Every day Americans face choices on what products to buy to meet their every day needs. A 2010 Harris poll, showed three in five Americans (61%) say they are more likely to purchase something when the ad touts it is "Made in America." Recently, an ongoing poll on shows that 61% say they would buy American products if they existed.
Take a look at what you have in your own home and check the country of origin label. If you have set up your residence in the last 15 years, it is likely that most everything was made somewhere else besides America. It is highly likely that the majority of the products were “Made in China” because so much of the manufacturing of consumer products has been shifted offshore to Asia, especially China.
As our country slogs along in a recession that has never ended for many, more and more Americans are realizing that making and buying products made in America is essential to strengthening our economy, creating jobs and balancing our trade deficit.
Buying America Back
San Diego entrepreneur and businessman, Alan Uke, has written a book," Buying America Back: A Real-Deal Blueprint for Restoring American Prosperity," that provides a simple solution that "puts control in the hands of American consumers to make powerful buying choices to boost our economy and create jobs," as well as reduce our trade deficit.
Uke is the founder and president of Underwater Kinetics, which he started 41 years ago as a sophomore at the University of California San Diego. He holds more than 40 patents, and the majority of his SCUBA diving and his industrial lighting products are exported to more than 60 countries.
In his introduction, he writes, "Our future as a nation and as individuals is being threatened. Since our spending habits as consumers have contributed to this situation we can change our spending habits to reverse it... in order for a change to happen, consumers must demand to be more honestly and completely informed about what they are buying and where their money goes. To this end, we are starting a consumer movement to bring this to the attention of Congress. The goal of this movement and of this book is to encourage people to change their buying habits toward purchasing things that help the U.S. economy and job situation."
In chapter 1, Uke states that because consumer spending makes up 70% of the U. S. economy, we consumers have been encouraged to spend in order to spur the economy. The problem is that when the majority of the consumer goods we buy are imported, our shopping doesn't support our own economy and create jobs. Our money goes to support the economies of foreign countries. Uke writes, "In order to support our economy and American industries, we must have easily accessible, clearly communicated, and truthful information about a product’s entire origins."
In chapter 2, Uke shares his perspective as a business owner stating that "despite the challenges and the heartache, I like making my products in the U. S. because I want to help our country." He could move his production to Asia like many of his competitors, but he wants to keep his factory here in America, see more companies return, bringing jobs back with them, and see the American worker regain security and prosperity. As I have pointed out in my book and previous articles, he writes that "U.S. factories lost 5.2 million jobs from 2000 to 2010" while large, multinational corporations hired 2.4 million workers at their oversees operations.
Importance of Manufacturing in America
In chapter 3, "The Importance of Manufacturing in America," I really like his illustration of the jar of marbles that we as a nation have to use to trade with. When we buy something within the U.S., the marbles stay in the jar, but when we buy something from another country, the marbles go out of the jar. If they buy from us in the same amount that we buy, then the number of marbles in the jar stays the same, but if we buy more than they buy, our jar of marbles begins to empty. Our jar is becoming empty because in 1960, only 8% of the manufactured consumer products Americans purchased were imported, but today 60% are imported. Our deficit with China alone reached $260 billion in 2010, and the Department of Commerce estimates that each $1 billion in trade deficit translates to about 13,000 lost jobs. Manufacturing jobs now only make up 9% of the American workforce.
Imports to the U.S. now represent 17% of the gross domestic product (GDP) while manufacturing's share of the U.S. GDP has dropped to 11.5%. Alan quotes economist Ian Fletcher, who stated, "We could quite literally export our entire manufacturing output and still not balance our trade," and concludes that "we are importing almost 25% more than we are exporting."
Uke emphasizes that he isn't against trade because "it’s good for business, good for foreign relations, and good for development in all sectors of the economy." However, it's important for us to have balanced trade because "in 2010, each person's share of the annual trade deficit adds up to about $2,700." He comments that "creating free-trade agreements around the world are devastating for our country because they only benefit big businesses that can boost their profit margins by replacing our American workforce."
In chapter 4 on "How Competing Countries are Succeeding," Uke provides insights into how Germany, Japan, and South Korea have managed to keep a strong manufacturing base and successfully export more manufactured goods than they import. One of the key factors is that consumers in these countries prefer to buy products made in their own country even if they cost more than imports.
Chapter 7, "The Label Game," discusses the fact that current information provided on country of origin labels is "misleading, incomplete, inaccessible, or all of these." In order to have a "Made in USA" label, a product has to be "substantially all" made in the USA, defined as follows by the Federal Trade Commission:
- The product was last substantially transformed in the United States and U.S. manufacturing costs are at least 75% of the total manufacturing costs; or
- The product was last substantially transformed in the United States and all significant parts or components of the product were last substantially transformed in the United States.
The vagueness and looseness of these definitions have led companies to intentionally mislead the public with brand names that imply that the product was made in one country when it was actually made in another, such as expensive "American Girl" dolls that are actually made in China. Labels that say "assembled in the United States from domestic and foreign components" are even more confusing and vague.
It's even worse for consumers who purchase products online or from catalogs -- no information on country of origin is required to be provided. It is estimated that 11% of all retail sales will be Internet sales by 2015. A few companies, such as Levi Strauss, Patagonia, and Nike provide the locations of manufacturing plants around the world on their websites, and New Balance goes a step further in providing a comprehensive listing "detailing exactly which of its shoes are made in the United States, which ones are assembled or only partially made in the U.S., and which ones are entirely imported." Uke recommends that consumers be provided the country of origin information they need at the point of sale whether at a store or online.
In chapter 6, Uke presents his proposal for the U.S. government to require detailed country-of-origin labels for all manufactured products similar to the nutritional information labels now required on packaged food products. These labels now list all ingredients, the nutritional information about the food, and the possible presence of eight of the most common allergens in the product. He feels that it is important for consumers to not only "see the last place where the product was manufactured. You should be able to discern what portion of its components came from other places."
So far the only industry that provides detailed country of origin information is the automobile industry. The American Automobile Labeling Act of 1992 "requires all cars to have labels displaying the percentage of American/Canadian parts content, the country of its assembly, as well as the country of origin of the engine and transmission. Any car with less than 70% American/Canadian content is classified as an "import."
Chapter 7 describes what "The Transparent Label" would be: one that would include the cost by country of origin by both percentage and trade ratio, as well as the location of the company's headquarters. The percentage is the total cost of the product that is produced or transformed in a particular country. The trade ratio describes the amount of exports vs. imports for a country in relation to the United States. "A healthy, balanced trade ratio is close to 1.0" -- equal exports to imports. A number more than one means more U.S. exports to that country than imports from that country, and a number less than one means more imports from that country than U.S. exports to that country. Part Two of the book provides information on our major trading partners by detailing the state of their manufacturing and what kind of trade balance we have with that country. For example, we have a balanced trade relationship with New Zealand at 1.02, Switzerland at 1.06, and the United Kingdom at .97 whereas our balance with China is .25.
According to Uke, accessibility is just as important as accuracy. A consumer should be able to review this data before making a purchase whether it is in a store, online, or through a catalog. Since manufacturers succeed by providing products that consumers want to buy, the "ultimate goal is to apply consumer pressure on companies in order for them to see a direct, profitable benefit in relying on American labor and components."
Accurate labeling of the percentage of the product that is attributable to the U.S. will benefit manufacturers because consumers can select products that have the highest content of American parts and labor even if it doesn’t qualify for a "Made in USA" label under current law.
The last chapter shows how Americans can make every dollar count by choosing what products to buy. Uke writes that "it is really, we, the consumers, who are the power that can initiate the change. This power is located in the sum of our buying decisions. Our climb back to the top begins with where you spend your next dollar."
If every American would make the decision to buy American products and avoid imports from countries with which we have a deficit trade balance, we could make a real difference in our nation's economy. That's why Uke has called on Congress to pass a resolution to make July 1 to 7 "Buy American Week." Whether or not this resolution passes, I urge every American to make a personal resolution to "buy American" that week and continue doing so thereafter.
Michele Nash-Hoff is president of ElectroFab Sales. She is the author of "Can American Manufacturing Be Saved?"