“Made in America” Won’t Come Easily
A Walmart official recently stated that 57% of its sales were Made in America. That surprised me. I thought nearly everything in Walmart was made in China. But consider this: A few higher priced USA-made products exceed the value of many lower priced Chinese products. For example, one USA-made Snapper lawn tractor at $2,000 in sales dollars equals 200 China-made shirts at $10 each. China dominates in lower priced, mass produced, time-insensitive products. Not surprisingly, China’s labor force consists mainly of unskilled workers.
This was Mexico’s ticket 20 years ago where I visited a computer board factory in Guadalajara. Compared to a similar factory in Texas there were far more workers and less manufacturing equipment. I watched as one worker grabbed completed boards from one conveyor and placed them on another 3 feet below. Then he went on break. Finished boards began piling up and falling 3 feet to the conveyor below. Plant management said it was cheaper to buy labor (and repair boards) than purchase additional conveyors. At that time In Mexico, no one was particularly concerned about the skill level of the average worker.
Unlike China and Mexico, USA manufacturing is quality-focused, quick to market, and creative. The “reshoring” of manufacturing comes with the promise of higher paying, good jobs. These jobs require skills, however, and there are not enough qualified people to fill those jobs now and in the foreseeable future. These jobs pay better, in fact, than your average non-technical college graduate can expect.
Before Walmart can reach its lofty goal of 70% sales of Made in America products by 2025 our factories will need even more skilled workers to handle the increase in production. Where will they come from? Achieving “Made in America” won’t come easily.