Category: Campaign

Businesses often utilize foreign manufacturing processes as a means of reducing the costs associated with building items. This comes as the cost associated with getting items manufactured declines when they are made in certain parts of the world. But the truth is that foreign manufacturing actually does more to hurt the wages of workers in the United States. This is a threat that could hurt the American economy when all is considered.

A great concern about foreign manufacturing is that the process helps to shrink the cost associated with making items. This should be appealing, but it also makes it to where the costs of products might decline over time. This is due to how companies typically sell items for cheap when they know they are less expensive to make.

But as this occurs, it becomes easier for local wages to be cut down. By keeping the potential profits associated with cheap items from being too large, it becomes harder for workers in the United States to receive enough money.

There is also the concern that a business might use the same pay structure for all employees. This is not to say that American workers will absolutely be paid the same as those in other countries. The Americans are simply being valued less because they are not treated as seriously as other people.

What is even worse is that foreign wages are certainly bound to increase over time. As the demand for workers in other countries increases, the potential for wages to rise in other places will grow. This all comes as another country will feel a little more valued in some way as there are concerns over how much money people are earning in those spaces. The fact that demands for higher pay will go up over time only makes it harder for people to get paid properly in the United States as budgets are strained in general.

It is vital to look at how foreign manufacturing could be a problem with regards to managing local wages. The potential for wages to decline in value is strong as more companies start to move their resources and functions to other parts of the world.

1. Applying VAT to Knock Down the Trade Deficit

The value-added tax is a tax used by over 130 countries. By waiving the VAT on exported goods and applying it on imported goods, imports would increase in price, helping goods manufactured in the US to be more cost competitive. VAT is usually 17% in the countries that impose it. Theoretically, this percentage would bring over $300 billion in revenue per year – that is 17% on $2 trillion worth of imports.

Of course, in order for VAT to work in the US, tax relief and tax reduction should be put in place on both the business and the consumer sides. Without the current system which involves double taxation on exported goods (when leaving the US and then again when entering the destination country), but with a VAT system instead, US exports will benefit from better pricing.

2. Investing More in Automation

Investing more in automation when many people are left out of a job due to manpower-reduction technologies may seem counterintuitive. Well, looking at the big picture, this tactic is not at all unreasonable. And while keeping our jobs in manufacturing will always be of great focus in the betterment of our economy, the future will definitely not present too many opportunities to those countries that don’t keep up with their investment in automation and other such manufacturing technologies.

Investment in factory automation and technology research is not pushed enough by policy makers in the US as it is in other developed countries. In the last five years, the US National Robotics Initiative has funded less than 15% of the applications registered by researchers. Encouraging both bigger investments in automation and tax breaks can do a big difference for the better in the future of US manufacturing.

3. Revitalizing Our Manufacturing Hubs

Little is left of the former industrial heartland of America, but the Rust Belt would be able to keep on giving through regional centers of expertise. Such a center is usually started by a regional development agency or a chamber of commerce. This group would be the middleman that brings together government agencies, businesses and schools in order to create a larger interconnected group of people and organizations that can direct its focus towards working as a unit, with the ultimate purpose being to attract new business and support innovation.

For example, even if manufacturing US consumer electronics is an industry that has been almost completely off-shored, the towns and cities that thrived on this type of manufacturing work in the past still possess the manufacturing know-how and manufacturing talent to lay the groundwork for innovation, attracting new business, and for building a more fair and competitive market. The potential exists, and it’s about time we start leveraging that potential.

1. Bringing Down the Trade Deficit

The long waiting game of sitting tight until US exports somehow gain more popularity is not the most proactive approach to pulling down our trade deficit. A pretty good idea for solving this issue is through certificates – exporter and importer certificates. This means that a US-based company that is in the business of exporting goods will bring in certificates equal to the value of its exports, while overseas companies that are in the business of importing goods in the US will have to buy certificates from the home-based exporters.

Through the means of this certificate system, the US would have the necessary budget derived from selling importer certificates to export goods at lower prices, becoming more competitive in the market, and gradually knocking down the trade deficit. What’s more, due to the extra costs involved with purchasing importer certificates, imported goods will become more expensive, creating again the possibility for US-made goods to become cost competitive.

2. More Awareness Regarding the Costs That Come With Offshoring

One way of bringing more awareness in what concerns the total costs implied in manufacturing overseas is by requiring companies that are making mass layoffs, and offshoring production, to explain their expenses. And some will argue that this can be enforced by formally modifying the federal Worker Adjustment and Retraining Notification Act. More specifically, the part stipulating employers having to provide a 60 calendar-day advance notification prior to a mass layoff.

If the desire for efficiency and greater monetary gain leads to mass layoffs and companies moving overseas, this exact loss of trained personnel and downgrade in terms of product quality and reliability will eventually lead to an offshore business that will lose money instead of bringing more. A couple of reasons why this tends to happen are costs related to the need to hold a larger inventory, costs related to transportation, costs related to the consequences of producing a more unreliable  product et cetera.

3. Getting Rid Of Redundant Regulations

It is estimated that companies spend approximately $140 billion every year on regulatory compliances. The reason for this is in the way federal agencies operate when it comes to imposing new rules, especially in the areas of workplace safety, environmental protection, and financial reporting. The phenomena here is that when new regulations are imposed, federal agencies are used to not checking other agencies for conflicting or similar rules. This way of doing things often brings on redundancies in regulations and duplicates in reforms that make it hard for companies to comply with federal mandates.

One of the best solutions here would be a specially designated panel in Congress that would be in charge of going through all the existing regulations, finding reforms and redundancies, and compiling a set of recommendations regarding their findings on which Congress would then vote, modifying the regulations that need modifying, and repealing those that need repealing.

The economic future of America can greatly benefit from the reintroduction of vocational training in schools. And while this idea may not blend particularly well with the college-oriented culture popularized in our country over the last six decades or so, it certainly begins to make more and more sense as statistics keep revealing the true consequences of the ability tracking system in schools.

Statistics show that 70% of high school students will not pursue a four-year college education. Out of the 30% of high school students who will go to college, about half will graduate. This means that approximately 15% of high school students will end up with a college degree in their hands. Statistics also show that over half of recent college graduates will be underemployed or unemployed. And all of this is happening while states are continuously cutting vocational programs in schools.

We’re also facing another trend in the manufacturing industry where graduate students are being employed in positions for which they wouldn’t normally need a college degree, having to learn new skills through training, apprenticeships, or even by attending additional vocational training. This whole process is one more cause for money leakage in the manufacturing sector, and it could be avoided if the new employee had already been trained for the job in school.

As time passes, the lack of vocational training in school produces a bigger and bigger skill shortage in manufacturing. And that same skill shortage is one of the reasons offshoring production has become such a usual course of action for plants and factories in the US.

At the same time, manufacturing in America is going through yet another shift, and this time things appear to be looking brighter. Modern manufacturing technologies are opening the door towards industry growth, growth that in its turn opens the door to more jobs, better payed jobs for the highly skilled. With the modernization and growth of the manufacturing sector, it is now the time maybe even more than before to create vocational programs, and introduce them in high schools and community colleges.

We need good and highly skilled craft workers to replace the generation of highly skilled craft workers that are now retiring. We also need highly skilled workers for the new and often times challenging positions that are opening up in the manufacturing field. In order for this to happen, we also need to change the mentality around working in the manufacturing sector, and this means changing the college-for-all culture. Different people have different sets of innate skills, not to mention the different ways in which we’re programmed to learn and function in an academic setting. Giving students with different inclinations and different skills the opportunity to choose different paths is a golden ticket to improving our economic future by populating the manufacturing sector with experts that are ready to work their hands and minds in our US-based factories, increasing both local production, industry wages, and our country’s economy.

Walk into the average store and pick up an item. Check said item to see where it was made and you will invariably see China, Taiwan, and a host of other countries as the source. A sense of national pride may make some consumers look for the American made equivalent, but a comparison of the price between the two items will show that it’s the foreign made piece that is the least expensive. Most of us work on a budget, so we decide to go with the cheaper item, only to find that it needs to be replaced sooner rather than later.

This is not a scenario that is prevalent in one type of store, as it is one that is common all across the country, whether you are looking for clothing, electronics, or anything else that the American consumer holds near and dear. Shelves in every single store in this country are home to cheap goods that are poorly made in some country that many of us are never heard of, yet we all snap up those items as though they are going out of style. Why do these terribly made items continue to land on our doorstep every single day?

The most obvious reason is that the average American consumer continues to fork over cash for items that they know are probably inferior. We live in an instant gratification world these days, and what is more gratifying than getting your hands on an item that you really want, and all at a price that seems too good to believe? The reason the thing you want is so cheap is because it is made in a place where labor laws don’t really exist. That electronic item that you hold so dear may have been pieced together by a group of 12-year old’s who know nothing about how a computer or smartphone works.

While we would all love to have the brand name item that we know is made well and will last a long time, the reality is that few of us will actually pay a little more for them. That doesn’t mean that we can’t try to keep up with the Joneses, though, which is why these poor-quality knock-off items continue to fly off the shelves. They are cheap for stores to buy in bulk, making it easy for sellers to bump up the price and make a killing off a terrible product.

Sure, it may seem as though we are being bilked by these stores, but we have all entered into a silent agreement where we will continue to buy poorly made foreign products for as long as businesses sell them at prices that fit our tight budgets. The labor laws in these overseas countries are not going to change anytime soon, and unless we all wake up and realize the consequences of buying cheap foreign junk, neither are our spending habits. We have become a society content with disposable items that can be easily and cheaply replaced, and until that changes, you can keep expecting to be underwhelmed with the products you purchase.

Globalization made it possible for countries to trade goods with fewer barriers by relaxing trade controls and providing subsidies. At face value, it’s beneficial to consumers because they are given more choices at lower price points. We see the tremendous benefits of this especially to people who live in metropolitan cities, which are very far from production centers. The choices brought about by long-distance systems are unparalleled, but such benefit comes with a price in the form of environmental harm.

The link between trade and environment is not obvious, but if you include processing and transport of goods to the equation, the connection becomes apparent. People are increasingly becoming dependent on goods and food items from distant sources. This massive traffic of goods and food items requires an enormous amount of fuel, which contribute immensely to greenhouse gas emissions.

Goods that come from foreign countries could take up as much as four times the energy compared to those sourced domestically. More energy means more carbon dioxide emitted by human activities, which in turn causes air pollution and contributes to climate change. Pollution affects the air, water, and soil of the affected areas, which causes environmental and health issues.

The over-reliance on the system poses a real threat to the environment and the negative effects are irreversible. However, our immediate and future actions can help save the environment profoundly. One of the best ways to address the issue is to buy American. This means sourcing ingredients from local farmers or buying goods from American manufacturers. Shortening the travel time of food from farm to plate makes for much more efficient use of fuel and other resources. It’s the same way with non-food items.

Buying local significantly lowers the transportation cost and it eliminates the need for middlemen, which unnecessarily jack up the costs. With fewer processes in the system, there is less fuel usage and less carbon emission. Sure, it can be argued that long distance goods trade is efficient, but the perceived efficiency brings far greater cost not only to the environment but also to the loss of good paying American manufacturing jobs. Buying American is not just some trendy hipster movement but a real sustainable solution to lowering carbon footprint, thereby saving the environment in the process.

In the mid to late 19^th century during the gold rush era towns would pop up out of nowhere.  Construction began, saloons opened, brothels were common, there was a need for doctors, dentists and merchants.  When there was “gold in them thar hills” communities thrived – until the gold ran out.  The local communities became “Ghost Towns” and most never recovered.

Fast forward to the 20^th Century.  Early in this century once again towns grew and flourished not based on discovering gold, but rather by growing industry and technology.  Implementing manufacturing facilities that would employ 100, 1000 and even more to produce those very products Americans created.  And for many years life was good.  But the world did not stand still and globalization became a reality.

As a result, economists began encouraging outsourcing those American products we created to other countries.  Small towns who had manufacturing plants that had been producing products for years were moved overseas and jobs became scarce.  We all are familiar with what happened in Detroit with the automobile industry.  But what about the small towns?

For instance, in 2004 Maytag shut down a refrigerator factory for decades was Galesburg’ largest employer moving the work to Mexico.  Ten years later residents are still struggling and the city’s population is declining.  Median household income fell over 25 per cent over thirteen years.

This is just one example of how the NAFTA trade agreement signed into law by President Bill Clinton negatively impacted our own citizens.  Even though one of the basic principles of economics is that trade is good and more trade is better, creating fair trade deals between countries should be an integral part of that principal.  The struggles of one small town illustrates whether that principal is currently in the best interest of the American people.  Hopefully, new trade agreements will help level the playing field.

The Bureau of Labor Statistics in the U.S. Department of Labor recently released a pleasant set of employment details, stating “Both the unemployment rate, at 4.3 percent, and the number of unemployed persons, at 7.0 million, changed little in July.” To help you visualize how many people are employed in America, consider that Michigan Stadium in Ann Arbor (the largest stadium in the United States) holds roughly 107,600 people, while our nation is home to 326,474,013 (Census Bureau, 2017). After factoring in that 4.3 percent unemployment rate, that means our nation’s employed persons could fill that stadium upwards of 3000 times!

With so many Americans employed and a seemingly balanced economy, you may be surprised to learn that the clear majority of these workers, including many of you, have been economically disadvantaged by corrupt politicians and their agendas! In order to put America first, we need to take care of our workers, which is why we are seeking to educate you on many of the ways their policies are currently impacting you!

Minimum Wage:

Our politicians have been involved in a myriad of controversies in recent months, which have detracted from their ability to successfully negotiate a rise in our minimum wage. This has left millions of Americans working jobs where the meager wages they do make are unable to support their most basic needs. Worse yet, those in office have sought to support “right to work” laws, which will ultimately weaken unions (the people who fight most for our wage increases!). Additionally, previous Executive Orders that protected federally contracted employees from losing wages such as the “Fair Pay and Safe Workplace” order, have been retracted. As a result, the American worker is actually worse off regarding support of a fair minimum wage than they were in the past.

American Jobs:

The current administration has promised an increase in jobs here in the United States but many of their policies seem to be implemented simply for aesthetics. Take, for example, the application of the “Buy America, Hire America” executive order. If one were to read it thoroughly, they would quickly find it to be more focused on reviewing current employment practices as opposed to implementing new ones. While this may set us up for a better understanding of how vast our task to improve the American labor market is, it does not help the current situation. This is especially true when one considers the fact that some research firms estimate that 41 of the top 100 federal contract recipients engage in hiring people from other countries. Obviously a very unsupportive move by our government.

The issues mentioned above are just the tip of the iceberg when it comes to detailing the pre-emptive strikes our very own government is waging against the working class. We need to arm ourselves with knowledge about each of these policies so we can more adequately fight back against these attacks. Go forth fellow Americans and fight for the right of fruitful employment.

It’s no secret that many foreign factories resort to unlawful and unethical practices in order to cut down on operating costs. And what better way to do this than to use cheap child labor? This form of cost-cutting measure translates into savings being passed on to prospective clients. This makes foreign factories more competitive in the world market. In a cutthroat business environment, even the slightest competitive advantage is desirable.

Prospective clients, US-based or otherwise, are either unware that such a thing exists or they just completely turn a blind eye to such unscrupulous practice. In any case, the hard truth is that children below the age of 18 are forced to do full-time work in factories without pay or with minimal wage. The worst part is that these children work long hours in less than human conditions. This is a form of abuse and it deprives children of their rights and harms their physical and mental development.

It is a known fact that child labor is prevalent in developing countries and least developed countries in Africa and Asia. It is estimated that over 160 million children are engaged in child labor worldwide. Of that number, more than 20 million children are employed in factories that manufacture garments, toys, and other consumer products. The number continues to climb as poverty index soars. Poverty and lack of employment opportunities force families to allow little kids to work in high-risk environments without safety measures put in place.

What’s alarming is that the trend is catching on even in economically important emerging countries like Brazil, Russia, India, and China. The economies in these countries are improving and growing at an unprecedented rate, which means there is more pressure to produce beyond their capacities. To meet demands without increasing costs substantially, foreign factories are making adjustments by using substandard raw materials and hiring cheap child labor.

Foreign factories are notoriously employing children as young as six years old just to meet demands. In China alone, it’s estimated that there are over 12 million children from the age of 10 to 14 who are employed as child laborers. This is clearly a violation of international human rights laws in general and child labor laws in particular.

Child labor in China is a huge problem for its trading partners, including the US, because no consumer would want to use products tainted with child labor and human rights violation. What’s even more sickening is that foreign factories are getting away with it simply because child labor laws are poorly implemented, if enforced at all.

Child labor is a multi-pronged problem that leads to child trafficking and exploitation. Eradicating it will be a slow and gruelling process especially if the violations are being tolerated by trading partners and consumers. The key is to understand the risks that such an abhorrent practice poses to children. As consumers, the responsible thing to do is know the supply chain process of companies to ensure that we are not supporting those companies that directly or indirectly violate child labor laws.

Ask the average person on the street about the state of the manufacturing industry and you will be sure to hear a lot of people talking about how countries are fleeing the United States in droves. These same folks will also tell you that the reason they are doing so is to take advantage of ridiculously cheap labor in other parts of the world. It seems like a logical line of thinking, especially since we hear this particular reason being thrown around on a very regular basis. What may come as a surprise to many people is that the “cheaper overseas” argument is in fact a myth.

Yes, companies are moving overseas, but if they are not doing it to take advantage of employees who work for mere pennies on the dollar, then why are they going? There are a few reasons why companies make the move, and none of them have to do with cheap wages and tax breaks. Let’s not forget that there are also large corporations opening manufacturing plants and headquarters in the US, which does not make any sense if the only reason that companies move is because they want to save a buck or two on their payroll costs.

The most obvious reason that a company decides to move to another part of the world is so that they can break into a new market. If business is consistently good at home, but not so great overseas, one excellent way to make a positive change in a new market is to create job opportunities there. It’s an excellent way to build a brand, and is something that automakers frequently do. Places like India and China are huge markets that remain relatively untapped for a lot of automakers, so opening a production plant in those places can help them break into the marketplace. It works in reverse, too, as Korean company Kia opened a huge manufacturing plant in Georgia a few years back, as they tried to build their brand in the states.

Another reason to move is to have access to materials that are cheaper elsewhere than they are here. Many of the companies that make the move overseas make equipment on an assembly line that is now almost totally automated. The parts and components used to create things like computers and other electronics are cheaper abroad than they are here, as that is where they are usually produced. With automated assembly, the argument for cheap labor goes out the window.

Innovation is also key in the movement of companies to new overseas locations. The simple fact of the matter is that the brains behind new technologies may actually be located elsewhere, with the Japanese in particular leading the way in that department. Companies that operate in certain industries will go to the heart of the innovation as opposed to trying to lure the brains behind it here. We are not suggesting that finances do not play a role in a company moving to a new location, but the reality is that lower wages are way down the totem pole when looking at the reasons to make that move.