Post by Moses on Nov 23, 2004 14:29:10 GMT -5
www.masslive.com/printer/printer.ssf?/base/news-2/1101199907168150.xml
<br>
Demand drives global economy
Tuesday, November 23, 2004
By WILLIAM FREEBAIRN
wfreebairn@repub.com
.... Jones is one of the millions of customers lured by the low prices of the growing number of foreign-made products on U.S. store shelves. While most Americans support the idea of buying things made in the United States, huge numbers are voting with their feet by picking out products stamped "Made in China."
Economists and others say the trend has kept a lid on inflation, but even so, a cry of opposition to the foreign goods and those who sell them is rising across the region.
"The real dirty secret is that it's American multinational companies and retailers that are destroying our middle class and small and medium-sized manufacturers," said Fred Tedesco, president of a spring-manufacturing company in Bristol, Conn., and an advocate for buying American-made products.
The group he founded, Mad in the U.S.A., has held protests in front of Wal-Mart stores in Connecticut and Texas. Tedesco has told groups of manufacturers in Western Massachusetts about how his company lost contracts to foreign firms and had to lay people off in recent years.
Tedesco believes consumer protests could force retailers to buy more U.S.-made goods, in turn strengthening U.S. manufacturers and preventing them from opening overseas plants.
But many economists argue that consumers are getting a huge benefit from lower prices on products ranging from clothing to power tools and toys to furniture.
"The story is that Wal-Mart will go off-shore for as little as a nickel a unit," said John Donnellan, dean of business studies at Holyoke Community College. "The long-term economic impact of saving that nickel in terms of inflation and unemployment is far-reaching."
Tedesco does not buy the argument that workers benefit from the low prices of foreign goods. "You have to be a worker with decent pay before you can be much of a consumer," he said.
"I believe China has a master plan to take over certain industries," Tedesco said. "They're not going to stop at a certain level, either," he said.
Tedesco and his group of disgruntled manufacturers have joined forces with labor groups and opponents of large businesses to face down their mutual foe.
There is no question that fewer and fewer goods in stores such as Wal-Mart and Home Depot bear a "Made in the USA" tag.
The aisles at Wal-Mart in Springfield are filled with $44 microwaves made in Thailand, 27-inch "Durabrand" televisions made in China for just $169 and a $99 recliner also made in Asia.
"I don't know the percentage of American goods (in stores,) but it's small and it's getting smaller," Donnellan said.
The tool aisle includes only a few power tools not made in China.
Dozens of Black & Decker drills and saws are made in that company's China plants. A few circular saws are still made in Mexico or the United States.
The prices of power tools are lower than ever, and that is what shoppers said keeps them coming back.
"I know we're losing out a lot to overseas," said Richard Cunningham of Wilbraham. He said he shops only occasionally at Wal-Mart.
"I don't know where else you're going to go. People buy on price," he said.
Shopper Jack Thomas, visiting relatives from his retirement home in Arizona, was even more blunt.
"It's the global economy. The prices at Wal-Mart are the best around," he said.
He said talk about the dangers of outsourcing have been exaggerated.
Donnellan said that has been the appeal of discount retailers like Kmart, Target and Wal-Mart. "Wal-Mart will tell you that they bring goods to people who might not ordinarily have them - in terms of location or in terms of price," he said.
The loss of manufacturing jobs is being followed by a loss in white-collar technology jobs, including computer programming, engineering, financial services and customer support.
"We're becoming a nation of baggers and clerks," said Al Norman, an opponent of large chain stores from Greenfield. "I don't buy the notion that all we can do is swim with the tide on this," he said.
Norman's consulting group, Sprawl-Busters, provides services for community groups fighting so-called "big-box retailers." Although the vast majority of big-box retailers are welcomed into the communities where they open, a growing number face opposition due to traffic concerns, the way they treat workers or their impact on smaller retailers.
"The thing that encourages me is that more and more communities are fighting these stores," said Norman, who successfully campaigned to prevent a Wal-Mart from opening in Greenfield in 1993.
Wal-Mart is an example of a company that once touted the fact it sold products made in the United States, Norman said. Through the 1980s, the company made efforts to promote domestically made goods, even if the price was slightly higher.
That changed in the 1990s, as more and more manufactured goods were made in Asia and Latin America. Today, Norman wrote recently, "Wal-Mart is addicted to Chinese take-out."
Tedesco's Mad in the USA group supports a measure that would allow customers to prevent overseas workers from gaining access to their personal financial or health information. In addition, the group is pressing for states to mandate that state-contracted work be performed by domestic workers.
Unless efforts are made to preserve this work for U.S. workers, much of it could migrate overseas, Tedesco said. "That's going to reduce opportunity for us, that's going to reduce our wages and our security," Tedesco said.
Daniel P. Clifford, secretary-treasurer of Local 1459, United Food and Commercial Workers, said his union has been trying without success to unionize mass merchants such as Home Depot and Wal-Mart.
The union protested in front of the Springfield Wal-Mart two years ago, targeting its treatment of workers. Clifford said Wal-Mart does not offer affordable health care, charging high fees for employees earning $7 or $8 an hour to get coverage.
"Wal-Mart has been a silent participant in our negotiations with other companies," he said. Officials of Stop & Shop which is represented by the Food and Commercial Workers, have said Wal-Mart's lower benefits are a competitive advantage for the Arkansas company.
Wal-Mart's success has come at the expense of unionized retailers such as Caldor and Bradlees, Clifford said. Those two chains shut down, unable to compete with Wal-Mart's size and low costs.
Tedesco's group believes shoppers can have an effect if they insist on having the chance to buy U.S.-made goods, even at a slightly higher price. One man told a group meeting that he sometimes goes to Home Depot and loads up his cart with products from overseas and tells clerks he will buy the products if there are any available that are made in the United States.
Some consumers are reluctant to buy a product from China because of concerns over quality. Historically, goods made in Asia have rapidly increased in quality, although their price rises in the process.
"Part of it is an educational process," said Norman. "I say educate the consumer about buying quality goods," he said.
"The principle that you get what you pay for is still true," he said.
However, Donnellan said he believes the market for higher-priced domestically made goods of better quality will remain relatively small. And customers who buy such goods are not going to have an impact on the decisions of the large mass-marketers, who are less interested in niche products.
Just as the United States economy has been opened to foreign products, more and more foreign countries are becoming markets for U.S.-made goods. Wal-Mart operates dozens of stores in China and other countries.
Manufacturing groups are lobbying for more countries to remove trade barriers keeping out U.S. goods. Norman said there is evidence China is subsidizing the production of some goods.
Donnellan said domestic producers can still sell to mass merchants if they cut costs to a minimum and take advantage of their proximity to the retail locations.
The game-making division of Hasbro Inc., for example, has been able to continue to make board games like Monopoly and Scrabble in East Longmeadow by having the capacity to deliver extra copies of popular games to stores like Target with just a few weeks' notice. Manufacturers relying on foreign plants could never do so as quickly, officials there said.
Many manufacturers like Hasbro have survived by using a mix of U.S.-made and foreign-made parts in their products. Hasbro buys the dice and some plastic game parts overseas, but prints the game boards and packaging in East Longmeadow.
The increasing connections among the economies of all nations is helping some companies and hurting others, Donnellan said. Wages drop in some areas, rise in others, and inflation and recession are no longer limited by national borders, he said.
"It's not a simple issue. When we tout the global economy, there are wonderful aspects to it, wonderful by-products, but there's a price to pay as well."
Copyright 2004 MassLive.com. All Rights Reserved.
<br>
Demand drives global economy
Tuesday, November 23, 2004
By WILLIAM FREEBAIRN
wfreebairn@repub.com
.... Jones is one of the millions of customers lured by the low prices of the growing number of foreign-made products on U.S. store shelves. While most Americans support the idea of buying things made in the United States, huge numbers are voting with their feet by picking out products stamped "Made in China."
Economists and others say the trend has kept a lid on inflation, but even so, a cry of opposition to the foreign goods and those who sell them is rising across the region.
"The real dirty secret is that it's American multinational companies and retailers that are destroying our middle class and small and medium-sized manufacturers," said Fred Tedesco, president of a spring-manufacturing company in Bristol, Conn., and an advocate for buying American-made products.
The group he founded, Mad in the U.S.A., has held protests in front of Wal-Mart stores in Connecticut and Texas. Tedesco has told groups of manufacturers in Western Massachusetts about how his company lost contracts to foreign firms and had to lay people off in recent years.
Tedesco believes consumer protests could force retailers to buy more U.S.-made goods, in turn strengthening U.S. manufacturers and preventing them from opening overseas plants.
But many economists argue that consumers are getting a huge benefit from lower prices on products ranging from clothing to power tools and toys to furniture.
"The story is that Wal-Mart will go off-shore for as little as a nickel a unit," said John Donnellan, dean of business studies at Holyoke Community College. "The long-term economic impact of saving that nickel in terms of inflation and unemployment is far-reaching."
Tedesco does not buy the argument that workers benefit from the low prices of foreign goods. "You have to be a worker with decent pay before you can be much of a consumer," he said.
"I believe China has a master plan to take over certain industries," Tedesco said. "They're not going to stop at a certain level, either," he said.
Tedesco and his group of disgruntled manufacturers have joined forces with labor groups and opponents of large businesses to face down their mutual foe.
There is no question that fewer and fewer goods in stores such as Wal-Mart and Home Depot bear a "Made in the USA" tag.
The aisles at Wal-Mart in Springfield are filled with $44 microwaves made in Thailand, 27-inch "Durabrand" televisions made in China for just $169 and a $99 recliner also made in Asia.
"I don't know the percentage of American goods (in stores,) but it's small and it's getting smaller," Donnellan said.
The tool aisle includes only a few power tools not made in China.
Dozens of Black & Decker drills and saws are made in that company's China plants. A few circular saws are still made in Mexico or the United States.
The prices of power tools are lower than ever, and that is what shoppers said keeps them coming back.
"I know we're losing out a lot to overseas," said Richard Cunningham of Wilbraham. He said he shops only occasionally at Wal-Mart.
"I don't know where else you're going to go. People buy on price," he said.
Shopper Jack Thomas, visiting relatives from his retirement home in Arizona, was even more blunt.
"It's the global economy. The prices at Wal-Mart are the best around," he said.
He said talk about the dangers of outsourcing have been exaggerated.
Donnellan said that has been the appeal of discount retailers like Kmart, Target and Wal-Mart. "Wal-Mart will tell you that they bring goods to people who might not ordinarily have them - in terms of location or in terms of price," he said.
The loss of manufacturing jobs is being followed by a loss in white-collar technology jobs, including computer programming, engineering, financial services and customer support.
"We're becoming a nation of baggers and clerks," said Al Norman, an opponent of large chain stores from Greenfield. "I don't buy the notion that all we can do is swim with the tide on this," he said.
Norman's consulting group, Sprawl-Busters, provides services for community groups fighting so-called "big-box retailers." Although the vast majority of big-box retailers are welcomed into the communities where they open, a growing number face opposition due to traffic concerns, the way they treat workers or their impact on smaller retailers.
"The thing that encourages me is that more and more communities are fighting these stores," said Norman, who successfully campaigned to prevent a Wal-Mart from opening in Greenfield in 1993.
Wal-Mart is an example of a company that once touted the fact it sold products made in the United States, Norman said. Through the 1980s, the company made efforts to promote domestically made goods, even if the price was slightly higher.
That changed in the 1990s, as more and more manufactured goods were made in Asia and Latin America. Today, Norman wrote recently, "Wal-Mart is addicted to Chinese take-out."
Tedesco's Mad in the USA group supports a measure that would allow customers to prevent overseas workers from gaining access to their personal financial or health information. In addition, the group is pressing for states to mandate that state-contracted work be performed by domestic workers.
Unless efforts are made to preserve this work for U.S. workers, much of it could migrate overseas, Tedesco said. "That's going to reduce opportunity for us, that's going to reduce our wages and our security," Tedesco said.
Daniel P. Clifford, secretary-treasurer of Local 1459, United Food and Commercial Workers, said his union has been trying without success to unionize mass merchants such as Home Depot and Wal-Mart.
The union protested in front of the Springfield Wal-Mart two years ago, targeting its treatment of workers. Clifford said Wal-Mart does not offer affordable health care, charging high fees for employees earning $7 or $8 an hour to get coverage.
"Wal-Mart has been a silent participant in our negotiations with other companies," he said. Officials of Stop & Shop which is represented by the Food and Commercial Workers, have said Wal-Mart's lower benefits are a competitive advantage for the Arkansas company.
Wal-Mart's success has come at the expense of unionized retailers such as Caldor and Bradlees, Clifford said. Those two chains shut down, unable to compete with Wal-Mart's size and low costs.
Tedesco's group believes shoppers can have an effect if they insist on having the chance to buy U.S.-made goods, even at a slightly higher price. One man told a group meeting that he sometimes goes to Home Depot and loads up his cart with products from overseas and tells clerks he will buy the products if there are any available that are made in the United States.
Some consumers are reluctant to buy a product from China because of concerns over quality. Historically, goods made in Asia have rapidly increased in quality, although their price rises in the process.
"Part of it is an educational process," said Norman. "I say educate the consumer about buying quality goods," he said.
"The principle that you get what you pay for is still true," he said.
However, Donnellan said he believes the market for higher-priced domestically made goods of better quality will remain relatively small. And customers who buy such goods are not going to have an impact on the decisions of the large mass-marketers, who are less interested in niche products.
Just as the United States economy has been opened to foreign products, more and more foreign countries are becoming markets for U.S.-made goods. Wal-Mart operates dozens of stores in China and other countries.
Manufacturing groups are lobbying for more countries to remove trade barriers keeping out U.S. goods. Norman said there is evidence China is subsidizing the production of some goods.
Donnellan said domestic producers can still sell to mass merchants if they cut costs to a minimum and take advantage of their proximity to the retail locations.
The game-making division of Hasbro Inc., for example, has been able to continue to make board games like Monopoly and Scrabble in East Longmeadow by having the capacity to deliver extra copies of popular games to stores like Target with just a few weeks' notice. Manufacturers relying on foreign plants could never do so as quickly, officials there said.
Many manufacturers like Hasbro have survived by using a mix of U.S.-made and foreign-made parts in their products. Hasbro buys the dice and some plastic game parts overseas, but prints the game boards and packaging in East Longmeadow.
The increasing connections among the economies of all nations is helping some companies and hurting others, Donnellan said. Wages drop in some areas, rise in others, and inflation and recession are no longer limited by national borders, he said.
"It's not a simple issue. When we tout the global economy, there are wonderful aspects to it, wonderful by-products, but there's a price to pay as well."
Copyright 2004 MassLive.com. All Rights Reserved.