You may have noticed that more of your favorite shops are stocking products that are labeled “Made in the USA,” or that a brand you love has recently moved production to the US. Despite what you might be hearing on the news, U.S. factories are producing three to five times more output than in the early 1950s to mid-1960s, when America was the globe's manufacturing powerhouse. That’s right, Made in America is back!
Everything from planes to cars to toys are increasingly being made in America, both by US-based companies and foreign ones. The largest BMW plant in the world is now in South Carolina, and the plant exports most of the cars it builds there. It’s quite the reversal from 40 years ago.
Between the 1960s and now, many companies went overseas in pursuit of cheap labor. U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million. Manufacturing jobs took the hardest blow, as factories of all types were closed in the US, and reopened in Mexico, Taiwan, and more.
Now, the movement has shifted. In the last few years, Chinese wages have risen by 15 to 20 percent a year. Even workers in India also are demanding and getting bigger pay checks. These rising labor costs, coupled with rising fuel prices raising shipping costs, are invalidating the argument for sending jobs overseas. In many cases, American consumers don’t have to pay double for a US-made product. The price difference between American and foreign goods is now closer to just 20 percent more. Outsourcing manufacturing overseas just doesn’t make sense anymore.
Through this global shift, businesses are realizing the benefits to manufacturing their products here in America. Companies easily oversee each and every product that comes out of their factory, including training their employees and ensuring they’ve created a safe work environment. It allows business-owners to be more hands-on, and avoid fiascos such as discovering boxes of product that were poorly produced or not up to their standards. Working with factories in America means businesses can be more ethical and make a higher-quality product.
Bringing production to a local factory also cuts lag time between design and manufacturing. When a business has to communicate with a factory in China, and wait for new product to ship back and forth, it can be impossible to react to short-term market shifts. Instead of needing to predict holiday gifts six months or more ahead of time, local factories can make more products and have them on shelves in a matter of days.
To make up for wages that can still be lower in foreign countries that the US, business owners are investing more highly in state-of-the-art facilities. When American factories are more efficient and more products can be made per hour, higher wages become a moot point. This is a smarter choice for the longevity as company, because the machinery can always be adjusted to make new products.
And American citizens agree that “Made in the USA” is better. A 2013 Gallup poll found that 64 percent of Americans said they would pay more for a U.S.-made item, than a similar product made in another country. This new mindset paired with the increasing amount of products made in the US is causing a boom for local businesses.
Products that are made in America are more trustworthy, and known to be made with the highest quality materials. Some consumers might fear that a product from China will break quickly. But the “Made in USA” stamp instills confidence that the product is durable, well-made, and uses the best materials. Even consumers in China are requesting Made in USA products, exhibiting a global trust in American goods.
In addition to the construction of the product, workers are better trained, and the product was likely inspected to a higher standard when it is made domestically. Consumers can rest assured their American-made product is free of toxic chemicals, engineered for safety, and built to last. This is especially important for goods that are meant to be used by children and pets.
USA-made products are also sustainable. To start, they don’t require millions of gallons of gas just to be transported from the overseas factory to the store. When it’s made locally, the carbon footprint immediately decreases. Products made in the US also use sustainable materials that are not harmful to the planet. Perhaps they take advantage of sustainable wood, or recycle their plastics. American companies are held to a higher standard of environmentalism, and likely have better access to the appropriate resources to make eco-friendly products.
The US government agrees that bringing more factories back to our shores is a good thing. Section 199 is a tax break for businesses to encourage and reward domestic manufacturing. Deductions for expenses incurred for producing a product in the US can be up to 9%, proving the US is putting their money where their mouth is.
As consumers continue to demand more American-made products, businesses will continue to move home. Not only do they help stimulate the US economy by building more jobs, they increase the reputation of America as a manufacturing powerhouse by producing goods of the highest quality. Based on the amount of movement that has happened just in the last 5 years, it’s easy to predict that other major companies will continue to come to the US. New businesses will open their first factories locally, or choose to renovate abandoned manufacturing buildings. For those who require durable, long-lasting, and quality products, “Made in the USA” will always be the way to go.