A few years ago, I was in the need of a new faucet in my bathroom. The old one was probably installed in the 1980's and had worn out. Being a do it your selfer, I went out to the local hardware store to look at various offerings, a totally economic thing to do! I went into a major big box store which had a counter at lest 30 feet long and 6 feet tall of faucets. There were kitchen faucets, bathroom faucets and utility faucets. Most major brands were represented, many of which I was familiar with. Which one, I thought would my wife like, which do I like. By happenstance, I turned over a box to see this American brand was manufacturing in China. I started looking at all the brands, out of that 30 feet counter, I could only find two brands that were either made in the USA or assembled in the USA "of foreign and domestic components".
As a small boy, I could remember my Grandfather telling me to buy American. He was a Union guy, and we have all seen the bumper stickers cajoling us to eat our imports. As an economics student, I refined that to say: Buy American, especially if the quality and price were superior or similar. Competition after all is a great thing. However, to see all these imported faucets gave me pause. China was starting to be the world's provider of many things. A Chinese company even owns a car company that Ford sold off a few years ago. As a citizen, I realize that manufacturing is important to our security as a nation. During World War II, if it wasn't for American production, we all may be filling out our tax forms in German or Japanese. Converting shoe factories to make boots, car factories to make tanks and planes allowed the Allies to push back Fascism and eventually end its reign of terror. What if, I thought, we had no production plants. Could China become imperialistic? Would the debt they hold make them our masters? After all the borrower is slave to the lender, I did not want to be a slave.
I chose the American assembled faucet and installed it. A couple days later, as this experience weighed on me, I searched the web and sent an email to the company, thanking them for a good product and for making it here. So often, we don't acknowledge the good, only when we feel slighted. And I started looking at different stores to determine if indeed I was worrying about nothing or if there was an issue. As I looked, at Walmart, Target, Kmart, Walgreens, and various other stores I felt like there was no longer a manufacturing base in this country. Even the company I worked for, Select Comfort, was selling bedding products imported from overseas, and some bed parts were made in Eastern Europe and China. Nothing wrong with that, but I thought, why?
It didn't seem to be price, the faucet I purchased was mid priced, there were imported faucets that cost more. I thought, how can China, or any other company, with all things being even, produce a product, ship it thousands of miles and sell it cheaper. Was it dumping? If it was, why were the products not the cheapest? There are several reasons why China is producing products that could be made here. Let's explore.
Taxes. The US corporate tax has been in the news. Some say it is the highest in the world, and because of it many multinationals leave money made overseas outside the country to avoid taxes. One way they can make that money productive is to set up factories overseas, employee foreign workers, produce products for import, and the manufacturing portion of profit (the largest portion by the way) avoids US tax law. Should we change the Tax Code to tax even that? That would be a mistake, businesses would just relocate to other countries to avoid the tax and still avoid the tax because they are not a US company. A prime example of this is AB Inbev, the beer giant. AB used to be headquartered in St. Louis, MO. Now St. Louis just houses the North American office, the corporation is headquartered in Europe. We really do need to rethink our tax code, to bring back jobs to the USA.
Environmental Regulations. Air pollution is a big issue in the US. But are we over zealous? If, for instance, a rubber part for a bed can be made in Eastern Europe and avoid the EPA, then the pollution is still in the atmosphere, but the jobs are not in the US. I am an environmentalist, I believe we need to clean up our messes, however, we need productivity to do that and without jobs there is no productivity.
Other regulations. Quotas for hiring, American with disability Act, Environmental studies and other regulation impact the establishment of manufacturing jobs. In all fairness these regulations are from people that are trying to make the country a better place. So Apple builds iPhones in China where they don't seem to mind working their people 12 hours a day and 6 days a week. Perhaps we should rethink some of these regulations to bring jobs back the the USA.
Do I advocate dirty air or water or overworking employee? No but we need to play on a level field or lose our sovereignty.
No comments:
Post a Comment