Myth of the Made In USA Label

I have had about enough of the “Made in USA” propaganda. Be a patriot. Create jobs for Americans. Keep money in America. Manufacture in the U. S. of A. Here’s a burst to your bubble: “Made in USA” may not benefit the Joe Shmoe American as much as folks would like to think.

A fashion designer I know, a white woman with a popular ready-to-wear label, is quick and proud to declare that her entire line is made in the USA, because she is a true patriot, and she supports America. The woman is settled quite far over on the political right, is in strong favor of strict anti-immigration laws, and for the most part when she thinks of “American,” thinks of someone who looks like herself: white.

She gets her line manufactured at a U.S. garment factory I happen to know a lot about. The factory company is owned and managed by Chinese immigrants. Considering the rampant Sinophobia in America, that would probably be considered point one for China, zero for America already.

What’s more, these Chinese immigrants evade paying their taxes to the US government like it’s their passion. Having been sued before and their personal assets seized, said Chinese immigrants know better now and tuck away all their money overseas… in China. Not here in U.S. banks. For every $100,000 worth of assets they keep here in America, they have $900,000 in China. China banks earn; U.S. banks lose. Score? Point two, China; still zero, America.

This “Made in America” factory hires mainly Chinese and Mexican employees. Rampant labor code and employment law violations abound. And the Chinese immigrant owners of this factory get away with it because they know that most of these Chinese and Mexican employees are illegals and won’t pipe a peep to EDD. They’re not hiring the “Americans” that my white fashion designer gal-pal is thinking about. In fact, they’re hiring exactly the type of “Americans” she wants to kick out of this country.

In addition to hiring illegals, there’s underpaying below minimum wage, sometimes withholding of pay altogether, doctoring of time cards, forcing employees to work well over 40 hours a week without breaks or overtime pay, threats of physical violence, refusal to hire unionized workers, oh I could go on and on and not even hit the tip of that iceberg. And when the Chinese and Mexican employees do get their meager, pathetic payroll, they send more than half of it back to their homeland to family. These folks are frugal as hell and don’t spend/invest a la Bush economic theory into U.S. services and goods (“Be American! Shop!”), so once again, no benefit to the U.S. economy.

The factory charges an arm and a leg for its production work (because that’s what people like that white female fashion designer are willing to pay for “Made in USA,” Economics 101 here folks). As a result, that fashion designer’s profit margins are low, she can’t hire as many American employees as she would like, and it becomes hard for her to stay out of the red as a business, and frankly, she’s on the verge of bankruptcy. Unless she can dynamically re-strategize her operations, this recession we’re currently in will force her to close.

Oh, and to add insult to injury, these Chinese immigrant factory owners know they can make even more money by secretly selling the fashion designer’s patterns overseas to China, where her patterns will be used to make knock-offs that will infringe on the designer’s U.S. registered trademark. Okay, I’ve lost track of the score. It’s now something like gazillion points, China; zero, America.

On the other hand, let’s consider the “Made in China” label by a U.S. company. An American fashion designer that manufactures her apparel in China only streams its cost of goods to the benefit of China, which is a fraction of the cost of goods for the fashion designer obsessed with her “Made in USA” label (that we’ve already shown to be disingenuous). So all right, one point for cost of goods, China.

But since this second fashion designer’s profit margins are much higher, she reinvests that into the American economy directly through hire of professional talent here in America, be that marketing, PR, associate designers, etc. Her cost of goods are lower, she can sell her same-quality products at lower retail, makes more sales, and as a result of her boom, can actually be in a position to generate jobs for American workers. Now, finally, America is earning some points and China only has its one point for cost of goods.

Also at this level, this second fashion designer is probably not hiring the illegals like the Chinese-immigrant-factory and she’s far more reverent of U.S. tax, labor, and employment laws. In fact, to be cool, she’s probably all green and fair trade and shit, which we Americans love. This second designer’s employees tend to be legal Americans with stronger roots and ties to America, so they’re channeling their disposable incomes into American services and products, not sending it back to some motherland beyond, and their monies tend to stay in U.S. banks.

“Made in USA” labels might not be all that it’s coughed up to be. And “Made in China” isn’t anti-patriotic or taking jobs away from Americans, at least not in the sense of “Americans” that white female designer envisions. This myth of the “Made in USA” label has become infuriatingly overrated.

But do keep this rant within scope. The point here is to convey that the issue is far more nuanced than “Made in USA” versus “Made in China” labels. “Made in USA” does not per se mean creation of jobs in America and support of the American economy; likewise, “Made in China” isn’t necessarily anti-patriotic, anti-American. So to those of you who proudly but stupidly exclaim, “I only buy goods made in America because I am a patriot and I support the American economy,” well buddy, sucks to be so ignorant.

(Inspired by this article here by way of this post here.)