Companies say they are being patriotic and responsible by bringing jobs and manufacturing back to the US. Is it true? And how come you can't buy clothes that fit anymore?
At Netroots Nation the panel What We Can Do to Expose “Red, White and Blue-Washing” took a look at what is real and what is hype as companies try to make it look like they are manufacturing and hiring in the US.
On the panel were Tracey Sefl (moderating), Scott Paul of the Alliance for American Manufacturing, Rep. Bruce Braley (D-IA), Laura Clawson of Daily Kos and Marcy Wheeler of emptywheel.net, and the Guardian.
Scott Paul defined the question for the panel: Corporate marketing makes it sound like companies are doing something that helps the country. But how do we know if they are really doing that?
What Is Real?
The iPhone box says “designed in California,” but really the iPhone is made in China under conditions the world now knows about. WalMart pledges to bring jobs back to US and stock shelves with US-made products. But ... (picture of all the US-made products at WalMart, on one table.)
So what is real? And how do we get these companies to translate what they say into good jobs here?
"We've Seen This Dance Before"
Rep. Braley then talked about Maytag, a company that has had a profound impact on Iowa.
Newton Iowa was the washing machine center of the world for a century, great jobs, quality. Dependable. (“The lonely repairman” ads.) At its peak there were 4000 mostly-union employees making $20 an hour plus benefits.
You caould get a high-school degree, get a good job, live a middle class life.
The rest of the story. But then:
Whirlpool bought Maytag in 2006 and moved manufacturing to China, got rid of the well-paying union jobs in Iowa, decimated a community.
Workers who had given so much to this company, now had nothing.
This was happening across the country. Meanwhile Wal-Mart was sourcing more and more out of China.
But now these companies are saying they are starting to insource the jobs that they drove overseas. Voters and citizens need to be skeptical because we have seen this dance before.
Maytag says they are bringing jobs back, but they bring back very few and they are very low pay.
(Rep Braley took questions now because he had to leave.)
Q) what policy to bring back?
A) Give voters the real story behind where tax dollars go, we need Buy American policies for our tax dollars.
They need to know gross jobs created vs net jobs gains, also the govt should report income levels of new jobs vs old jobs.
When politicians talk about creating jobs, ask where they were when jobs were going overseas.
If a politician is opposed to free trade agreements that don’t promote free trade, how do you explain the actual long term benefits and costs, loss of jobs and consumer choices? It is not two-word reasonable-seeming soundbites, takes a long time to explain.
We have to hHold foreign manufacturers accountable in this country the same way we hold US manufacturers accountable. This is is opposed by Chamber of commerce.
"This is all about cutting the wages of the American people."
Pic of GM Sonic on the screen: NY Times article about an assembly plant in Lake Orion Township, MI, GM is building this car in the US. But really, GM brought in new hires at half the wage, is doing pre-assembly by non-union contractors. This is all about cutting the wages of the American people.
Then GM announces the Spark, which is built in interior of China so they are using slave wages. Now they also build it in Korea, only 10% of this car is made in the US.
Last month GM announced the new electric Spark, entry-level, made in Korea, using a China company battery, with a $199 a month lease. So they are undercutting their own Sonic
US recovery funds paid for much of this new battery technology. Korea had cornered battery market because of cell phones, etc., and we used recovery money to start building that technology in US, the point being for cars when we transition to electriv.
So with Spark we are sending that back to Korea. We lose a lot of the investment our own government made. And battery-maker A123, funded by US recovery funds, was bought by China.
The Ford Fiesta is 20% US, mostly made in Mexico, the Japanese do more US sourcing than Ford.
Asia car parts supply chain subsidies from governments brings down the cost of building a car there.
"The same style of jeans is not the same style of jeans."
You go to a clothing store, the sourcing is constantly moving around. She always wore Lucky brand jeans, they were made in US. But she bought a new pair recently, made in China, they fell apart in 3 months. Now Lucky is cutting corners.
Then Lucky jeans made in Mexico, but were those subcontracted to China?
She pulled two pairs different sizes, but the bigger size was way too big, the smaller size way too small. Same jeans, except they were not.
It is so confusing to be a consumer and try to make responsible decisions to whatever small extent the retail world will allow us.
Every 3rd pair in a pile could be made somewhere else, from different materials, with different sizes.
But it doesn't do any good just to stop buying the brand. Unless you tell them why you are moving money elsewhere you are not doing anything. Rell a salesperson, tell the manager, write to the brand.
To be a good consumer, you have to tell them why you are switching.
This is a problem of this global economy, the same style of jeans is not the same style of jeans.
"Recirculating OUR tax dollars in OUR economy has profound benefits for OUR economy."
The Department of Defense is required by law to buy American, except womens underwear and athletic footwear. But New Balance is made in US. Jockey made in US.
Recirculating OUR tax dollars in OUR economy has profound benefits for OUR economy. But it is a scavenger hunt to try to find American products.
We have a policy of supporting imports.
Buy America is an important policy issue. It is about the middle class. A foundation of the middle class in US was manufacturing. It provided great paying jobs. It was one of the only paths to the middle class for Americans who didn’t have a college degree.
The jobs coming back don’t pay good wages, because of the destruction of unions. But many heavily-unionized companies here are profitable, even competing with heavily subsidized competition outside the US>
Obama made a 1 million manufacturing jobs pledge during his campaign, it helped him beat Romney. In the campaign the issues were jobs, trade, trade with China etc, but the main ads were about JOBS. 8-10 times as many ads were about jobs than about anything else.
Yet, no jobs
The WalMart effect: 10% of all imports from China are just for WalMart. They are a market-driver. Walmart’s promise to start buying US is actually a fraction of their purchases. And those bought here are from people paid very low wages.
This is the definition of red-white-and-bloe-washing.
Walmart made in America stuff all fits on one little table, one shelf of their giant stores.
The repeal of Glass-Steagal and opening trade with China are what did it to American manufacturing. Then Wall street, investment banking, changed the balance of power. It became about quarterly earnings and cost cutting.
Manufacturing needs patient capital, it is not about the next quarter return. Smaller manufacturers still cannot get capital for expansion, but China will buid a factory for you, give you tax abatement.
So Wall Street has driven the cost cutting, for their quarterly earnings reports. They have forced manufacturing out.
Financial services companies want to wipe out the good things in tax policy that American companies get: domestic manufacturing incentives, etc., and then put in a lower overall corporate tax rate.
It is a critical consumer element to recognizing r-w-b-washing, and you speak up tell them to stop it, and do the right thing.
Follow me and CAF on Twitter: