Many Americans decry the exporting of manufacturing jobs to other countries – namely China and México. Their argument being that Americans should have the jobs to make the products people need. Never mind that American labor is much more expensive causing the products to cost more. These same complainers about the state of manufacturing jobs also want consumables to cost less.
Donald Trump has led the effort to return manufacturing jobs back to America.
Here are the uncomfortable facts that all avoid. It comes down to money.
Publicly it is easy to demand that jobs return to America. It makes for great sound bites.
But here is the truth. The U.S. federal government buys the things it needs based on price.
Texas-based Prestige Ameritech usually makes about 250,000 masks a day, according to a Wired Magazine article posted on March 16, 2020. When the pandemic hit, the company increased production to 1 million more and they can’t keep up with the demand.
Another global manufacturer of the N95 mask is 3M. It has manufacturing plants in the U.S. and in China. The U.S. Department of Health and Human Services says that 95% of “surgical masks used in the US” are made overseas. Most of those in China.
Here is where things get very interesting for those that demand Americans manufacture the products Americans buy.
3M was forced to make a deal with the U.S. federal government yesterday to allow it to export masks made in America to Canada and Latin America. Those are masks made by US workers in the United States. In return, 3M committed itself to “import more than 166 million respirators from China over the next three months” to allow it to continue exporting its American-made masks to other countries.
It is important to note that the respirators that 3M will be importing into America are made by 3M workers working in China.
In other words, masks made by American workers are being exported to other countries and masks made by Chinese workers are being brought back to America. All the workers work for 3M.
But it gets worse for the idea that Americans can bring back manufacturing to country.
In an NPR interview by Mary Louise Kelly yesterday, Mike Bowen of Prestige Ameritech tells those listening why American manufacturing can’t come back to America.
Bowen relates how his American company increased production during the H1N1 (2009) epidemic to meet demand. Bowen says his company hired 150 new American workers to meet the demand from American hospitals. When the H1N1 crisis was over, Bowen’s company nearly went bankrupt and was forced to layoff the 150 employees because American hospitals and other users of its products went back to buying foreign products.
It is greedy American companies is what some readers may be thinking. But Mike Bowen explains it succinctly.
When asked by the radio moderator what is the percentage of orders, he delivers to the federal government is, his answer was ZERO.
All his customers are private. His company has no orders from the U.S. federal government. Bowen adds that over the last ten years – since the H1N1 crisis – his company regularly submits bids to the Department of Defense and the Veterans Administration for masks and they have not been awarded a single federal contract because they “choose masks that are made in Mexico because they’re cheaper”.
Even during the crisis where Donald Trump is demanding that American companies do more, a Texas company like Prestige Ameritech isn’t selling to the U.S federal government products the government needs that are being made by American workers. Instead, the Trump administration is coercing 3M to export American-made products made by Americans to import Chinese made ones, all made by the same company – 3M.
Riddle me that!
The worst part is that Prestige Ameritech has again risen to the occasion to help in the latest pandemic and when the crisis is over it will once again be forced to ramp down production when American companies it is helping today go back to importing the products they buy.
According to a Wired article on March 16, 2020, American-made masks “retailed for about 10 cents” each while Chinese-made ones sold for 2 cents each.
Before anyone complains about the private companies buying on price, they should first demand that the Trump administration buy from American companies like Prestige Ameritech after the crisis is over. They should lead by example.