My son is a train fanatic. Whether it is Thomas the Tank Engine, Chuggington, or the latest high-speed train from China my husband brought home for him after his business trip, it’s all trains, all the time in our house. So, whenever we go anywhere, my two-and-a-half year-old toddler packs up his trains in this little backpack. I was unpacking it the other day and just happened to notice the tag, which, to my astonishment, said “Made in the USA.”
It was late at night and I was tired, so chances were good perhaps I read that wrong. I read it again. Nope, it definitely says “Made in the USA.” Impossible! Particularly for a children’s item. So I quickly went online to the manufacturer’s Web site – littlepackrats.com – and read with admiration the story of their little backpacks. Here’s a snippet:
“Now more than ever we believe in the quality and integrity of American-made goods. …
Every bag from CBHstudio has been designed, cut, printed, stitched and inspected by American workers earning a fair wage.”
I then of course logged on to Facebook and urged all of my friends to buy these bags for their kids or for friends to support a business committed to making American-made products and giving people here at home jobs. I then interviewed the founder. I was stunned to find out that despite the fact that her bags were previously being sold world-wide and in high-end department stores that loved them – Nieman Marcus, Macy’s, Nordstrom, etc.. – as well as boutique shops, she couldn’t make a profit with the high shipping costs, and the fact that her competitors were able to pay foreign labor so much less than what she was paying American workers to do the same job. So she moved her operations in-house and now sells only online, directly to consumers – and is making more money.
I ordered two more bags for children’s gifts and this week received them (within four days, by the way), with a big “MADE IN THE USA” label and American flag on the box. I should have framed it.
I want that same commitment from our president. I don’t care if he – or she – is a Republican or a Democrat, give me the man or woman who won’t cave to the business interests yelling a contrary message but who will instead commit to giving American companies what they need to keep business here at home. I want our president to stand strong and provide these small businesses – and large – with ways to keep their product costs down, as well. After all, Americans are now used to paying less money for often lesser quality products made overseas.
Both President Obama and Mitt Romney are taking on China and that country’s pervasive piracy and counterfeiting activities, saying they are costing Americans jobs and much-needed dollars. They also are blasting China for its limits on imports of foreign goods and keeping its currency artificially low. It’s not secret China is a top offender when it comes to ripping off our intellectual property, as well, but it seems our leaders tend to do this tap-dance where that country is concerned – can’t make them too upset, can we?
But Americans are suffering for this lack of action: China’s entry into the World Trade Organization in 2001 cost the U.S. 2.7 million jobs between 2001 and 2011- over 2.1 million of which were in manufacturing, according to the Economic Policy Institute. Those lost manufacturing jobs accounted for more than half of all U.S. manufacturing jobs lost or displaced between 2001 and 2011. And, according to a forthcoming study by that group, “The State of Working America, 12th Edition,” income and wage inequality have risen sharply over the last 30 years as low- and middle-income families have suffered the most. Economic policies that hasten global integration of the U.S. economy without protecting our workers, eroded labor standards and failed to manage destructive international trade imbalances have also contributed to this. The U.S. has a trade deficit with China of $295.5 billion 2011 and of $67.1 billion the first three months of 2012 alone; some of that imbalance is blamed on the fact goods are made more cheaply in China.
To encourage manufacturers to keep jobs here in the U.S., Obama wants to – among other things – establish a minimum tax on foreign earnings. U.S. companies are currently not taxed on money they earn overseas and only pay taxes on those profits if and when they bring that money back home. So what incentive is there to bring the money stateside? Keeping money overseas makes it cheaper for those businesses to operate offshore. However, taxing foreign earnings may encourage larger manufacturers to shift their operations overseas altogether. Plus – hold on to your hats – under current law, costs incurred to outsource U.S. jobs are tax deductible! Obama wants to not only end this deduction, but create a new 20 percent income tax credit for expenses incurred to move jobs back home from overseas. He also has launched partnerships to train 2 million Americans with manufacturing skills.
And, although Romney would lower the corporate tax rate from 35 percent to 25 percent in an effort to enable manufacturing companies to reinvest more of their profits back into the company and hire more workers here in the U.S., most manufacturers are small businesses – such as CBHstudio, which makes those cute little backpacks and sells them at littlepackrats.com – that wouldn’t even benefit from that tax cut. But Romney also says he wants to use a heavy hand where China and other trade and currency violators are concerned; an artificially low currency makes it easier to export goods and undercut U.S. manufacturers’ prices.
There are also safety concerns that make the “Made in the USA” issue paramount for Americans, particularly children. Although many harmful chemicals use in various production processes may be banned here in the U.S., that doesn’t stop other countries from using them in manufacturing products they ship to us, which ultimately often end up in our kids’ mouths or on their bodies. If they are made in the U.S., we can at least ensure they are living up to certain minimum environmental and regulatory standards – we would hope, at least.
So I call on whoever wins the presidential election this year – as well as our elected leaders in Congress – to finally stand up for American businesses and buck the trend of giving in to corporate or foreign interests and, instead, come up with ways to incentivize or otherwise encourage more companies to use the “Made in the USA” labels on their products. We’ve got so many brilliant economic and business minds in this country – I’m sure they can put their heads together and come up with a way to keep what’s left of American manufacturing humming.
Guest contributor Liza Porteus Viana is a journalist with more than 12 years of experience covering politics. She also covers business, intellectual property and homeland security for a number of media outlets, and is editor of genConnect.com. Like many other moms, she is always trying to find that oh-so-elusive work-life balance as a full-time freelancer with a toddler at home in New Jersey. She previously worked at FOXNews.com as a national and political correspondent, and National Journal as a technology policy writer in Washington, D.C., and her work has appeared in publications such as Worth Magazine, Portfolio, PoliticsDaily, The Huffington Post and Forward Magazine. Liza tweets at @lizapviana and is on Facebook. She also blogs at lizapviana.com.