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Buy American?
Old 08-05-2011, 02:04 PM   #1
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Buy American?

I'm not going to count on Washington to fix our nation's financial problems. But, what can I do?

"Buy American" comes to mind immediately. Honestly, I never look at where a product originates before I buy it. Should I start?

And, more important, does it make a difference? We can afford to pay a little more if it would help. Preferable to higher taxes............
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Old 08-05-2011, 02:30 PM   #2
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I've always been confused by the term "Buy American". What does that actually mean?

For instance, you can buy a certain brand car, but the parts are globally sourced (most times, depending on price). It may be final assembled here (American workers get paid), but the profit on the car goes to the offshore owners (think Japan/Korea/etc.)

From an investment view, we (at least DW/me) invest globally and do get a few pennies from across the globe. But really, even if the final assembly is done in the U.S. (per the vehicle assembly comment), where is the majority of work actually done? In some cases, the expensive sub-assemblies (e.g. engine/transmission) is actually done off-shore, with globally sourced parts and foreign labor.

That's why when news organizations (such as ABC News) has a series on the "buy American" mantra, I really wonder if they are going beyond the "feel good factor" in their news, rather than tell the entire story about a product, going from design to final inspection and the "American" part is only a small part of the story. OTOH, maybe a small part is better than none at all.

Just my rambling thoughts this lazy summer afternoon...
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Old 08-05-2011, 04:09 PM   #3
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Quote:
Originally Posted by winger View Post
I'm not going to count on Washington to fix our nation's financial problems. But, what can I do?

"Buy American" comes to mind immediately. Honestly, I never look at where a product originates before I buy it. Should I start?

And, more important, does it make a difference? We can afford to pay a little more if it would help. Preferable to higher taxes............
American goods cost (considerably) more in most cases where there are foreign goods competing. So much so that you can't even buy American any more on some products, televisions and almost all consumer electronics for example, wasn't always the case.

It comes down to how much you are willing to reduce you standard of living to "buy American."

We'd all rather buy American, but the better value (lower price, same quality) are too compelling when it's time to pony up our own hard earned $$$.
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Old 08-05-2011, 04:26 PM   #4
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It is tough to do but I try very hard to buy 'USA Made' goods. If I can buy local (Colorado) stuff, that is even better. That said, I shop at sites where goods are ported from emerging nations - like a necklace from women in Africa.
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Old 08-05-2011, 05:15 PM   #5
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Earlier in the week I decided to get some basic mundane things needed in the kitchen. After researching a bit and reading reviews online I ventured out to Walmart. I rarely shop there as it is not very close to me, but it was a nice day for a drive so off I went. I bought 2 Rubbermaid ice cube trays and a set of burner drip pans for the stove. Neither was particularly expensive with the ice cube trays at $1.93 (much more $$ on Amazon) each and the burner bowls at $8.97 for a set of 5 (not sure what I'm supposed to do with the 5th one though). After returning home and opening the packages I realized both were labeled "made in the USA". I would prefer to buy items that are made in the USA when available and if the cost difference is not prohibitive. Anyway I really like the ice cube trays as the cubes pop out very easily and the burner bowls well they are there and look so much better than the old ones did.
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Old 08-05-2011, 05:38 PM   #6
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In ancient times, long ago, and far far away when I was young - my dear old Dad: Don't you dare buy anything or bring it home unless it's Union Made. In the USA of course.

In the 60's some friends left a Dog and a used VW on their way overseas for a contracting job.

When they came back - my Dad was glad to get rid of the VW but we kept the dog - a Beagle.

heh heh heh - how times have changed.
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Old 08-05-2011, 06:41 PM   #7
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American goods cost (considerably) more in most cases where there are foreign goods competing. So much so that you can't even buy American any more on some products, televisions and almost all consumer electronics for example, wasn't always the case.

It comes down to how much you are willing to reduce you standard of living to "buy American."

We'd all rather buy American, but the better value (lower price, same quality) are too compelling when it's time to pony up our own hard earned $$$.
I wonder about this. Really, how much labor is in most products? Some typical consumer products that I worked on, where I saw the P&L statements, (USA) labor was only ~ 15% of the total cost, IIRC. So how much can be reduced, and how much is added with shipping, finished goods inventory etc. I'm not sure we'd really have to pay that much more for locally made products.

But, I think what does happen is - companies are only making maybe 10% profit margins. So a few % is huge. And buyers are very price sensitive. So a $100 item versus an equivalent $105 is a no-brainer. The shopper picks the $100 item.

For consumers to "Buy American" there needs to be products on the shelf, and some clear benefit marketed to the consumer.

I'm not sure 'Union Made' resonates with many people today who see the wages and benefits that some unions have managed (not meant to spark debate, just an observation).

-ERD50
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Old 08-05-2011, 06:52 PM   #8
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I wonder about this. Really, how much labor is in most products? Some typical consumer products that I worked on, where I saw the P&L statements, (USA) labor was only ~ 15% of the total cost, IIRC. So how much can be reduced, and how much is added with shipping, finished goods inventory etc. I'm not sure we'd really have to pay that much more for locally made products.
-ERD50
FWIW, I just retired from a manufacturing position after 35 years, and the company has plants all over the world. At my plant base hourly wages ranged from $25-$30/hr, non-union but highly automated and technical. Our domestic business fell about 40% with the recession and it's coming back very slowly and I seriously doubt they'll ever reach their pre-recession volumes again (unless other plants are closed).

The base hourly wages at our plant in Mexico started at $2/hr - yes, you read that right. They have fewer benefits too. They make much the same products and the had almost no loss of business during the "global" recession and they are still running strong.

That kind of differential is simply too much to overcome, customers can't eat that kind of premium and stay in business.

And again, we have no domestic consumer electronics manufacturing that I can think of...
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Old 08-05-2011, 06:58 PM   #9
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I never check the "Made in...." labels. Maybe I should...
Quote:
Originally Posted by winger View Post
"Buy American" comes to mind immediately. Honestly, I never look at where a product originates before I buy it. Should I start?
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Old 08-05-2011, 07:36 PM   #10
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This past week, I went to Harbor Freight Tools. Their prices were great, but everything was made in China. I would rather go to Sears and pay more for something made in the USA. Ultimately, I would like to buy everything made in this country.
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Old 08-05-2011, 07:39 PM   #11
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Where a product is made does impact my buying decision, but it's not a major factor. If a company makes a better product (for my purposes) that costs less, Ill probably buy it regardless of where it is made.

I think the folks making $2 an hour turning out good stuff probably deserve my business, and I know the money they earn helps support entire families in some very poor places.

Menards, the big home improvement store, has "Made in the USA" sales several times per year. I'm always surprised at the number of mundane commodity items still made in the US. And I like to buy them if they are good.

Okay, a humorous take on the subject:

Gap Unveils For Kids By Kids Clothing Line: The Onion
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Old 08-05-2011, 09:32 PM   #12
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Quote:
Originally Posted by Midpack View Post
Quote:
Originally Posted by ERD50
I wonder about this. Really, how much labor is in most products? Some typical consumer products that I worked on, where I saw the P&L statements, (USA) labor was only ~ 15% of the total cost, IIRC. So how much can be reduced, and how much is added with shipping, finished goods inventory etc. I'm not sure we'd really have to pay that much more for locally made products.
-ERD50
FWIW, I just retired from a manufacturing position after 35 years, and the company has plants all over the world. At my plant base hourly wages ranged from $25-$30/hr, non-union but highly automated and technical. Our domestic business fell about 40% with the recession and it's coming back very slowly and I seriously doubt they'll ever reach their pre-recession volumes again (unless other plants are closed).

The base hourly wages at our plant in Mexico started at $2/hr - yes, you read that right. They have fewer benefits too. They make much the same products and the had almost no loss of business during the "global" recession and they are still running strong.

That kind of differential is simply too much to overcome, customers can't eat that kind of premium and stay in business.

And again, we have no domestic consumer electronics manufacturing that I can think of...
Those numbers are roughly in-line with what I knew about also.

But even a 10x differential in labor rates does not mean all that much if the labor content of the product is 10%, and then part of that is offset with shipping, and other issues. So say a 7% product price differential - significant, but not a total make/break deal for the purchaser.

But like I said - it's enough that it doesn't even get on the shelf, and the consumer doesn't even get to make the choice to "Buy American". That choice was already made by the retailer.

FWIW, I'm a bit conflicted on the 'Buy American' idea. On one hand, sure, support our local economy, help out our friends and neighbors, create local jobs, etc. OTOH, if others are willing to do that work for $2 and someone here demands $25, well, I gotta think the person willing to do it for $2 is in far worse shape, and they should get a chance to improve their life. The alternative to $2/hr must be pretty sad.

-ERD50
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Old 08-05-2011, 09:40 PM   #13
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I really try to "buy American". It gets harder and harder to find products made in the USA.
I avoid "Made in China" like the plague, especially food products.
You get what you pay for, and low price usually means a shorter service life or inferior ingredients.
YMMV
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Old 08-05-2011, 10:15 PM   #14
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I really try to "buy American". It gets harder and harder to find products made in the USA.
Since we are talking buying from "our country" here (I hope), try substituting "Canadian" for American and "Canada" for USA. You guys have got it easy, usually you can find something.
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Old 08-05-2011, 10:59 PM   #15
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I've always been confused by the term "Buy American". What does that actually mean?

For instance, you can buy a certain brand car, but the parts are globally sourced (most times, depending on price). It may be final assembled here (American workers get paid), but the profit on the car goes to the offshore owners (think Japan/Korea/etc.)

.
At least it is giving jobs to workers in the United States. I bought DW a new Accord in June. Honda claims 80% made in US. What does that really mean?
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Old 08-05-2011, 11:45 PM   #16
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We can pay $2/hr for someone in Mexico to make it and have our taxes raised to pay for unemployed, food stamps, etc...or we can really look hard for things that are made in USA.

We are a spoiled, selfish age group, made a fair wage, but don't want our own children to enjoy the same conveniences.
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Old 08-06-2011, 01:05 AM   #17
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We can pay $2/hr for someone in Mexico to make it and have our taxes raised to pay for unemployed, food stamps, etc...or we can really look hard for things that are made in USA.

We are a spoiled, selfish age group, made a fair wage, but don't want our own children to enjoy the same conveniences.
+1
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Old 08-06-2011, 03:25 AM   #18
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(snip) I avoid "Made in China" like the plague, especially food products.(snip)
Me too, but it is getting harder and harder to find clothing that isn't from China. I know how to sew clothes, but even lots of the yardage in fabric stores is Chinese-made now.
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Old 08-06-2011, 05:49 AM   #19
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I buy "Made in America" from local folks whenever I can.
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Old 08-06-2011, 05:56 AM   #20
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I let quality and price dictate. Lately, seems I've been mostly satisfied with products made in the good old USA.

Stuff from China, seems sometimes one gets a great bargain but other times the product is inferior (can anyone say, cheap plastic that breaks too easily?).
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