working designers with the resources they need to make a living doing what they love.” She said both facilities were “a culmination of my entire career in fashion, both as a corporate and an independent designer.”
“I was sick of hearing about small labels going bust,” she said, “and also very aware of the difficulties in keeping an ethical global supply chain.”
Jessica Lapidos of Tilly and William, a unisex label, was one of the first of some 40-odd designers who have already signed up, pleased by the promise of technology “typically accessible solely to big businesses,” she said, like pattern-making software, photo-studio space and sales representation. “They’re responding to the challenges of being a designer from every angle,” she said.
Ms. Bland said she would be able to accommodate up to 70 designers, charging them a monthly membership fee of $275 for access to design space alongside high-quality production facilities. “We want to unite the two,” she said, adding with a note of sarcasm, “How radical!”
Ms. Bland, who has worked on the design floor at labels including Tommy Hilfiger and Ralph Lauren, indeed sounds like a woman radicalized. “Outsourcing production overseas used to seem like a magic solution when it came to producing affordable product for a thrifty, trend-driven consumer,” she said. “But what are the actual costs?”
She described a Chinese factory she visited while working for Triple Five Soul, a streetwear label. “It was by no means a sweatshop, and was compliant with all the regulations on working conditions,” Ms. Bland said; still, teenage laborers lived in barrack-like dormitory accommodations and regularly worked 12-hour shifts.
The collapse of Rana Plaza in Bangladesh last April, causing more than 1,000 deaths, made addressing the issue seem even more urgent.
The daughter of two public schoolteachers, Ms. Bland was born in Washington. She attended the Savannah College of Art and Design and moved to Manhattan in 2003 to pursue a design career, before settling in Williamsburg two years later. She was quickly inspired by the flourishing creative entrepreneurialism there to set up her own label, Brooklyn Royalty, in 2006. “I had already grown tired of designing quality merchandise extolling the virtues of New York City, only to have it produced overseas,” she said. “But the reality is, it’s become almost impossible to produce a line here.”
Still, in what was then her day job at Ralph Lauren, “it seemed crazy to me that the only way to see the end product of my designs was to go into the store and buy it,” Ms. Bland said, adding that while there aren’t enough corporate jobs available to design-school graduates, “the vast majority of what we’re taught is geared toward us working for somebody else.” (She conceded that she had drawn many of her ideas from powerful conglomerates like Jones Group and LVMH, “who share vast resources among many brands, from marketing to sales, sourcing and production.”)
Business mentoring (“all the stuff you should have learned in fashion school and didn’t,” Ms. Bland said) will also be available to designers in the Manufacture New York stable, and she is planning to help arrange paid apprenticeships with designers like Nanette Lepore and Ralph Rucci who have expressed their support for the program.
Heather Blond, another designer who has joined Manufacture New York, said she had done so as much out of practicality as principle. “As an ‘emerging designer,’ my quantities are still very low, so I don’t get to take advantage of the low overseas prices,” she said. “Add on the freight and duty costs and producing in China isn’t cost-saving anymore.”
Ms. Bland said design talent was being vetted on experience over aesthetic. “They need to have at least established a brand, with some sales and a proven customer base,” she said. “That way they’ll have a strong enough foundation for us to build on and help them take it to the next level.”
But unlike the CFDA’s recently established incubator fund, which seems to be aimed at more established names, Manufacture New York is committed to providing support at a grass-roots level, she said, adding: “And if a more built-out designer comes to me wanting to reshore their product, I’m happy to help with that, too.”
Her staff of eight includes a chief operating officer and chief financial officer, Nelis Parts, a former adviser on mergers and acquisitions in the investment banking division of Goldman Sachs; and a director of designer relations, Seth Friedermann, previously the managing editor of ModaCycle, an online fashion magazine.
Their first crowd-financing effort was put on hold when Ms. Bland downed tools on the project to focus on helping Restore Red Hook after Hurricane Sandy (“I raised $5,000 making T-shirts,” she said), but an Indiegogo.com campaign has since netted more than $40,000.
A further $20,000 came from the fiscal sponsor Fractured Atlas, through which they are accepting tax-deductible donations, while the majority of these funds have been spent leasing and building out the space at Industry City. “We have been soliciting offers for donated production equipment since October last year,” Ms. Bland said. “As beautiful as shiny new equipment is, we also want to show that with proper maintenance, good industrial equipment lasts for decades.”
More recently, Ms. Bland has been soliciting grants from city officials. “We’re working closely with people like Congresswoman Nydia Velázquez,” she said. “Most of what we’re pursuing right now is 2014 money, but there’s a lot available for incubators and domestic manufacturing.”
A newly forged partnership with Johnny’s Fashion Studio on 38th Street, a sample development and apparel-manufacturing firm with a client list that includes He
lmu
t Lang, Theory and Alexander Wang, was another coup. “Johnny Kim has been in business in the garment center for 30 years, and shares our vision for educating independent designers and reshoring production in the United States,” she said. (Johnny’s currently outsources larger production runs to China, Vietnam and Korea.)
And two blocks south at the Pilot Program, business is bustling, if not yet exactly booming. “We staged a full runway show during Fashion Week, have been running classes and producing samples in-house,” Ms. Bland said proudly. And where there may still be a way to go before the project is complete, she said, “we’re used to working from the ground up, helping people as much as we can with the resources we’ve got.”
ABOUT MANUFACTURE NY
Manufacture New York is an innovative, inclusive fashion incubator and vertically-integrated facility startup that has opened a Pilot Program in the Garment Center. They are dedicated to providing emerging designers with the resources + skills to streamline their production process and transform local manufacturing into the most affordable, innovative option for all.
They are also a diverse community of 50+ creatives who are already sharing resources + working together to make this project a reality.
Their headquarters will include a fully-equipped sampling room, manufacturing facilities, classroom space (open to the public), private studios for rent and a state-of-the art computer lab complete with the industry’s latest software for design + production. They will also offer a dedicated area for experimentation with environmentally-friendly fabric washes, dyeing, finishes and special textile applications.
They cannot achieve this goal without community support, so please sign up for updates, donate to they cause.
Contact information:
23 WEST 36TH STREET
NEW YORK, NEW YORK 10018
Phone(917) 349-9155
Email: BOB@manufactureny.org
Website http://www.manufactureny.org
Facebook: https://www.facebook.com/manufactureny
Pinterest: http://www.pinterest.com/manufactureny/
Tumblr: http://manufactureny.tumblr.com/
Twitter: https://twitter.com/ManufactureNY
SOURCE: New York Times
Meet Baxter, a robot. Just seven months on the line, he’s the newest member of the team at Pennsylvania manufacturer Rodon. / CBS News
(CBS News) Payroll processor ADP says private businesses added 166,000 new jobs in September. In the future, some of those could be manufacturing jobs returning from places like China, thanks to a new piece of technology already working an assembly line in Pennsylvania.
Meet Baxter, a robot. Just seven months on the line, he’s the newest member of the team at Pennsylvania manufacturer Rodon.
Factory VP Lowell Allen has put Baxter to work at what he’s best at: boring, repetitive jobs.
“Our people have really taken to Baxter,” said Allen. “He’s non-threatening. He’s helping them do their job.”
Baxter is designed to work safely alongside humans. Six facial expressions communicate status to human partners — a raised eyebrow signals confusion if something’s not right on the line. But most of time, Baxter works alone.
“And the best part I like is that Baxter doesn’t have a mouth,” said Allen. “So Baxter doesn’t talk.”
Slow but steady, Baxter toils on 24/7 without breaks or benefits. He costs only $22,000. And even with power and programming costs, Baxter is a $3-an-hour worker.
“He doesn’t necessarily replace anyone,” said Allen. “In fact, we need to hire skilled people to maintain and program those pieces of equipment. They just enable jobs to be performed more efficiently and therefore less expensively.”
Baxter is part of the new factory floor: a cutting-edge mix of people and technology that has helped to reduce production costs enough to bring manufacturing back from China.
“So we’re seeing now,” said Hal Sirkin of Boston Consulting Group, “is companies bring jobs back to the U.S. Not just because of patriotism but because of pure economics. The wages are rising in China, the U.S. is getting more competitive. The average American worker is at least 3 times as productive as the average Chinese worker.”
For Rodon and its sister company K’nex, that means 25 new jobs in three years. “We’re adding equipment, people and possibly breaking ground next door,” said Allen.
Sirkin said: “Had the automation not been put in place for a lot of these companies, we would have no jobs coming back to the U.S.”
Three to 5 million jobs are expected to be returning to the U.S. by the end of the decade.
Both The Rodon Group, and its sister company K’Nex are active members of The Made in America Movement. To find out how you can become a MAM Member email us at info@TheMadeinAmericaMovement.com.
SOURCE: CBS News
Cambria Production Facility – Cambria employees at work at the Cambria Production Facility in Le Sueur, Minn. L to R: Jordan Ristow, Doug Jones, Jim Wendroth, Nik Illiff (Courtesy of Cambria)
Studies show that the demand for skilled workers is growing throughout Minnesota — especially in rural areas and small towns where manufacturing is an integral part of the local economy.
But stiff competition for those workers and the impending retirement of thousands of Baby Boomers, could short-circuit the manufacturing industry’s ability to grow, according to an August report released by the St. Peter-based Center for Rural Policy and Development.
And that could mean bad news for what the center’s executive director Brad Finstad says could be considered the cornerstone of out-state Minnesota’s economy.
“Manufacturing is a key driver of greater Minnesota’s economy. Not only are the wages higher than other industries, but there is a tremendous ripple effect from manufacturing. Manufacturing induces more jobs than any other industry,” Finstad said.
“Training tomorrow’s workers will be critical to making sure Minnesota has the skilled workers manufacturers need. It’s especially important to continue the efforts of the Minnesota State Colleges and Universities campuses and other organizations working with manufacturers to identify their needs and develop specialized programs,” Finstad said.
New reports say Minnesota suffers a skills gap, which has made it hard for employers to find new, skilled workers.
A recently published national study, “Help Wanted,” puts Minnesota near the top in the portion of its jobs that require a post-secondary education — 70 percent of jobs require the extra training. The study also suggests that Minnesota residents will fall short.
And that could mean bad news for what the center’s executive director Brad Finstad says could be considered the cornerstone of out-state Minnesota’s economy.
“Manufacturing is a key driver of greater Minnesota’s economy. Not only are the wages higher than other industries, but there is a tremendous ripple effect from manufacturing. Manufacturing induces more jobs than any other industry,” Finstad said.
“Training tomorrow’s workers will be critical to making sure Minnesota has the skilled workers manufacturers need. It’s especially important to continue the efforts of the Minnesota State Colleges and Universities campuses and other organizations working with manufacturers to identify their needs and develop specialized programs,” Finstad said.
New reports say Minnesota suffers a skills gap, which has made it hard for employers to find new, skilled workers.
A recently published national study, “Help Wanted,” puts Minnesota near the top in the portion of its jobs that require a post-secondary education — 70 percent of jobs require the extra training. The study also suggests that Minnesota residents will fall short.
Read the entire story here: http://www.southernminn.com/st_peter_herald/news/article_80ad29eb-b171-5d6c-ae69-2a5d015e0a04.html?mode=story
SOURCE: St. Peter Herald
Today, October 4, is National Manufacturing Day. With events scheduled in communities throughout the country, National Manufacturing Day highlights the importance of the sector to the U.S. economy and affords businesses an opportunity to highlight the numerous career opportunities that exist for skilled individuals across a variety of manufacturing trades.
But as important as it is to celebrate the contribution manufacturing makes to a vibrant U.S. economy, the day should also recognize the significant trade barriers U.S. manufacturers continue to face in global markets—especially as a growing number of countries have resorted to embracing a particularly pernicious form of trade barrier known as localization barriers to trade (LBTs), as Information Technology and Innovation Foundation (ITIF) writes in Localization Barriers to Trade: Threat to the Global Innovation Economy.
Localization barriers to trade pressure foreign enterprises to localize economic activity in order to compete in a country’s marketplace. Essentially, LBTs force U.S. manufacturers to produce locally in order to serve certain countries’ markets in sectors ranging from life sciences, clean energy, and automobiles to information and communications technology (ICT) products. LBTs include policies such as local content requirements (which mandate that a certain percentage of goods sold in a country must be produced using local content); local production as a condition of market access; forced technology or intellectually property (IP) transfer as a condition of market access; and forced offsets.
For example, India’s Preferential Market Access Mandate would require that at least 25 percent of the ICT goods sold in Indian public procurement markets be produced from local content by 2014, with this requirement rising potentially to 100 percent for some ICT products by 2020. Argentina, Brazil, Indonesia, Malaysia, Russia, and Vietnam are among the many additional countries that have introduced local content requirements seeking to force manufacturing activity from the United States to their nations. These policies affect as much as $1 trillion in total global trade and reduce the amount of global trade by almost $100 billion annually. Meanwhile, China has mandated joint ventures and technology transfer as a condition for U.S. enterprises to compete in its high-speed rail, steel, auto, and wind energy markets. And many countries, including Argentina, Japan, Israel, India, and Turkey, mandate “forced offsets” stipulating local production as a condition of both public (e.g., defense) and private (e.g., civil aviation) procurements.
The effects of these practices inflict significant damage on the U.S. economy, particularly to the U.S. manufacturing sector. LBTs raise production costs for the manufacturers affected by them (for if it made economic sense to localize production in the destination country, companies would have already done so) and this leads to lower profits for these enterprises and less investment in their home nations. Moreover, by forcing businesses to manufacture abroad instead of in the United States, LBTs lead directly to facility closures, cutbacks, or diminished expansion for U.S. manufacturers, and this can and has stifled economic and employment growth in the United States. Finally, these practices further the movement of IP and technical capacity out of the United States, which only enhances the deterioration of the U.S. industrial commons and inhibits domestic innovation.
Unfortunately, countries’ have been introducing LBTs with general impunity, while the global trade community has lacked the proper tools—and will—to combat the practice. It is incumbent upon the United States to take a leading role in countering the global spread of LBTs and to make clear to trade partners that continued use of such policies will not be tolerated.
First, the United States should bring more trade disputes before the World Trade Organization regarding LBTs, while making it easier for U.S. manufacturers to file such cases. Second, the United States should begin to review countries’ rights to participate in trade-preference initiatives such as the Generalized System of Preferences (GSP). This program benefits developing nations by allowing thousands of products to enter the United States duty free, but it’s not a right and this privilege should be revoked for countries that persistently use LBTs. Finally, in negotiating trade agreements such as the Transpacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP), the United States must lead by example and push for the inclusion of strong and enforceable provisions against LBTs.
Localization barriers to trade represent one of the most insidious forms of protectionism in the modern global economy, and they are doing substantial damage to U.S. manufacturers and the broader U.S. economy. The U.S. must act or risk losing more manufacturing to our global competitors. The barriers American manufacturers face in global markets should not be forgotten on National Manufacturing Day.
Localization barriers to trade pressure foreign enterprises to localize economic activity in order to compete in a country’s marketplace. Essentially, LBTs force U.S. manufacturers to produce locally in order to serve certain countries’ markets in sectors ranging from life sciences, clean energy, and automobiles to information and communications technology (ICT) products. LBTs include policies such as local content requirements (which mandate that a certain percentage of goods sold in a country must be produced using local content); local production as a condition of market access; forced technology or intellectually property (IP) transfer as a condition of market access; and forced offsets.
For example, India’s Preferential Market Access Mandate would require that at least 25 percent of the ICT goods sold in Indian public procurement markets be produced from local content by 2014, with this requirement rising potentially to 100 percent for some ICT products by 2020. Argentina, Brazil, Indonesia, Malaysia, Russia, and Vietnam are among the many additional countries that have introduced local content requirements seeking to force manufacturing activity from the United States to their nations. These policies affect as much as $1 trillion in total global trade and reduce the amount of global trade by almost $100 billion annually. Meanwhile, China has mandated joint ventures and technology transfer as a condition for U.S. enterprises to compete in its high-speed rail, steel, auto, and wind energy markets. And many countries, including Argentina, Japan, Israel, India, and Turkey, mandate “forced offsets” stipulating local production as a condition of both public (e.g., defense) and private (e.g., civil aviation) procurements.
The effects of these practices inflict significant damage on the U.S. economy, particularly to the U.S. manufacturing sector. LBTs raise production costs for the manufacturers affected by them (for if it made economic sense to localize production in the destination country, companies would have already done so) and this leads to lower profits for these enterprises and less investment in their home nations. Moreover, by forcing businesses to manufacture abroad instead of in the United States, LBTs lead directly to facility closures, cutbacks, or diminished expansion for U.S. manufacturers, and this can and has stifled economic and employment growth in the United States. Finally, these practices further the movement of IP and technical capacity out of the United States, which only enhances the deterioration of the U.S. industrial commons and inhibits domestic innovation.
Unfortunately, countries’ have been introducing LBTs with general impunity, while the global trade community has lacked the proper tools—and will—to combat the practice. It is incumbent upon the United States to take a leading role in countering the global spread of LBTs and to make clear to trade partners that continued use of such policies will not be tolerated.
First, the United States should bring more trade disputes before the World Trade Organization regarding LBTs, while making it easier for U.S. manufacturers to file such cases. Second, the United States should begin to review countries’ rights to participate in trade-preference initiatives such as the Generalized System of Preferences (GSP). This program benefits developing nations by allowing thousands of products to enter the United States duty free, but it’s not a right and this privilege should be revoked for countries that persistently use LBTs. Finally, in negotiating trade agreements such as the Transpacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP), the United States must lead by example and push for the inclusion of strong and enforceable provisions against LBTs.
Localization barriers to trade represent one of the most insidious forms of protectionism in the modern global economy, and they are doing substantial damage to U.S. manufacturers and the broader U.S. economy. The U.S. must act or risk losing more manufacturing to our global competitors. The barriers American manufacturers face in global markets should not be forgotten on National Manufacturing Day.
SOURCE: The Hill
Read about Manufacturing Day 2013, it’s mission, and how you can get involved.
THE MFG DAY MISSION
MFG DAY addresses common misconceptions about manufacturing by giving manufacturers an opportunity to open their doors and show, in a coordinated effort, what manufacturing is — and what it isn’t. By working together during and after MFG DAY, manufacturers will begin to address the skilled labor shortage they face, connect with future generations, take charge of the public image of manufacturing, and ensure the ongoing prosperity of the whole industry.
Supported by a group of industry sponsors and co-producers, MFG DAY is designed to amplify the voice of individual manufacturers and coordinate a collective chorus of manufacturers with common concerns and challenges. The rallying point for a growing mass movement, MFG DAY empowers manufacturers to come together to address their collective challenges so they can help their communities and future generations thrive.
MFG DAY addresses common misconceptions about manufacturing by giving manufacturers an opportunity to open their doors and show, in a coordinated effort, what manufacturing is — and what it isn’t. By working together during and after MFG DAY, manufacturers will begin to address the skilled labor shortage they face, connect with future generations, take charge of the public image of manufacturing, and ensure the ongoing prosperity of the whole industry.
Supported by a group of industry sponsors and co-producers, MFG DAY is designed to amplify the voice of individual manufacturers and coordinate a collective chorus of manufacturers with common concerns and challenges. The rallying point for a growing mass movement, MFG DAY empowers manufacturers to come together to address their collective challenges so they can help their communities and future generations thrive.
ATTEND AN EVENT IN YOUR AREA
As of today, there are 806 MFG DAY events planned for tomorrow! Find an event to attend in your area. ATTEND MFG DAY EVENT
Ruth Kirchner, an instructor at the Dunwoody College of Technology in Minneapolis, Minn., showing students different kinds of fabrics and stitches. | Jenn Ackerman for The New York Times
MINNEAPOLIS — It was past quitting time at a new textile factory here, but that was not the only reason the work floor looked so desolate. Under the high ceilings, the fluorescent lights still bright, there were just 15 or so industrial sewing machines in a sprawling space meant for triple that amount.
The issue wasn’t poor demand for the curtains, pillows and other textiles being produced at the factory. Quite the opposite. The owner, the Airtex Design Group, had shifted an increasing amount of its production here from China because customers had been asking for more American-made goods.
The issue was finding workers.
“The sad truth is, we put ads in the paper and not many people show up,” said Mike Miller, Airtex’s chief executive.
The American textile and apparel industries, like manufacturing as a whole, are experiencing a nascent turnaround as apparel and textile companies demand higher quality, more reliable scheduling and fewer safety problems than they encounter overseas. Accidents like the factory collapse in Bangladesh earlier this year, which killed more than 1,000 workers, have reinforced the push for domestic production.
But because the industries were decimated over the last two decades — 77 percent of the American work force has been lost since 1990 as companies moved jobs abroad — manufacturers are now scrambling to find workers to fill the specialized jobs that have not been taken over by machines.
Wages for cut-and-sew jobs, the core of the apparel industry’s remaining work force, have been rising fast — increasing 13.2 percent on an inflation-adjusted basis from 2007 to 2012, while overall private sector pay rose just 1.4 percent. Companies here in Minnesota are so hungry for workers that they posted five job openings for every student in a new training program in industrial sewing, a full month before the training was even completed.
|
“It withered away and nobody noticed,” Jen Guarino, a former chief executive of the leather-goods maker J. W. Hulme, said of the skilled sewing work force. “Businesses stopped investing in training; they stopped investing in equipment.”
Like manufacturers in many parts of the country, those in Minnesota are wrestling with how to attract a new generation of factory workers while also protecting their bottom lines in an industry where pennies per garment can make or break a business. The backbone of the new wave of manufacturing in the United States has been automation, but some tasks still require human hands. Nationally, manufacturers have created recruitment centers that use touch screens and other interactive technology to promote the benefits of textile and apparel work. |
Patricia Ramon during a sewing and production specialist class as part of the Makers Coalition, an effort to create a skilled work force from scratch. | Margaret Cheatham Williams/The New York Times
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Here, they are recruiting at high schools, papering churches and community centers with job postings, and running ads in Hmong, Somali and Spanish-language newspapers. And in a moment of near desperation last year — after several companies worried about turning down orders because they did not have the manpower to handle them — Minnesota manufacturers hatched their grandest rescue effort of all: a program to create a skilled work force from scratch.
Run by a coalition of manufacturers, a nonprofit organization and a technical college, the program runs for six months, two or three nights a week, and teaches novices how to be industrial sewers, from handling a sewing machine to working with vinyl and canvas.
Eighteen students, ranging from a 22-year-old taking a break from college to a 60-year-old former janitor who had been out of work for three months, enrolled in the inaugural session that ended in June. The $3,695 tuition was covered by charities and the city of Minneapolis, though students will largely be expected to pay for future courses themselves.
After the course, the companies, which pay to belong to the coalition, sponsored students for a three-week rotation on their factory floors and a two-week internship at minimum wage. Then the free-for-all began as the members competed to hire those graduates who decide to pursue a career in industrial sewing.
“We need to think practically about getting skilled labor,” said Ms. Guarino, a founder of the training effort, known as the Makers Coalition. “The growth is there but we’re going to be in trouble if we don’t have a pool to draw from.”
Last year, there were about 142,000 people employed as sewing machine operators in the United States, according to the Bureau of Labor Statistics. In the Minneapolis-St. Paul metro area, which had almost 1.75 million workers last year — and where the unemployment rate as of July was 4.9 percent — only 860 were employed in 2012 as machine sewers..
Airtex had room for 50 of them. “We are looking for new sewers every day,” said Mr. Miller, the Airtex executive.
Wooing Immigrant Workers
Airtex’s roots in Minneapolis date to 1918, when Mr. Miller’s grandfather started the Sam Miller Bag Company, specializing in potato and feed bags. In the 1980s, Susan Shields founded a baggage company, and the two combined in 2000 as the Airtex Design Group, producing home textiles for companies like Pottery Barn and Restoration Hardware.
Soon after the merger, the company began producing in China, first in the Dongguan area, then Wuxi and Shanghai. Today, it still employs about 100 Chinese workers through a partner factory in Dongguan, but production there is no longer the bargain it once was, said Ms. Shields, Airtex’s president.
Initially Airtex paid $3 an hour on average for its Chinese workers; now, it pays about $11.80 an hour, including benefits and housing.
Its American factory-floor workers make about $9 to $17 an hour, though Airtex estimates benefits add another 30 percent to those figures.
As costs were rising in China, Airtex was also getting a new message from some of its clients: They wanted more American-made products.
Health care clients wanted medical slings and other sensitive medical products made domestically to ensure quality. Retailers did not want to pay overseas freight costs to import bulky items like pillows, and they wanted more flexibility in turning around designs quickly. As Airtex considered production in Vietnam and elsewhere, it became concerned about safety and quality issues — and increasingly interested in the American alternative.
“The opportunity for domestic business right now is unbelievable,” Ms. Shields said. “Either we start to bring it back here, more of it, or we start going to places that are marginally unsafe.”
But the lack of workers here in Minnesota made shifting business back home frustrating.
It had gotten to the point where new business sometimes felt like
a head
ache, not an opportunity. As Mr. Miller was headed to Chicago for a sales pitch in February, for instance, he was more worried than excited about landing a new contract.
“What concerns me is, if I get it,” he said, “where are we going to find the people?”
In the various waves of American textile production, dating to the 1800s, the problem of an available and willing work force solved itself.
Little capital was required — the boss just needed sewing equipment and people willing to work. That made it an attractive business for newly arrived immigrants with a few dollars to their name and, often, some background in garment work. Typically, the mostly male factory owners would recruit female workers from their old countries for the grunt work.
From the 1840s until the Civil War, it was new arrivals from Ireland and Germany. From the 1880s through the 1920s, it was Russian Jews and Italians, who would buy newly mass-produced Singer sewing machines and often set up shops in their tenement apartments with wives, daughters and tenants making up the initial work force, said Daniel Katz, provost of the National Labor College and author of a book about the garment industry.
Puerto Ricans, who were given citizenship on the eve of American entry into World War I, and black migrants from the South rounded out the work force until the 1960s, when Chinese and Dominican laborers took over, Mr. Katz said.
In San Francisco and New York, a small number of Chinese women came to the United States despite the Chinese Exclusion Act in 1882 barring Chinese laborers, making up a base of garment workers. After 1965, when immigration restrictions eased and Chinese were allowed to join family members, greater numbers of women came and that pool of workers grew.
“It was pretty well known that basically the day after you landed, you’d be taken to a factory by a relative to learn how to use an industrial sewing machine,” said Katie Quan, associate chair of the Labor Center at the University of California, Berkeley. In Los Angeles, Latinos made up much of the work force. And in the Carolinas, Hmong immigrants filled textile manufacturing jobs well into the 1990s, halting — or at least delaying — the migration of jobs overseas, said Rachel Willis, an American studies professor at the University of North Carolina.
Now, here in Minnesota, immigrants are once again being seen as the new hope.
Wanted: English and Math
Last fall, Lifetrack, a nonprofit group in St. Paul that helps immigrants, people on welfare and those with disabilities, began screening clients for possible admission to the sewing training program. Inside a gray-green room in a building on the edge of a four-lane road, people gathered around three tables: Burmese women at one of them, Ethiopian men at another, and at the back of the room an African-American woman, then 61, and a white man, 60, both born in America.
The first task was for students to test their English and math proficiency. Language skills are essential so workers can communicate with their bosses, but math skills are just as important in textile work because sewing requires precise measurements. As the students worked on the proficiency tests, Tatjana Hutnyak, Lifetrack’s director of business development, went over the basics.
Starting wages: $12 and $16 an hour. Transportation: The college, Dunwoody College of Technology, is on a bus line, but if students interview with a company not on a bus line, Lifetrack will help them get there. After passing career-readiness tests, students could qualify for the course, which would give them a certificate in industrial sewing — and, ideally, a job.
“They want to have a career rather than packaging, assembling, cleaning jobs,” said a Lifetrack manager, Dagim Gemeda, explaining why clients were interested in the sewing certification.
The Burmese women had come to Minnesota after spending time in refugee camps in Thailand. Paw Done had done piece work, sewing at home while she watched her children. The others had little sewing experience.
The Ethiopian men, who ranged in age from 21 to 42, had been in this country several years. A couple were students, one was a former custodian who had moved from another state to be close to his college-bound son, and a fourth, Abdulhakim Tahiro, had been laid off from his job at an airport car rental kiosk.
“It’s good, for my level it’s good,” Mr. Tahiro said of the starting wages.
Mr. Tahiro and Ms. Done enrolled in the course that started last January, when about half of the class were immigrants. Another student in the course, Patricia Ramon, 56, was an entrepreneur in Mexico with sewing experience. Ms. Ramon already had a job as a sewer at J. W. Hulme, but quit to take the course with the goal of obtaining certification. She wanted proof, she said, that she had technical skills.
“I am not like an old-time seamstress,” Ms. Ramon said. She expects to sew as a career, and said that making $16 an hour with health insurance would be enough to live on.
The students who were not immigrants often had difficult work histories or other problems. One of them was Lawrence Corbesia, the man sitting at the back table during the screening session. He was a former machine operator and custodial worker who had been looking for work for three months.
Another was Edward Johnson, 44, who was homeless when the course started. After food service and call-center jobs, he went to prison for felony assault, and had a tough time finding a job when he got out in 2009. He moved to Wisconsin to pick fruit, moved back to Minneapolis because he hated picking fruit, and was living on the streets and selling watercolor paintings when a homeless-center counselor hooked him up with the sewing program.
Until now, the only sewing experience Mr. Johnson had was sewing on buttons — a punishment meted out by his mother when he misbehaved. To save money, Mr. Johnson walked the 45 minutes to and from the college.
The program was overwhelming at first, he said, “so frustrating that sometimes I’d go home crying.” But he spent days at the library, watching YouTube videos on sewing techniques and studying terms used by the industry. By the end, it had gotten easier, he said, making pajamas, tote bags and aprons.
So many people are on government assistance, he said. “I’d rather learn a trade and go to work — and work,” he said.
A Long-Term Solution
Manufacturers elsewhere are also trying to build a new labor pool.
In a former glove factory in Conover, N.C., the Manufacturing Solutions Center has touch screens showing the technologies that textile manufacturers use today, while new machines spool out printed fabric. In Pennsylvania, a work force investment board has started a program with plant tours, YouTube videos of workers and a Web site promising that “contrary to popular opinion, many good jobs in manufacturing are still available.”
Other industry groups have created a curriculum for high schools on manufacturing, including Manufacturing Day, with factory tours for school groups.
Still the difficulty attracting young people frustrates Debra Kerrigan, a dean at Dunwoody overseeing the Minnesota program.
“I think it’s just the idea of, ‘Oh, I’m a sewer,’ that doesn’t thrill the average young individual today,” she said. “Skills for a lot of different industries are coming back now, machinists and automotive workers and sewers. I think if you have a skill when the economy gets bad, you’re more likely to succeed than someone who doesn’t.”
Compared with the other courses Dunwoody offers — graphic design, Web programming, robotics — sewing can seem a little old school, students say. But Elizabeth Huber, 22, who took a break from the University of Minnesota to take the sewing course, said that can also be a selling point.
Run by a coalition of manufacturers, a nonprofit organization and a technical college, the program runs for six months, two or three nights a week, and teaches novices how to be industrial sewers, from handling a sewing machine to working with vinyl and canvas.
Eighteen students, ranging from a 22-year-old taking a break from college to a 60-year-old former janitor who had been out of work for three months, enrolled in the inaugural session that ended in June. The $3,695 tuition was covered by charities and the city of Minneapolis, though students will largely be expected to pay for future courses themselves.
After the course, the companies, which pay to belong to the coalition, sponsored students for a three-week rotation on their factory floors and a two-week internship at minimum wage. Then the free-for-all began as the members competed to hire those graduates who decide to pursue a career in industrial sewing.
“We need to think practically about getting skilled labor,” said Ms. Guarino, a founder of the training effort, known as the Makers Coalition. “The growth is there but we’re going to be in trouble if we don’t have a pool to draw from.”
Last year, there were about 142,000 people employed as sewing machine operators in the United States, according to the Bureau of Labor Statistics. In the Minneapolis-St. Paul metro area, which had almost 1.75 million workers last year — and where the unemployment rate as of July was 4.9 percent — only 860 were employed in 2012 as machine sewers..
Airtex had room for 50 of them. “We are looking for new sewers every day,” said Mr. Miller, the Airtex executive.
Wooing Immigrant Workers
Airtex’s roots in Minneapolis date to 1918, when Mr. Miller’s grandfather started the Sam Miller Bag Company, specializing in potato and feed bags. In the 1980s, Susan Shields founded a baggage company, and the two combined in 2000 as the Airtex Design Group, producing home textiles for companies like Pottery Barn and Restoration Hardware.
Soon after the merger, the company began producing in China, first in the Dongguan area, then Wuxi and Shanghai. Today, it still employs about 100 Chinese workers through a partner factory in Dongguan, but production there is no longer the bargain it once was, said Ms. Shields, Airtex’s president.
Initially Airtex paid $3 an hour on average for its Chinese workers; now, it pays about $11.80 an hour, including benefits and housing.
Its American factory-floor workers make about $9 to $17 an hour, though Airtex estimates benefits add another 30 percent to those figures.
As costs were rising in China, Airtex was also getting a new message from some of its clients: They wanted more American-made products.
Health care clients wanted medical slings and other sensitive medical products made domestically to ensure quality. Retailers did not want to pay overseas freight costs to import bulky items like pillows, and they wanted more flexibility in turning around designs quickly. As Airtex considered production in Vietnam and elsewhere, it became concerned about safety and quality issues — and increasingly interested in the American alternative.
“The opportunity for domestic business right now is unbelievable,” Ms. Shields said. “Either we start to bring it back here, more of it, or we start going to places that are marginally unsafe.”
But the lack of workers here in Minnesota made shifting business back home frustrating.
It had gotten to the point where new business sometimes felt like
a head
ache, not an opportunity. As Mr. Miller was headed to Chicago for a sales pitch in February, for instance, he was more worried than excited about landing a new contract.
“What concerns me is, if I get it,” he said, “where are we going to find the people?”
In the various waves of American textile production, dating to the 1800s, the problem of an available and willing work force solved itself.
Little capital was required — the boss just needed sewing equipment and people willing to work. That made it an attractive business for newly arrived immigrants with a few dollars to their name and, often, some background in garment work. Typically, the mostly male factory owners would recruit female workers from their old countries for the grunt work.
From the 1840s until the Civil War, it was new arrivals from Ireland and Germany. From the 1880s through the 1920s, it was Russian Jews and Italians, who would buy newly mass-produced Singer sewing machines and often set up shops in their tenement apartments with wives, daughters and tenants making up the initial work force, said Daniel Katz, provost of the National Labor College and author of a book about the garment industry.
Puerto Ricans, who were given citizenship on the eve of American entry into World War I, and black migrants from the South rounded out the work force until the 1960s, when Chinese and Dominican laborers took over, Mr. Katz said.
In San Francisco and New York, a small number of Chinese women came to the United States despite the Chinese Exclusion Act in 1882 barring Chinese laborers, making up a base of garment workers. After 1965, when immigration restrictions eased and Chinese were allowed to join family members, greater numbers of women came and that pool of workers grew.
“It was pretty well known that basically the day after you landed, you’d be taken to a factory by a relative to learn how to use an industrial sewing machine,” said Katie Quan, associate chair of the Labor Center at the University of California, Berkeley. In Los Angeles, Latinos made up much of the work force. And in the Carolinas, Hmong immigrants filled textile manufacturing jobs well into the 1990s, halting — or at least delaying — the migration of jobs overseas, said Rachel Willis, an American studies professor at the University of North Carolina.
Now, here in Minnesota, immigrants are once again being seen as the new hope.
Wanted: English and Math
Last fall, Lifetrack, a nonprofit group in St. Paul that helps immigrants, people on welfare and those with disabilities, began screening clients for possible admission to the sewing training program. Inside a gray-green room in a building on the edge of a four-lane road, people gathered around three tables: Burmese women at one of them, Ethiopian men at another, and at the back of the room an African-American woman, then 61, and a white man, 60, both born in America.
The first task was for students to test their English and math proficiency. Language skills are essential so workers can communicate with their bosses, but math skills are just as important in textile work because sewing requires precise measurements. As the students worked on the proficiency tests, Tatjana Hutnyak, Lifetrack’s director of business development, went over the basics.
Starting wages: $12 and $16 an hour. Transportation: The college, Dunwoody College of Technology, is on a bus line, but if students interview with a company not on a bus line, Lifetrack will help them get there. After passing career-readiness tests, students could qualify for the course, which would give them a certificate in industrial sewing — and, ideally, a job.
“They want to have a career rather than packaging, assembling, cleaning jobs,” said a Lifetrack manager, Dagim Gemeda, explaining why clients were interested in the sewing certification.
The Burmese women had come to Minnesota after spending time in refugee camps in Thailand. Paw Done had done piece work, sewing at home while she watched her children. The others had little sewing experience.
The Ethiopian men, who ranged in age from 21 to 42, had been in this country several years. A couple were students, one was a former custodian who had moved from another state to be close to his college-bound son, and a fourth, Abdulhakim Tahiro, had been laid off from his job at an airport car rental kiosk.
“It’s good, for my level it’s good,” Mr. Tahiro said of the starting wages.
Mr. Tahiro and Ms. Done enrolled in the course that started last January, when about half of the class were immigrants. Another student in the course, Patricia Ramon, 56, was an entrepreneur in Mexico with sewing experience. Ms. Ramon already had a job as a sewer at J. W. Hulme, but quit to take the course with the goal of obtaining certification. She wanted proof, she said, that she had technical skills.
“I am not like an old-time seamstress,” Ms. Ramon said. She expects to sew as a career, and said that making $16 an hour with health insurance would be enough to live on.
The students who were not immigrants often had difficult work histories or other problems. One of them was Lawrence Corbesia, the man sitting at the back table during the screening session. He was a former machine operator and custodial worker who had been looking for work for three months.
Another was Edward Johnson, 44, who was homeless when the course started. After food service and call-center jobs, he went to prison for felony assault, and had a tough time finding a job when he got out in 2009. He moved to Wisconsin to pick fruit, moved back to Minneapolis because he hated picking fruit, and was living on the streets and selling watercolor paintings when a homeless-center counselor hooked him up with the sewing program.
Until now, the only sewing experience Mr. Johnson had was sewing on buttons — a punishment meted out by his mother when he misbehaved. To save money, Mr. Johnson walked the 45 minutes to and from the college.
The program was overwhelming at first, he said, “so frustrating that sometimes I’d go home crying.” But he spent days at the library, watching YouTube videos on sewing techniques and studying terms used by the industry. By the end, it had gotten easier, he said, making pajamas, tote bags and aprons.
So many people are on government assistance, he said. “I’d rather learn a trade and go to work — and work,” he said.
A Long-Term Solution
Manufacturers elsewhere are also trying to build a new labor pool.
In a former glove factory in Conover, N.C., the Manufacturing Solutions Center has touch screens showing the technologies that textile manufacturers use today, while new machines spool out printed fabric. In Pennsylvania, a work force investment board has started a program with plant tours, YouTube videos of workers and a Web site promising that “contrary to popular opinion, many good jobs in manufacturing are still available.”
Other industry groups have created a curriculum for high schools on manufacturing, including Manufacturing Day, with factory tours for school groups.
Still the difficulty attracting young people frustrates Debra Kerrigan, a dean at Dunwoody overseeing the Minnesota program.
“I think it’s just the idea of, ‘Oh, I’m a sewer,’ that doesn’t thrill the average young individual today,” she said. “Skills for a lot of different industries are coming back now, machinists and automotive workers and sewers. I think if you have a skill when the economy gets bad, you’re more likely to succeed than someone who doesn’t.”
Compared with the other courses Dunwoody offers — graphic design, Web programming, robotics — sewing can seem a little old school, students say. But Elizabeth Huber, 22, who took a break from the University of Minnesota to take the sewing course, said that can also be a selling point.
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“I like getting back to making things, to touching and manipulating materials rather than just pushing buttons or tweeting all day,” she said.
As the sewing course drew to a close, members of the Makers Coalition were jostling for the 18 graduates. Don Boothroyd at Kellé, a firm that makes dance costumes, hoped to snag 10 of them. J. W. Hulme wanted five, and was considering covering a student’s tuition for another course exchange for a contract promising that the student would work at Hulme for one year. Airtex hoped for five to 10 students. But only nine students completed the course — many dropped out for personal reasons, or decided they just weren’t interested in the work — and eight got jobs. The coalition is now revamping the curriculum to focus more on hands-on work and machine maintenance. |
Elizabeth Huber, 22, and several Makers Coalition students completing sewing samples. | Margaret Cheatham Williams/The New York Times
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Airtex decided it could not afford to wait for the coalition’s training program to work out its kinks. So, as the course proceeded, Airtex redoubled its efforts to find people who had some background in sewing. Mr. Miller and Ms. Shields offered a bonus to existing employees who brought in friends. They hosted an open house for prospective workers, and tried to think of groups they had not approached before — like a nonprofit that works with people with disabilities.
“I had a guy driving me to the airport the other day,” Mr. Miller said, “and he mentioned he knows a lot of people in the Cambodian community and I should call his pastor.”
Finally, Airtex decided it had to pay for training itself, even if that meant the company was less profitable for a while. It trains workers for a few hours a week, with a technical-college instructor and existing employees instructing new ones on topics like ergonomics and handling tricky materials. Airtex has since made 10 new hires for floor jobs, none of whom were highly experienced.
“The reality is, if we want good workers we know we have to train them and bring them in ourselves,” Ms. Shields said.
The factory floor now seems less barren because there are 25 sewing stations (there is still room for another 25). And most significantly, the additional workers mean the company can take on new work: Airtex has tripled its capacity, and is now making about 70 percent of its products in the United States.
SOURCE: New York Times
WASHINGTON — The gap in employment rates between America’s highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.
Rates of unemployment for the lowest-income families – those earning less than $20,000 – have topped 21 percent, nearly matching the rate for all workers during the 1930s Great Depression.
U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.
“This was no `equal opportunity’ recession or an `equal opportunity’ recovery,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. “One part of America is in depression, while another part is in full employment.”
The findings follow the government’s tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Monday, President Barack Obama stressed the need to address widening inequality after decades of a “winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground.”
“We have to make the investments necessary to attract good jobs that pay good wages and offer high standards of living,” he said.
While the link between income and joblessness may seem apparent, the data are the first to establish how this factor has contributed to the erosion of the middle class, a traditional strength of the U.S. economy.
Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available.
“It’s pretty frustrating,” says Annette Guerra, 33, of San Antonio, who has been looking for a full-time job since she finished nursing school more than a year ago. During her search, she found that employers had become increasingly picky about an applicant’s qualifications in the tight job market, often turning her away because she lacked previous nursing experience or because she wasn’t certified in more areas.
Guerra says she now gets by doing “odds and ends” jobs such as a pastry chef, bringing in $500 to $1,000 a month, but she says daily living can be challenging as she cares for her mother, who has end-stage kidney disease.
“For those trying to get ahead, there should be some help from government or companies to boost the economy and provide people with the necessary job training,” says Guerra, who hasn’t ruled out returning to college to get a business degree once her financial situation is more stable. “I’m optimistic that things will start to look up, but it’s hard.”
Last year the average length of unemployment for U.S. workers reached 39.5 weeks, the highest level since World War II. The duration of unemployment has since edged lower to 36.5 weeks based on data from January to July, still relatively high historically.
Economists call this a “bumping down” or “crowding out” in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many mid-skill jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.
Low-wage workers are now older and better educated than ever, with especially large jumps in those with at least some college-level training.
“The people at the bottom are going to be continually squeezed, and I don’t see this ending anytime soon,” said Harvard economist Richard Freeman. “If the economy were growing enough or unions were stronger, it would be possible for the less educated to do better and for the lower income to improve. But in our current world, where we are still adjusting to globalization, that is not very likely to happen.”
The figures are based on an analysis of the Census Bureau’s Current Population Survey by Sum and Northeastern University economist Ishwar Khatiwada. They are supplemented with material from the Massachusetts Institute of Technology’s David Autor, an economics professor known for his research on the disappearance of mid-skill positions, as well as John Schmitt, a senior economist at the Center for Economic and Policy Research, a Washington think tank. Mark Rank, a professor at Washington University in St. Louis, analyzed data on poverty.
The overall rise in both the unemployment rate and low-wage jobs due to the recent recession accounts for the record number of people who were stuck in poverty in 2011: 46.2 million, or 15 percent of the population. When the Census Bureau releases new 2012 poverty figures on Tuesday, most experts believe the numbers will show only slight improvement, if any, due to the slow pace of the recovery.
Overall, more than 16 percent of adults ages 16 and older are now “underutilized” in the labor market – that is, they are unemployed, “underemployed” in part-time jobs when full-time work is desired or among the “hidden unemployed” who are not actively job hunting but express a desire for immediate work.
Among households making less than $20,000 a year, the share of underutilized workers jumps to about 40 percent. For those in the $20,000-to-$39,999 category, it’s just over 21 percent and about 15 percent for those earning $40,000 to $59,999. At the top of the scale, underutilization affects just 7.2 percent of those in households earning more than $150,000.
By race and ethnicity, black workers in households earning less than $20,000 were the most likely to be underutilized, at 48.4 percent. Low-income Hispanics and whites were almost equally as likely to be underutilized, at 38 percent and 36.8 percent, respectively, compared to 31.8 percent for low-income Asian-Americans.
Loss of jobs in the recent recession has hit younger, less-educated workers especially hard. Fewer teenagers are taking on low-wage jobs as older adults pushed out of disappearing mid-skill jobs, such as bank teller or administrative assistant, move down the ladder.
Recent analysis by the Associated Press-NORC Center for Public Affairs Research shows that whites and older workers are more pessimistic about their opportunities to advance compared to other groups in the lower-wage workforce.
Eric Reichert, 45, of West Milford, N.J. Reichert, who holds a master’s degree in library science, is among the longer-term job seekers. He had hoped to find work as a legal librarian or in a similar research position after he was laid off from a title insurance company in 2008. Reichert now works in a lower-wage administrative records position, also helping to care for his 8-year-old son while his wife works full-time at a pharmaceutical company.
“I’m still looking, and I wish I could say that I will find a better job, but I can no longer say that with confidence,” he said. “At this point, I’m reconsidering what I’m going do, but it’s not like I’m 24 years old anymore.”
U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.
“This was no `equal opportunity’ recession or an `equal opportunity’ recovery,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. “One part of America is in depression, while another part is in full employment.”
The findings follow the government’s tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Monday, President Barack Obama stressed the need to address widening inequality after decades of a “winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground.”
“We have to make the investments necessary to attract good jobs that pay good wages and offer high standards of living,” he said.
While the link between income and joblessness may seem apparent, the data are the first to establish how this factor has contributed to the erosion of the middle class, a traditional strength of the U.S. economy.
Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available.
“It’s pretty frustrating,” says Annette Guerra, 33, of San Antonio, who has been looking for a full-time job since she finished nursing school more than a year ago. During her search, she found that employers had become increasingly picky about an applicant’s qualifications in the tight job market, often turning her away because she lacked previous nursing experience or because she wasn’t certified in more areas.
Guerra says she now gets by doing “odds and ends” jobs such as a pastry chef, bringing in $500 to $1,000 a month, but she says daily living can be challenging as she cares for her mother, who has end-stage kidney disease.
“For those trying to get ahead, there should be some help from government or companies to boost the economy and provide people with the necessary job training,” says Guerra, who hasn’t ruled out returning to college to get a business degree once her financial situation is more stable. “I’m optimistic that things will start to look up, but it’s hard.”
Last year the average length of unemployment for U.S. workers reached 39.5 weeks, the highest level since World War II. The duration of unemployment has since edged lower to 36.5 weeks based on data from January to July, still relatively high historically.
Economists call this a “bumping down” or “crowding out” in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many mid-skill jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.
Low-wage workers are now older and better educated than ever, with especially large jumps in those with at least some college-level training.
“The people at the bottom are going to be continually squeezed, and I don’t see this ending anytime soon,” said Harvard economist Richard Freeman. “If the economy were growing enough or unions were stronger, it would be possible for the less educated to do better and for the lower income to improve. But in our current world, where we are still adjusting to globalization, that is not very likely to happen.”
The figures are based on an analysis of the Census Bureau’s Current Population Survey by Sum and Northeastern University economist Ishwar Khatiwada. They are supplemented with material from the Massachusetts Institute of Technology’s David Autor, an economics professor known for his research on the disappearance of mid-skill positions, as well as John Schmitt, a senior economist at the Center for Economic and Policy Research, a Washington think tank. Mark Rank, a professor at Washington University in St. Louis, analyzed data on poverty.
The overall rise in both the unemployment rate and low-wage jobs due to the recent recession accounts for the record number of people who were stuck in poverty in 2011: 46.2 million, or 15 percent of the population. When the Census Bureau releases new 2012 poverty figures on Tuesday, most experts believe the numbers will show only slight improvement, if any, due to the slow pace of the recovery.
Overall, more than 16 percent of adults ages 16 and older are now “underutilized” in the labor market – that is, they are unemployed, “underemployed” in part-time jobs when full-time work is desired or among the “hidden unemployed” who are not actively job hunting but express a desire for immediate work.
Among households making less than $20,000 a year, the share of underutilized workers jumps to about 40 percent. For those in the $20,000-to-$39,999 category, it’s just over 21 percent and about 15 percent for those earning $40,000 to $59,999. At the top of the scale, underutilization affects just 7.2 percent of those in households earning more than $150,000.
By race and ethnicity, black workers in households earning less than $20,000 were the most likely to be underutilized, at 48.4 percent. Low-income Hispanics and whites were almost equally as likely to be underutilized, at 38 percent and 36.8 percent, respectively, compared to 31.8 percent for low-income Asian-Americans.
Loss of jobs in the recent recession has hit younger, less-educated workers especially hard. Fewer teenagers are taking on low-wage jobs as older adults pushed out of disappearing mid-skill jobs, such as bank teller or administrative assistant, move down the ladder.
Recent analysis by the Associated Press-NORC Center for Public Affairs Research shows that whites and older workers are more pessimistic about their opportunities to advance compared to other groups in the lower-wage workforce.
Eric Reichert, 45, of West Milford, N.J. Reichert, who holds a master’s degree in library science, is among the longer-term job seekers. He had hoped to find work as a legal librarian or in a similar research position after he was laid off from a title insurance company in 2008. Reichert now works in a lower-wage administrative records position, also helping to care for his 8-year-old son while his wife works full-time at a pharmaceutical company.
“I’m still looking, and I wish I could say that I will find a better job, but I can no longer say that with confidence,” he said. “At this point, I’m reconsidering what I’m going do, but it’s not like I’m 24 years old anymore.”
The future is bright for manufacturing and there is no shortage of opportunity for innovation and growth right here in the United States. To do that sustainably, however, we must confront an issue that many businesses are now facing — the Skills Gap.
Despite high unemployment, businesses are struggling to find skilled employees. Compounding the problem, millions of Baby Boomers are preparing to leave the workforce, and we haven’t even begun to account for growth.
Will it be possible to fill this gap? If we are struggling to find skilled people today, where will we find them in the future, as the problem magnifies? How do we fix this problem? There is a lot of talk about STEM education as the solution. Many people wonder, “What the heck is STEM?” They are then told it means, “Science, Technology, Engineering, and Math.” But that’s not really a sufficient explanation.
Frankly, STEM starts with the basics that all people should master in a rudimentary education. The ability to read, write, do math, and think critically are all key pillars, complimented by the ability to show up on time, communicate effectively, and work in teams. People with these skills can be developed and trained to pursue a menagerie of career pathways. Without those foundational skills, the future is bleak.
Click Bond is the global leader in the design and manufacture of adhesive-bonded fasteners and whether we’re talking about an entry level accountant, assembly technician, a quality inspector, a top design engineer or the people who package and ship our product across the globe, all aspects of our operation require these foundational skill sets on a daily basis. Unfortunately, even with record unemployment numbers, it remains challenging to find people who can demonstrate these basic, fundamental skills.
Some allege that this gap isn’t real and that’s it’s just an acute problem: manufacturers are just too picky. Others say manufacturers don’t pay enough or contend that manufacturing just represents dirty, low-level jobs.
On the notion that we are too selective –the ability to read, write, do math, problem-solve, show up on time, communicate effectively and work in teams isn’t some outrageous litmus test for employment; it’s the minimum threshold to have a chance at a future on any career path.
As for the argument that our pay is too low — in 2011, the average manufacturing worker in the United Sates earned $77,060 annually, including pay and benefits. The average worker in all industries earned $60,168. Additionally, manufacturing has the highest multiplier effect of any economic sector ($1.48 for every $1 spent).
With respect to our factories being dirty and our jobs being low level — people are constantly impressed with how clean and high tech manufacturing operations are in the 21st century. We sit at the forefront of environmental, safety, technology, security and quality standards. We can’t compete globally otherwise.
Beyond these misperceptions, the reality is, the greatest asset we have is our people. This explains why the vast majority of manufacturers fund robust training and education programs in partnership with our local high schools, community colleges and universities.
In Nevada we are engaging with leaders in higher education — especially our community colleges — to ensure that their investments in facilities and curriculum are worthwhile. Last year, we helped deploy a training program that, in just 16 weeks, takes people from the unemployment lines to full time jobs as machine operators. Well over 90% of the graduates achieved full time employment with benefits!
We also partner with workforce development leaders to ensure that training dollars are aligned with the current and future needs of the marketplace. When these needs are aligned with nationally portable, industry-driven credentials, everyone wins. The training provider gains absolute clarity on the quality of instruction necessary for a successful program, and the student earns a viable credential that proves mastery of a skill.
Further, through proactive engagement with our community and by opening the doors of our factories to students, teachers, parents and the broader community, we are dispelling antiquated stereotypes and, once again, getting people excited about “Made in the USA”.
The parts we make at Click Bond help make our fighter jets safer and ensure that millions of people can travel safely around the world without incident. Our colleagues are developing exciting technology and products that are achieving remarkable breakthroughs in medicine, renewable energy, IT, transportation, logistics and so much more. The reality is: manufacturing makes America strong. And all of us must work together to keep it that way.
Will it be possible to fill this gap? If we are struggling to find skilled people today, where will we find them in the future, as the problem magnifies? How do we fix this problem? There is a lot of talk about STEM education as the solution. Many people wonder, “What the heck is STEM?” They are then told it means, “Science, Technology, Engineering, and Math.” But that’s not really a sufficient explanation.
Frankly, STEM starts with the basics that all people should master in a rudimentary education. The ability to read, write, do math, and think critically are all key pillars, complimented by the ability to show up on time, communicate effectively, and work in teams. People with these skills can be developed and trained to pursue a menagerie of career pathways. Without those foundational skills, the future is bleak.
Click Bond is the global leader in the design and manufacture of adhesive-bonded fasteners and whether we’re talking about an entry level accountant, assembly technician, a quality inspector, a top design engineer or the people who package and ship our product across the globe, all aspects of our operation require these foundational skill sets on a daily basis. Unfortunately, even with record unemployment numbers, it remains challenging to find people who can demonstrate these basic, fundamental skills.
Some allege that this gap isn’t real and that’s it’s just an acute problem: manufacturers are just too picky. Others say manufacturers don’t pay enough or contend that manufacturing just represents dirty, low-level jobs.
On the notion that we are too selective –the ability to read, write, do math, problem-solve, show up on time, communicate effectively and work in teams isn’t some outrageous litmus test for employment; it’s the minimum threshold to have a chance at a future on any career path.
As for the argument that our pay is too low — in 2011, the average manufacturing worker in the United Sates earned $77,060 annually, including pay and benefits. The average worker in all industries earned $60,168. Additionally, manufacturing has the highest multiplier effect of any economic sector ($1.48 for every $1 spent).
With respect to our factories being dirty and our jobs being low level — people are constantly impressed with how clean and high tech manufacturing operations are in the 21st century. We sit at the forefront of environmental, safety, technology, security and quality standards. We can’t compete globally otherwise.
Beyond these misperceptions, the reality is, the greatest asset we have is our people. This explains why the vast majority of manufacturers fund robust training and education programs in partnership with our local high schools, community colleges and universities.
In Nevada we are engaging with leaders in higher education — especially our community colleges — to ensure that their investments in facilities and curriculum are worthwhile. Last year, we helped deploy a training program that, in just 16 weeks, takes people from the unemployment lines to full time jobs as machine operators. Well over 90% of the graduates achieved full time employment with benefits!
We also partner with workforce development leaders to ensure that training dollars are aligned with the current and future needs of the marketplace. When these needs are aligned with nationally portable, industry-driven credentials, everyone wins. The training provider gains absolute clarity on the quality of instruction necessary for a successful program, and the student earns a viable credential that proves mastery of a skill.
Further, through proactive engagement with our community and by opening the doors of our factories to students, teachers, parents and the broader community, we are dispelling antiquated stereotypes and, once again, getting people excited about “Made in the USA”.
The parts we make at Click Bond help make our fighter jets safer and ensure that millions of people can travel safely around the world without incident. Our colleagues are developing exciting technology and products that are achieving remarkable breakthroughs in medicine, renewable energy, IT, transportation, logistics and so much more. The reality is: manufacturing makes America strong. And all of us must work together to keep it that way.
SOURCE: Huffington Post
Cheaper labor may bring about more jobs, but workers have less spending power.
FORTUNE — There’s been some good news lately about U.S. manufacturing — that sector of American industry once considered vital to the growth of the nation’s middle class. It’s well known manufacturing has been declining for decades, but experts, and some across corporate America, have been saying that many factors signal that factory jobs that have gone to China and other parts of the world are returning.
During the first half of this year, the trade deficit on trade of manufactured goods narrowed to $225 billion from $227 billion a year ago, the Manufacturers Alliance for Productivity and Innovation reported Tuesday. While small, the Arlington, Va.-based research group considers the development a positive sign, especially after years of steep deficits.
The report follows another one released Tuesday, which expects U.S. manufacturing to make a comeback — potentially creating 2.5 million to 5 million factory and service jobs associated with more U.S. manufacturing over the next seven years. Boston Consulting Group says the shift is being driven by a variety of factors: Lower costs of natural gas and electricity have given U.S. manufacturers an advantage over other countries; so has the rising cost of labor in China, where the U.S. had lost many manufacturing jobs to.
During the first half of this year, the trade deficit on trade of manufactured goods narrowed to $225 billion from $227 billion a year ago, the Manufacturers Alliance for Productivity and Innovation reported Tuesday. While small, the Arlington, Va.-based research group considers the development a positive sign, especially after years of steep deficits.
The report follows another one released Tuesday, which expects U.S. manufacturing to make a comeback — potentially creating 2.5 million to 5 million factory and service jobs associated with more U.S. manufacturing over the next seven years. Boston Consulting Group says the shift is being driven by a variety of factors: Lower costs of natural gas and electricity have given U.S. manufacturers an advantage over other countries; so has the rising cost of labor in China, where the U.S. had lost many manufacturing jobs to.
One other factor — indeed, a big one — that deserves extra attention is the decline of labor costs in the U.S.
While cheaper labor has made manufacturers more likely to hire, it also means less income and spending power for workers.
Understandably many people get nostalgic whenever Washington policymakers and corporate America talk about reclaiming all that was good about U.S. manufacturing during its heyday. It takes us back to a time when the average American could buy a house and raise a family by working at the local factory until retirement. In some ways, the Obama Administration has indulged this vision of America; it has made a manufacturing recovery a top priority.
And yet, it’s hard to get that excited when we look at wages today and where they could go years from now.
A mediocre job is better than no job at all, especially at a time when so many struggle to find work. Manufacturing may create more jobs than it had in recent years, but it won’t renew America’s shrinking middle class so long as wages continue to stagnate.
The reality is U.S. factories rely more on machines than actual workers, says Jesse Rothstein, public policy and economics professor at University of California Berkeley. Machines produce more for less, and with bargaining powers of U.S. unions not being what they once were, it becomes less likely workers will earn more.
In a 2012 study, Rothstein found that hires by manufacturers of durable goods (items lasting three years or more) were paid an average of 0.3% less in 2010 and 2011 than workers newly hired in 2007 and 2008.
A similar trend plays out if we look at manufacturing overall: The average hourly earnings of production and nonsupervisory employees were $8.43 for 2012, lower than $8.70 in 2009 and $8.75 in 2003, according to data from the U.S. Bureau of Labor Statistics. To be sure, some higher-skilled manufacturing jobs, such as welding, have seen wages rise.
The Boston Consulting Group notes the U.S. is steadily becoming one of the cheapest places in the developed world to manufacture. By 2015, average labor costs will be about 16% lower in the U.S. than in the U.K., 18% lower than in Japan, 34% lower than in Germany, and 35% lower than in France and Italy.
If the firm is right, it’s likely that many more manufacturers will return jobs to the U.S., as it predicts. However, if trends in pay continue, it probably won’t rebuild the middle class.
SOURCE: Fortune – CNN
