Economic Implications of Buying Local
Back in the day, it was unthinkable to ever buy foreign made consumer goods. A sense of national pride was felt when the words “Made in America” appeared on the label of a garment. That phrase was synonymous with quality, craftsmanship and ingenuity. Foreign made goods were thought to be inferior, cheap and low quality. When and why did all this change?
What caused the decline?
Manufacturing in the U.S. started to decline in the mid 1960’s when it accounted for 53% of the economy. In 1988 manufacturing declined to 39%, and by 2004 was only 9% of the economy.
Outsourcing and globalization were two of the factors that changed the world. Globalization increased the mobility of goods, services, labor and technology around the world. Throughout the 90’s, countries like Mexico started become a global manufacturing leader. When trade barriers were eliminated, access to foreign markets opened up.
Technological advances made outsourcing possible sending many jobs to other countries Accounting, computer programming, customer service and tax preparation are a few examples. Companies that took advantage of these two conditions enjoyed considerable cost savings as a result of cheaper labor. Building physical plants in other countries was much more cost effective as well It was cheaper to build and operate abroad.
Why is buying local important?
There are many reasons why buying domestic goods is important These are just a few of them:
– Culturally, we need our society to remember how important the “Made in America” label is to our economy. We need to reaffirm this emotional connection.
– Exports help our economy and imports weaken our economy. When imports are purchased money leaves the United States and local economies to pay for products manufactured abroad Many industries, such as the clothing and toy industries were impacted as a result of importing.
– An economy generating sufficient jobs with sufficient pay results in a powerful economy with generally contented citizens. Conversely, unemployment creates crises and social unrest like that seen during the Great Depression Middle class Americans today live in fear their jobs will be outsourced to other parts of the world.
– Especially for industries such as shipbuilding, aerospace and information technology should remain rooted in the United States. Those industries are critical to national security and should not be allowed to migrate outside of the United States
One can argue Americans enjoy lower cost goods as a result of importing but that will be less consequential as time goes on Fewer jobs mean fewer dollars flowing through local economies. Also the trade deficit will become so overwhelming the economy will suffer severe consequences as a result.
It is vital to the American economy to buy local and buy American. To help grow efficient manufacturing practices and create manufacturing jobs, contact us to learn about the services we provide or to discuss your most important business issues. Click the button below to learn about our services.
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