American consumers want to support and buy items with the label "Made in the USA," but the low prices of goods made overseas make buying less expensive items a realistic choice for people who live on limited incomes. This is one major conundrum facing manufacturers in America.
One survey reveals three-fourths of respondents want to buy goods made in America, but only 9 percent actually buy them. Low prices of foreign-made products is the main reason for eschewing American-produced items. The survey used a real-world example of similar pairs of pants sold by one retailer. The foreign-made pair cost $50 versus $85 for the garment made in America. Approximately two-thirds, or roughly 67 percent, of the survey respondents would choose to buy the less expensive pair versus 30 percent who would buy the more expensive pants.
The "Made in the USA" movement faces challenges other than low prices from foreign countries. The supply chain for cars made at American plants could include parts manufactured overseas. Although a Honda, Toyota or Nissan vehicle may come from a plant on American soil, parts for these cars could come from China, Japan, Mexico or Canada. The reality is that the parts are less expensive if made overseas. The components for large items may not come from American laborers.
The reality of buying "Made in the USA" items versus low-priced products is complicated. The economy recovered from the Great Recession, but employment conditions have yet to improve for millions of workers. Entry-level employees at Wal-Mart earn $10 an hour after passing their initial training. Wal-Mart converted just 150,000 part-time workers to full-time employees, which means the retail giant still keeps its costs low by hiring part-time help. The $10-per-hour mark is great, but if an employee works just 30 hours per week, he's not earning a livable wage. Full-time employees at Wal-Mart average $13.38 an hour.
Many manufacturers with higher-paying jobs seek college graduates for entry-level positions due to the changing nature of manufacturing work. The assembly line is less about physical work and more about technical know-how. High school graduates who used to be able to get a good manufacturing job are now out of the loop until they get a degree. Instead of going to work for a plant, a high school graduate may have to juggle working in retail or food service while attending college.
Perhaps the most interesting aspect of the aforementioned surveys is that people who make $100,000 per year would also buy less expensive goods if given the choice. One consumer cited the need to set aside money in savings and for retirement as a reason for buying foreign-made goods at low prices.
The sentiment is there for Americans who want to buy goods with the "Made in the USA" label. However, low prices continue to drive the consumer-based economy. Eventually, U.S. manufacturers may find a way to compete, but only when labor costs versus shipping and time-to-market expenses level the playing field.
Photo courtesy of Randy Robertson at Flickr.com
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