You think Wal-Mart would go for this?

September 8, 2008

My fraternity brother Greg lives in Michigan, and like a LOT of people there he works indirectly for the auto industry. The economy in that state is really sucking hard, so the “buy American” slogan has just a bit more significance.

Greg’s always got some great new idea or invention, but when we were drunk-talking at a wedding this summer and he told me about his new brilliant idea. I thought it was great and I asked him to write it up, so here it is:

Manufacturing is the heart of our economy

I understand that the great manufacturing era of the twentieth century was the essence for America’s global standard of living dominance. Manufacturing is the backbone of our economy. Manufacturing provides jobs to millions of Americans. Manufacturing can provide exports and reenergize the dollar. Jobs becoming more and more available to Americans are service-based. Americans that are employed in the service industries are stuck in a dwindling economy. The U.S. economy is like a bucket of water. Service-based industries are like a sponge. When you wring out the sponge, over time, there is less and less water. The way to keep the bucket full is to stop wringing capital spending for durable goods outside the bucket.

We have had a trade deficit for the last 50 years because of one truth:

Workers in countries with lower standards of living are willing to work for lower wages. I, certainly, can not compete with someone getting $20.00 a day (if that) and being forced to pay rent to live in the factory.

(click here to read the NPR story Is Wal-Mart Good for America?)

Bottom line, China has shown that they have a greatly reduced standard of living; hence they have a surplus of manpower to produce anything cheaper. It’s an equilibrium between the entire planet’s standard of living, and ours. I would guess that if we have 5% of the population and 95% of the wealth, we are far from equilibrium. I would guess our standard of living would certainly have to go down to bring it up globally. It is certainly our right, duty, and privilege to buy products made in the U.S.A. Retailers want the consumer to buy products. That means lower prices. Prices that any family can afford. Prices that can drive the competition away. Sort of Darwinian Economics. Survival of the fittest and all that. That’s acceptable if we are losing the business to another country that shares our standard of living (i.e. Canada, Japan, Germany, etc.), but it’s hard to be globally competitive with someone that has the edge of a much cheaper and infinitely larger workforce.

Availability of consumer information

I was driving past a large retailer the other day and I saw a car driving into their parking lot with a bumper sticker with a ‘Buy American’ slogan. Obviously, he did not know that the store he was going to gets 90% of their goods from China. He doesn’t know this because he doesn’t always look at the label close enough to see what the country of origin is. It is always small and somewhat hidden. If you looked at every label during a routine trip to the store, you would spend double the time looking for country of origin than any other data. In order to keep the shelves stocked, just in time ordering with pull systems are utilized to project orders of goods based upon market trends and statistical data. It takes only a nanosecond for the store to know what’s being purchased and where it’s from based on the UPC barcode on everything. In today’s logistics environment, all of that data is known in order to best lower the supply chain cost, and ultimately, increase profitability.

What do we do to protect our standard of living?

I agree we should buy American. I believe most Americans feel this way. How do we get that person driving into that discount retailer understand the damage that he is doing to the country by not buying American? Maybe he doesn’t care. Wouldn’t it be nice if we could show him his impact prior to him entering the store? It would be like a health warning on a pack of cigarettes or a can of paint. Protecting America’s goods with trade embargos and tariffs are certainly not the answer. Tariffs drive up everyone’s price. All goods become more expensive.

We need a Consumer Protection Act that would make all retailers over 10000 square feet of retail space have to label by percentage where their products are made. This label would need to be large enough and high enough to be seen. This label needs to be posed on the front door right where you walk into the store. A crude rendering of the label would look like this:

Americans are Americans

Americans want to buy American but that thought is not brought to forefront. Why? Because retailers want to compete solely on price because, for many, price isn’t the bottom line, it’s the ONLY line. But, if you, as a consumer, had the choice to see from a high level overview, how much is made in the U.S.A. before you got into the store, you might be more likely to shop in a similar store that carries more domestic goods. I’m not at all saying that we should boycott or tariff foreign goods. I simply want the American public knowing what is known when the goods are ordered from a global marketplace where the American worker is one of the most expensive. I believe that this will cause retailers to purchase more American products. And we, as consumers, can help ourselves and our children.

Greg Harned

Is it a truly original idea? I don’t know- but what a simple idea. It would work for me, but then again, I haven’t stepped foot into a Wal-Mart in years. Will something like this be enough to influence other less-conscientious shoppers? I’m still guilty of frequenting Home Depot instead of my neighborhood hardware store. I also shop at a CVS drug store and Target. All of them are probably almost as guilty as Wal-Mart.

Greg by no means is singling out Wal-Mart, but they are leading the pack. WalMartWatch has some very interesting stats about Wal-Mart’s supply chain, one of which is that Wal-Mart alone is China’s SIXTH largest export market.

I won’t even get into their abysmal record on the environment, health care, labor relations or impact on communities.

We could shop at buyamericanmart.com, but if I want a pair of jeans, I have exactly two choices- the original ranchhand dungaree or the classic ranch fit ranchhand dungaree. Hmm. Tough choice- they’re both so casual. AND stylish!

So what’s the next step, Greg?


One comment

  1. More laws to regulate peoples buying habits? No! Please no! People will buy what they want if thet’re rich and what they can afford if they are not. Here we go with the relativism again – I don’t buy my Chinese goods from Wal*Mart – I just buy them from somewhere else. So in the end what is the point? As far as manufacturing FORGET ABOUT IT! Read Toffler’s Third Wave and find some other means of supporting yourself – or just wait for the axe and then for your welfare check…

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