On July 26, 2012, Rachel Weeks, writes on MarketPlace.org that U.S. clothing makers may not beat China on price, but can on technological innovation.
For all our patriotism this Olympic year, the recent uniform dust-up seems to have done nothing to lift our collective amnesia about what globalization has done to the U.S. apparel industry.
Somewhere around 1980, other countries figured out they could make clothes more cheaply than America. Unfortunately, American manufacturers tried to outcompete their foreign rivals on price… and lost.
What we should have done all those years ago is acknowledge we couldn’t compete on price. Instead, we should have upped the ante with a focus on design and quality.
…”Made in America” has got to make long term economic sense. The good news is China’s cost advantage has been slipping because of rising fuel prices and higher wages among Chinese workers. We now have an unprecedented opportunity to get our business back. Quality and design will be key, but technology just might be the best trump card we’ve got. If we can figure out ways to bring technological innovation to the shop floor, we can boost manufacturing efficiencies.
We need our brightest entrepreneurs to roll up their sleeves, find what will make us stand out on the global stage, and sew it.
If the United States is ever to restore our once mighty economic power then we need to fully embrace the “machine age” and unleash the full productive power of the non-human factor of production embodied in our business corporations––intelligent machines, superautomation, robotics, digital computerized operations etc––the assets of which are broadly owned privately and individually by ALL American citizens.
One actionable policy should provide that any government contract or loan guarantee be only awarded to American companies who, through the government award, expand their ownership to their employees.
Still another short-term action, to reinvigorate “Make It In America” and “Made In America,” is the government should create financial incentives and tax provisions to reward American companies that bring manufacturing back to the United States from abroad, promote manufacturing investment, and incentivize more investment by foreign companies, all with the condition that the employees will share in the ownership benefits generated by the new capital formation projects. The result will be more broadened employee ownership and in-sourcing of jobs created by the new capital formation projects, and make America self-reliant.
The government should impose robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.
We need a policy change, which assures truly “Fair Trade” and that exponentially reduces the exodus of our manufacturing prowess and invigorates America’s entrepreneurial exceptionalism and competitive spirit to create products and services in the spirit of “the best that they can be.” We need policies that will de-incentivize American multinational corporations and others from undercutting “American Made,” while simultaneously competitively lowering the cost of production through expanded capital worker ownership. At present, the various incentives in place do not broaden capital ownership but instead further concentrate ownership.
http://www.marketplace.org/topics/business/commentary/no-surprise-team-usa-uniform-was-made-china
