Posted on 08/24/2003 7:03:07 AM PDT by cp124
Many won't be back; take shopping cart and check out why
07/20/03
By LEE ROOP Times Features Editor lroop@htimes.com
Two people walked into a Huntsville Wal-Mart last week on a challenge: Spend $400 on products made in America.
Two people walked out of Wal-Mart one hour later after randomly checking 40-plus items. Only 10 were made in the USA.
It isn't just Wal-Mart, America's largest retailer. Imported goods line shelves elsewhere, too. But what that means for American workers is the subject of a new economic debate.
"It's a huge issue," Wal-Mart spokesman Bill Wertz agreed Friday, confirming the import trend. "Customers are looking for value ... we try to stock what our customers want to buy."
New Hampshire economist Russ Thibeault threw out the Wal-Mart challenge July 10 on "Marketplace," an award-winning public radio show about the economy.
"Take a trip into your local Wal-Mart and spend your tax refund check on stuff that will generate U.S. jobs," Thibeault said in a commentary. "Chances are your shopping cart will be pretty empty when you get to the checkout counter."
Thibeault was discussing the strange fact that America's economy has been out of recession for well over a year, yet it continues to lose jobs. The National Bureau of Economic Research said Thursday that 1 million jobs have been lost during this recovery.
Many of those jobs aren't coming back, Thibeault thinks, despite tax cuts and strong consumer spending. They aren't coming back because they've moved overseas.
Hence, the Wal-Mart challenge.
Walking into Wal-Mart with a Times reporter was Randall Collier, 37, of Rogersville. Since 1987, Collier's primary business has been buying industrial sewing machines from plants closing here and shipping them to new plants in countries such as Peru.
"For every machine I sell," Collier said Wednesday, "there goes another American job."
Collier is promoting a new venture. He's trying to establish the USASells.com Website to give consumers a place to find American-made products.
"I don't know of one product we don't make," Collier said. "But if people don't start (buying here) now, they won't have a job themselves."
The Wal-Mart challenge was to spend the check coming soon to all American families with children. Congress this year increased the tax credit for raising children by $400 per child, and the money will be "advanced" to taxpayers in the form of checks beginning in a few weeks. The minimum check for a family with one child is $400.
Inside this typical Wal-Mart, clothes greet customers first. Clothes for the new school year would be a logical purchase with any cash windfall.
Virtually every brand is made overseas, including those with strong American images.
Levis jeans: Made in Cambodia.
Faded Glory shirts: Bangladesh.
Hanes underwear: Pakistan. Fruit of the Loom underwear: Honduras and El Salvador.
In the infant section, Cosco infant child seats are made in America, but Cosco playpens are made in China. Many companies seem to have one foot over the border.
A Disney "Winnie the Pooh" bear for baby? Made in China.
Fisher-Price diaper bag? China.
New shoes would be nice for fall.
Dr. Scholls? Made in China. Starter sneakers? China. Faded Glory sandals? China.
Curiously, America still makes the shoe strings and cushion insoles.
"Can we mention these?" Collier says, holding up a Murina brand T-shirt. It's a rare brand made in America.
"See these? These are Tee-Jays," Collier says. "They were in Florence, had 2,000 employees. They sold out. They're made in the Dominican Republic now."
The pattern continues across the store.
Foster Grant reading glasses? China.
Silk flowers? "All China now," Collier says. "They have a major distributing center in Haleyville."
Fabrics? India. China. Some are printed in America on imported fabric.
Rubbermaid and Igloo coolers? Made in the U.S.A.
Zebco fish fryers? El Salvador.
Rawlings baseball gloves? U.S.A.
Wilson, Prince and Head tennis rackets? China.
Black & Decker drills? Assembled in China.
Stanley hammers? Mexico.
Murray lawn tractors? The first in a line outside the Wal-Mart was made in Lawrenceburg, Tenn. The second? "Assembled in Lawrenceburg, Tenn."
Wal-Mart spokesman Wertz said the retailer stocks American items and regional favorites where it can. An Alabama example is Chilton County peaches, he said.
Wal-Mart also helps producers of American products like Denver's Orange Glow cleaner by selling that product in Wal-Mart stores abroad, Wertz said. The company has a special office devoted to that effort.
What economists wonder now is whether an up-and-down cycle of imports and exports has become a steady downward trend.
Collier estimates more than 5,000 textile and manufacturing jobs have left the Shoals area since the economy went global.
"And when (laid-off workers) went on unemployment, they went to the cheapest place they could to shop," he said. "They took their unemployment checks and went to Wal-Mart."
I had a hard time believing it.
I actually look at the labels and buy american goods when possible. It's just not that easy to do anymore.
The last time I did this was on a DVD player, and I just quit doing that. I paid $89, but it only lasted 10 months.
Wal-Mart sells cheap crap. It would be the equivalent of us shutting down every gourmet restaurant in this country, and then replacing it with $3 for all you can eat buffets. Yeah, you might get "more" food, and for cheaper, but it really hasn't improved your quality of life one bit. You are fat, and eating crap.
I encourage everybody to look at the price of things at a place like Wal-Mart, and picture that this price came after accounting for labor, materials, shipping, wholesaler mark up, wal-mart mark up, and Wal-Mart is still making a good profit on it. If you try to do the math on these products, you have to know that something is being short changed. Labor is not the only place where quality is being shortchanged. Materials, quality control are as well.
Wal-Mart hires a bunch of these people at wages that only make them able to buy at Wal-Mart, and on it goes. They can only do this for so long until we spiral out of control. The wealthy hire accountants to shelter their money. They put it overseas. The upper middle class now are starting to lose jobs to China and India. Who is going to pay taxes then to support all the people demanding benefits?
The best example I can think of would be steel and carbonfibre. If it's true that saving one job in the steel industry costs the US $800,000, then we're obviously better off not trying to do it; there's a 10-1 savings just handing former steel workers $80,000 a year. Exporting a sunrise industry like carbonfibre on the other hand guarantees that the only things we'll ever see made of it are golf clubs and tennis racquets whereas, if we protected such an industry, we could see an entire new unbelievable age of building in America in which skyscrapers could be put together in weeks rather than years, the layers being lifted one on top of the other and simply snapped together. Aluminum was more costly than gold when first developed; it would have stayed that way if we'd given the aluminum industry to the Chinese.
Somebody, preferably a republican, needs to step up and become the Andrew Carnegie of carbonfibre.
The jobs of entire groups of people who vote for republicans should certainly not be exported, and this certainly includes the computer and tech sectors. Adam Smith as I see it was basically a charlatan. This country was basically built around ideas which were polar opposites of the notion of any "invisible hand", most particularly the ideas of Friedrich List and the idea of the "American system of economics", and the American worker cannot compete on a dollar basis with people who live in thatch huts . This is crucial. The economy has to improve within the next year for Republicans to feel secure of winning, and jobs are the most major key. When a company like IBM sets out to export an entire category of technical jobs to India, they are basically trying to destroy the Republican party. They should be treated accordingly by a Republican administration.
Obvious also is that technologies necessary to our defense should be kept at home.
Regulate commerce? And this is supposed to be a pro-individual, anti government intervention site. Either we believe in free-market capitalism or we don't. Capitalism is sometimes cruel, but it is the best chance we have.
You do not go to a gunfight with a knife. This isn't free market capitalism. That is the point. Slave laborers aren't free. We are not free to ship consumer items to China without paying a tarriff, but we are able to ship manufacturing plants.
If you say that we should compete with nations on equal footing with us, who have the same trade policy as us, I say fine. As an american, I welcome the challenge. That isn't the reality when you compete with China.
American industries do not just sell to Americans, they sell internationally, If they are not allowed to build plants overseas, they would be out of business. There are certain economic realities that cannot be ignored. Trade protectionism simply doesn't work. Ask Japan.
An example. Two widget makers. One is dealing with a US tax rate, workers, safety, environmental issues, the like.
They can produce widgets for $3 each, and sell them for $4.50.
Their competitors, set up shop in China. They dump toxins into the river, contract for prison labor, have the doors chained shut, and though their workers are less productive, they can hire more, and still produce widgets for $2. You put a tarriff of 40% on those widgets. The cost to the manufacaturer now is $2.80. Still cheaper than it is to make the american product, but marginally so. American consumers now have a choice of taking small savings (which many will do), or paying marginally more for american made goods. The tarriff goes into the general treasury, and taxes are dropped accordingly.
As the tax rates drop, you drop the tarriff rates, as the costs in producing the item are reduced here in the US.
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