The Real Cost of Buying American

Last week, Judy wrote a fascinating blog post asking: Is buying American made products patriotic, sensible, or both? I wish I could tell you that there was an easy answer, but as she explained in her article, the forces of global economics are complex. An interesting Facebook discussion arose from the article, with a variety of options on either side of the issue. Amanda Stuber said, “If we would like to continue keeping our jobs we should buy American, as often as possible.” Several other readers agreed. For example, Brett Sebastian Huffine added, “Buying American made products supports our infrastructure. Outsourcing is a financial burden on our country.” But not everyone was on the same page. Jeremiah Forbes responded, “Buy where the advantage lies, buying American for the sake of buying American is stupid. Buy quality.”

All these readers made good points. Many of these arguments were familiar to me. My wife and I have had similar discussions every time we talk about buying a car. For the last ten years I’ve been driving an American made car which does not have a running AC, ends up in the shop at least three times a year, and has cost me several thousands of dollars in repair bills over the years. My wife drives a five year old Honda that has never had the slightest problem. I don’t think my car breaks down because it was made in America, I can find you a similar foreign made model that has just as many issues. Just like I don’t think my wife’s CRV is problem free because it is not American made. But in many ways, perception is reality. How often do you hear people claiming that foreign made cars are better quality, last longer, and break down less? Yet, two years ago, amidst the economic recession, J.D. Power and Associates found that US automakers surpassed foreign brands in quality for the first time in 24 years.

Perception matters. Despite improvements in quality, styling, and safety; domestic automakers have lost market share to European and Asian imports over the last few years. However, in most manufacturing sectors, the quality of foreign made goods is recognizably inferior to the quality of products manufactured in the United States. A recent BCG Perspectives survey found that 80% of US consumers would be willing to pay more for products labeled “Made in the USA” than those labeled “Made in China”. The same survey found that 85% of Americans and 82% of Chinese consumers said that they feel better about the quality of items labeled “Made in USA”.

So why do we still buy “Made in China”, if we think that American made goods are better than their foreign equivalents? The answer, of course, is cost. Yet, as Judy explained in last week’s blog post, the costs of foreign made products are rising. Given the superior quality of most American made goods, it now makes economic sense to reconsider the origin of our purchases. So what would happen if people just made a slightly greater effort to buy “Made in the USA”?

According to a 2012 ABC World News report, if every American were to spend just sixty-four dollars a year on products made in the USA, the result would be 200,000 new US jobs. Sixty-four dollars can be a lot for some of us, but aren’t you willing to pay more for certain items where quality really matters? Would you pay slightly more for an American made computer or tablet if you knew it would last longer? What about if you knew it would help your country?

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Consider this, in 1972 the manufacturing sector of the United States employed more Americans than any other sector, including government, and accounted for approximately 24% of the job market. That means that forty years ago, one in four employed Americans worked in a manufacturing job. By 2012, the number of Americans employed in manufacturing jobs dropped to 9%.

Two hundred thousand new jobs may not seem like much in the grand scope of things, but considering the recent recession, who can deny how important it is for two hundred thousand American men and women to be able to support their families and to have the dignity of a good days work. Is this worth sixty-four dollars a year? I never really thought buying American products was patriotic. I never really allowed that to enter into my decision making process. I always weighed cost and quality until I found a balance I felt good about. I have a computer made in the US and a cell phone that is foreign made. But after reading these surveys, I see my perspective changing. If the cost of rebuilding American manufacturing is as little as $1.33 per week, it is a cost I can live with. How about you?

David Hernandez

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