Tuesday, February 17, 2009

Responsible Companies?

I don’t know what can be done to give companies the incentive to:
(1) Produce goods in the US rather than overseas;
(2) Produce quality goods rather than the shoddy stuff we’re getting.
I believe that in order for this country to recover from this economic depression and become economically viable again, we must increase our manufacturing base.

Companies move production overseas to reduce the cost of production, and avoid environmental laws. Our high cost of labor and associated benefits, our higher other costs (utilities, taxes), and the cost of compliance with environmental laws discourage companies from producing goods in the US, especially in states such as California and New York, whose labor and environmental laws discourage businesses from operating there.

Although the US is losing jobs because production is moving overseas, we’re supposed to benefit from less expensive goods. Of course you can’t afford to buy much of anything if you’re out of work or underemployed, so cheaper goods really don’t help.

Moreover, some of the products manufactured overseas are of inferior quality, and occasionally even dangerous. We’ve seen the problem with tainted Chinese-made products. Chinese-made hair dryers and other small appliances don’t last very long. Some of the clothes made overseas, even the brand names, are of inferior quality. So how is it less expensive when you have to replace items much sooner than you would otherwise have to if the quality were there? The consumer may be losing money, not saving.

I also ask the question: are the high-end products such as HDTVs and home theater systems really less expensive if manufactured overseas? I doubt it. I suspect if we made them in the US, the cost would be only modestly higher, if at all.

So who really benefits from all this? American workers lose jobs. Foreign workers are exploited. Foreign countries’ environments are being ruined by sloppy waste disposal and pollution. American consumers are forced to buy inferior goods. The US continues to have an unfavorable balance of trade, and is in debt to foreign countries. So who benefits? The multinational companies. Sure, we consumers can buy some products more cheaply, but the companies are reaping big profits (at least they used to when the economy was good). You pay big bucks for brand name clothing, and look where they are made! All that profit is going to the companies, and you’re stuck with inferior goods.

Unfortunately we often don’t have the choice of buying American – there just aren’t any American-made goods on the shelves. Very few items of clothing are made here. Very few small appliances are made here. Most TVs and electronics are made overseas. Fortunately we can buy American-made cars, yet 50% or more of a car has foreign-made components because the American automobile industry went to multinational sourcing decades ago to save money.

I’m hoping that the economic depression we’re in will remedy the situation to a certain extent. There may be pressure from Congress and the buying public to bring production back into the US to stimulate the economy. If enough people boycott foreign-made products (whenever possible), that might help. Maybe the government can provide tax incentives to create jobs in the US, and penalize companies for moving jobs overseas. Maybe we need to increase tariffs on imported goods, although there is a serious risk of retaliation by other countries.

I’m not sure how we as a country can bring manufacturing back to the US, but I would contact my Senators and representative and tell them to do something. We can’t continue like this if we want to survive as an economic power. We’re fast becoming a nation of shopkeepers, no longer an industrial power. Something must be done now!

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