Made in America: Where Products in Our Homeland are Created

ELLEN LI
News Editor

Made in America. Three simple words, yet so hard to find. In 1960, foreign goods made up eight percent of American spending.
Today, that number has inflated to sixty percent, as stated by ABC News.

In order for a product to be labeled “Made in America,” “all or virtually all” of the product and its component parts must be produced in the United States or one of its territories or protectorates, according to the Federal Trade Commission (FTC).

Published by Moody’s Analytics, the U.S. is still a global leader in producing medical equipment, airplanes, movies, pharmaceuticals and agricultural products, most of which are not purchased by American consumers. Some U.S. companies have shifted toward this type of high-end manufacturing, which include aircrafts, missiles, farming equipment and circuits. Meanwhile, the production of many low-value goods have been outsourced to foreign countries. Thus, shoppers can enjoy lower prices while companies enjoy higher profits.

However, when demand slumps during a recession, many manufacturing jobs are lost. Products are being made where expenses are low, and manufacturers are focusing on the most lucrative, high-end products, all of which require only skilled workers, meaning less jobs for Americans.

The lure of cheaper labor in China, India and other foreign
countries has grown significantly. Since 2001, America has lost more than 2.5 million manufacturing jobs and 850,000 white-collar jobs to competitors overseas. In doing so, companies have cut costs by paying foreign employees substantially lower wages.

“Companies export [low-end manufacturing jobs] overseas because there is a lack of regulation in foreign countries and companies are able to exploit the cheap labor there,” American Government and Economics teacher Johnnie Lau said. “In some sense, you can’t fault companies for doing so.”

Besides outsourcing jobs to foreign countries, the U.S. job market is also suffering from an increasing trade deficit, meaning that more goods are being imported than exported. The overall U.S. trade deficit in 2010 was $497.8 billion as the economy struggled to recover from financial crisis.

This was the largest annual percentage rise since 2000. Of
that $497.8 billion, $252 billion was from China, slightly lower than the $268 billion record set in 2008. This difference between the amount of goods that America imports from China and the amount that the U.S. exports to China is disproportional.

“Only one percent of our corporations export abroad, and less than half of those corporation export to more than one country,” Bruce Katz, director of metropolitan policy at Brookings Institute, said to ABC news. “We need to understand that if we look externally for markets, there is enormous potential for the export of goods and services from the United States, and for the growth of jobs, good jobs, quality jobs in the near term.”