Covering all the bases to keep the registers ringing

July 25, 2013
By: Vicki Bell

A couple of weeks ago I wrote a post that centered on a Costco Connection poll asking if U.S. manufacturing jobs are still important to the economy. The magazine presented arguments supporting both the “yes” and “no” positions. I took issue with the latter, largely because I believe that domestic manufacturing and the jobs it creates are important, not only for the economy, but for the very survival of our nation. As I wrote, “The more we can do in our own county, the less we have to rely on others. A country that cannot produce what it needs in the way of goods and food is simply putting itself in a precarious position.” (And let’s add energy to these requisites.)

Noting that this debate was played out in a magazine affiliated with a big-box store, an entity oft cited as contributing to the decline of U.S. manufacturing and jobs, I then said that I would explore this contribution in my next blog post. Where to begin.

Sure, you can find countless articles blaming Walmart, the mother of all big-box stores, for destroying U.S. manufacturing jobs. Here’s one posted a year ago in slightly different versions on several different websites.

This version, written by Michael Snyder, features some strong language. Prefacing a list of “20 facts about Walmart that will absolutely shock you” is this paragraph: “Our economy is becoming completely and totally dominated by highly centralized monolithic predator corporations that ruthlessly crush all competition and that will stoop to just about anything in order to cut costs. In the future, will we all be working for gigantic communal entities that funnel all of the wealth and economic rewards to a very tiny elite? That sounds very much like how communist China works, and red-blooded Americans should want no part of that. America is supposed to be about free enterprise and competition and working together to build up this country, and Walmart is destroying all of that.”

An article in Time magazine—also written last year—said: “Many forces in the past generation have conspired against the American worker. But Walmart’s relentless drive for efficiency is at the very least a symbol of, and likely an accelerating factor in, the outsourcing of American jobs abroad and stagnating wages at home.”

The article also noted that “Walmart didn’t grow just by selling stuff for better prices than the next guy. It also grew by getting people to buy more stuff overall. Cheap prices and overwhelming selection have a powerful effect on a consumer behavior.”

And cheap means never having to repair, which fosters a culture of disposability combined with overconsumption. That pretty much describes the U.S. consuming climate, one heavily shaped by Walmart. And let’s not forget consumers’ role. Walmart could not have been successful with us.

So, yes, Walmart, its clones, and their accomplices (the buying public) have brought us to this precipice, a point at which we debate whether manufacturing jobs, long in danger of becoming extinct, are even important anymore.

Wonder of all wonders, the very entity that helped accelerate the decline now is attempting to bolster U.S. manufacturing. Yes, Walmart has seen the light.

The New York Times reported earlier this year that Walmart has joined the ranks of companies like Apple, General Electric, and Brooks Brothers, which are experimenting with making more products in the U.S. “The moves make good public relations, but they also take advantage of cheaper energy costs and transportation benefits in this country.”

Falling in line, Walmart announced that it would “increase sourcing of American-made products by $50 billion over the next 10 years. (The company) said it would buy more goods already produced in the United States, like games and paper, as well as help vendors in areas like furniture and textiles return production that had moved overseas.”

According to the article, the $50 billion commitment—$5 billion per year—represents about 1.5 percent of the roughly $335 billion the company spends each year buying and transporting merchandise globally. A mere drop in the bucket when you look at it that way.

After relating how the company already has awarded a textile manufacturer a long-term contract for towels made in the U.S., the article quoted Walmart U.S. Chief Executive William S. Simon, who said Walmart’s executives told him “especially in some of the towns where we manufacture that have been hit hard by the economic downturn, that these are Walmart customers and it makes perfect sense to try to support jobs here in the U.S. for people who end up shopping in their stores.”

Really?? In business since 1962, and you just now are realizing that your customers need jobs/ incomes to shop in your stores? Are you sure you want to pursue this? After all, the National Retail Federation recently sponsored “Imports Work Week” to celebrate the importance of imports in the U.S. According to study/report by the NRF, imports benefit American consumers and businesses alike.

Time magazine, the same publication that wrote last year’s article about Walmart’s effect on U.S. jobs and wages, covered this new campaign in its May 13 article Forget ‘Buy American’? “The report argues that because imports are so beneficial to so many groups in America, policymakers should avoid legislation that involves trade tariffs and any practices that “limit the benefits of imports to the U.S. economy.

“What about the widespread movement to support local businesses and “Buy American”? What about the idea that cheap imports kill American jobs?

“‘It’s just nonsense,’ says Laura Baughman, an economist, president of the consulting firm Trade Partnership Worldwide, and one of the study’s authors. She calls the ‘Made in the USA’ label ‘outdated’ and ‘completely misleading,’ and says that ‘most people are wrong’ in their perceptions about the impact of imports. ‘That’s the whole reason we did the study.’”

Keep "studying" and finding arguments to support your point-of-view-du-jour-based-on-your-profits, retailers. And while you’re at it, it doesn’t hurt to try and convince your customers that you have their best interests at heart, especially when it appears that they simply can no longer afford that overconsumption to which they have become accustomed, thanks, in a large part, to you.

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Vicki Bell

Vicki Bell

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8209