Posted on May 20th, 2013 No comments
The recent collapse of a factory building in Bangladesh is a tragedy. The massive loss of life and the large number of injured are appalling on many accounts. What this major tragedy shows clearly is that the lure of low cost countries for manufacturing is not just about the low pay for the workers. In many cases not having to worry about worker safety and building standards is where major costs are reduced.
To be clear, low worker wages is part of the overall equation, but it is not the whole story. Some studies indicate that if certain garments were made in the United States, the overall price increase would be about a dime per item. In many cases, the extra cost of a “Made in the US” garment is worth the additional cost since it puts a neighbor to work and it increases the overall domestic economy.
According to the OSHA website, http://www.osha.gov/oshstats/commonstats.html, there are, on the average, 13 work related deaths a day (2011) in the United States. This number is down from an average of 38 a day in 1970. Even with all the regulations, and the cost to the individual business of complying with the regulations, there are still deaths.
We can argue whether or not the cost justifies the need, but the goal of the safety regulations should be to make the overall environment safe. This costs money to do, and in some cases it impinges on productivity. Sometimes this makes it hard to compete with places like Bangladesh where the workers are paid less, the factory costs less to build, the equipment does not have all the safety features so they cost less, etc. The overall cost of doing business is less in almost all areas, but at what cost.
The United States does have its own problems. We might have the regulations, but as the explosion at the West Fertilizer Company proved, the resources are just not there to do proper inspections. This leads to some cases where there is a violation that leads to a catastrophe. Even with its flaws, the system in the United States is still pretty good and should be what other countries strive for.
As consumers, we need to understand what our purchasing choices are what they mean. The label “Made in the U.S.A.” means more than jobs for the domestic economy. That label also means that the people responsible for the goods or service we buy were able to work in a safe environment, and usually for reasonable wages.
Posted on October 24th, 2012 1 comment
I have spent a great deal of time debating myself on whether or not this site should endorse a candidate for President. I have tried to keep this site neutral, as best I could, on the topics discussed. I know that my tendency to lean “Green” slants some of my opinions. There are some very important issues involving manufacturing that I have stayed away from due to their political nature. In general, websites, twitter accounts, and Facebook groups that deal with a specific topic should stick to that topic only and not branch out into unrelated issues in support of a particular candidate. It is fair to praise or criticize a particular candidate on the specific issues related to the site. I have seen some pro “Made In America” websites tweet about candidate issues having nothing to do with manufacturing.
Some of the major issues that affect manufacturing are very political. Issues such as healthcare costs, regulations, taxes, China and cheap energy are highly charged political issues. Which candidate you support depends on some clearly personal opinions on what is an acceptable balance in the results of a candidates stance.
Concerning healthcare and manufacturing, all the parties want to bring down the cost disadvantage of healthcare for our manufacturers. The issue that divides the different parties’ boils down to whom in this country gets coverage. The views range from getting rid of Medicare and Medicaid to complete government control of healthcare. The two major parties are, for the most part, in the middle of this spectrum. Just remember that many studies on ObamaCare often reflect the politics of the organization doing the study. The CBO’s analysis is considered impartial and is probably a good place to start.
The issue of regulations is a little more complicated and covers sub-topic from the EPA to labor laws. On many of the sub-topics the many issue is where to draw the line on what needs to be protected. Although there are some members of each party that go to the extreme, for the most part the parties are not that far apart. Does anyone really believe that one party wants to remove regulations so we have the ecological problems that China now has? On the other side, I find it hard to believe that there are politicians that would take down the economy to save a few trees.
On taxes and manufacturing, there is more in common than disagreement between the two major parties. It is not uncommon for either blue or red states to give tax breaks for manufacturing companies to locate in their area. The issue with taxes is that there is a big difference between statutory (or sometimes referred to as marginal) vs. effective tax rates. The United States has one of the highest marginal tax rates at 35.6%, as compared to Canada which has a 19.9% marginal rate. The effective tax rate, which is what companies actually pay, is lower in the United States (13.4%) than Canada (14.5%). The problem is that the larger manufacturers often have more offsets that lower their effective tax rates to, in some cases, nothing. The small to midsized manufacturers pay significantly more. What I am looking for from the candidates, and their parties, is to get rid of the disparity so most of the companies are paying around the average effective rate.
China is also a very complicated issue. Some of the manufacturing issues with China are driven by social issues. In the end, both parties will talk tough, but operate in a small band of what they can actually accomplish. Labeling China as a currency manipulator might make a good sound bite, but most economics feel it is bad policy.
Cheap energy is probably the best thing we can do for manufacturing and our economy in general. By cheap energy I mostly mean natural gas, coal, nuclear power. The supply of cheap natural gas will produce jobs in the chemical and other high energy need manufacturing. The problem with natural gas is fracking and the potential for environmental problems. For natural gas, coal and nuclear energy the issue is where you draw the line on what the acceptable risk to the environment is.
So who should you vote for if domestic manufacturing is your most important issue? You will have to find out for yourself. Research the topics above, and others that you think are important, so you can decide for yourself. I am happy that we now have two candidates that have clearly stated that they understand the importance of domestic manufacturing for the economy.
Posted on February 27th, 2012 No comments
For several years I have been promoting a “Made in America Christmas”. My family knows this so they try and give me gifts that were made in America. This year, one of my gifts was a Lodge Logic Combo Cooker, which is a cast iron skillet and lid/griddle combo. My first two thoughts about the gift were, “boy is this heavy” and followed immediately by “how am I going to use this on my electric stove. Fast forward a few weeks to a Sunday morning when I was making breakfast for the family. I had a craving for hash brown potatoes, so out comes the new skillet and I proceeded to make hash browns.
Being that the skillet was pre-seasoned, all I had to do was take it out of the box, wipe it with a dry piece of paper towel and I was good to go. When I put the skillet on the stove I told my wife that I was not sure how this was going to turn out. I then turned up the heat on the skillet and let it warm up. I used that time to read the pamphlet that came with the skillet and do a quick online search on cooking with a cast iron skillet on an electric stove. The initial information was not inspiring, since it documented problems and references to electric stove manufacturer’s statements that cast iron skillets should not be used on “glass top” electric stoves. As I read further down I found people who used cast iron without problems, with many using the cast iron item weekly. The major things I discovered from the online sources was that as long as I was careful not to drag the cast iron skillet across the stovetop and not overheat it, I would be fine. With this information in hand, I went back to cooking my hash browns. I was surprised at how well the cooking went. From onions to the shredded potatoes, the skilled did a great job. In all, the skillet took the heat well, maintained a consistent temperature, kept the food hot as my family took second and third helpings, it was easy to clean, and my hash browns came out great. In fact, my family told me that I should make hash browns again.
So now that I used the skillet, with great success, and my life became less hectic, I started looking into the Lodge Manufacturing Company. From their website I discovered that the company was founded in 1896 by Joseph Lodge, in South Pittsburg, Tennessee, and that they are the oldest family-owned cookware foundry in America. I was disappointed to learn that they import, from China, two lines of enamel coated cast iron cookware. I emailed the company for some information and got some general information with a pledge to answer any additional questions not covered in the supplied material.
From the supplied material I found that the Lodge Manufacturing Company is ahead of the curve on being green along with some basic company information. In doing an internet search I found that they also have been a good corporate citizen. They even have a $2,000/yr scholarship given out to a child/grand-child of their workers. The Lodge Manufacturing has 220 U.S. employees, and Mark Kelly, of the Lodge Manufacturing Company, wrote “based on continuing record demand for Lodge Cast Iron, we are reviewing our production needs and may expand our US foundry but the final decision hasn’t been made.” The company currently only attributes 6% of their sales to exports, but that percentage is growing.
The Lodge Manufacturing cites two main reasons why they import the enamel coated items from China; Production costs, and EPA restrictions on the manufacturing of bright-colored enamel. So odds are that if you want enamel coated cast iron items they are not made in the U.S. no matter who the manufacturer is.
As stated before, in my research I found many posts on the internet about cast iron skillets, Dutch ovens, etc. There are many avid users of cast iron on electric stoves, which I am now one of. I would also point out that when a brand name, for the cast iron item, was mentioned by someone; it was almost always Lodge. The company’s website says that some of the items made 100 years ago are still in use today. Based on my experience I can see why and I also understand why they are having record demand.
Posted on December 22nd, 2011 No comments
I just did a a Google Trends on the phrase “Made In America”. What struck me is, expect for a few spikes in volume, the average search volumn has bee pretty steady for years up until 2011. In 2011 we see a dramatic jump in search volume to three or four times the previous average. Although the search level is still relatively low, it is a great trend that shows people are starting to hear our message.
Looking for “Made In American” products does not jump because a few people have blog sites and twitter accounts pushing the idea. The increase is due to many of you out there who discuss the importance with their friends and neighbors. Letting people know that you looked for and found quality American made items encourages them to do the same. Keep up the good work everyone.
Posted on September 13th, 2011 1 comment
A blogger named Derek Singleton emailed me about his blog post concerning manufacturing, How Manufacturing Can Attract Young Talent Again. Derek does a great job in identifying how our society has short changed manufacturing as a career choice. I want to focus on one of Derek points, the disappearance of shop class. To me this is a great example of the cultural shift away from manufacturing. Derek correctly points out that we need to work on the public opinion of manufacturing, specifically manufacturing workers, and that adding shop class back into our schools is an important first step. Unfortunately, this is not an easy task.
For decades, economics have been talking about the “innovation economy” and the “knowledge worker”. The level and the fervor of the talk lead many to believe that an “innovation economy”, comprised of “knowledge workers”, was mutually exclusive with an economy containing with robust manufacturing. Public opinion made it seem that there was no future in manufacturing. Even without the “mutually exclusive” undertones, public opinion of the “knowledge worker” jobs was that they are the high paying jobs everyone would want.
Parents, with their child’s best interest at heart, were pushing their school systems for the education needed for the “knowledge worker” jobs. In the end they wanted computer classes over shop classes. When I was in high school, I had a job as a glazer at a sunglasses manufacturer. I did quite well at that company and when it came time to graduate high school, they offered me a fulltime job at a decent salary plus benefits. To make a long story short, my parents vetoed the idea and told me that had to go to college, which I did. Although, for several years I worked summers and school breaks at that company I eventually graduated college and got a job in my new field, as a chemist.
At the same time as the “knowledge worker” push, school districts where being pushed to measure students by using standardized testing. Spending limited educational budget money on classes that did not help a school’s rating were being trimmed or even cut completely. The end result was a public that started to think that the only way to succeed in life was to go to college and get a “knowledge job” while the education system became nothing more than a feeder system for colleges. If you were not “college material” there were less and less educational options for you. Less and less workers were taught the skills they needed for manufacturing jobs.
The good news is that many manufacturing jobs do not resemble the manufacturing jobs of old. Rows of workers doing tedious work have been replaced by automated systems. Gone are the sweatshops of yesteryear with a majority of manufacturing jobs, whether union or not, provided middleclass salaries and benefits. Providing a better understanding of the current state of the manufacturing worker will do a great deal of good toward attracting more quality workers to manufacturing.
We are at a crossroad. Public opinion has recognized that our economy needs to have domestic manufacturing to remain sound, while most people still do not want to work in manufacturing despite its importance. The current level of union bashing that is going on does not help since many people tie unions with manufacturing. Maybe, as Derek points out, if we start doing things to help educate people about manufacturing itself we can shift society back on a path for balanced economy, one that supports both manufacturing and “knowledge” jobs.