When the shift changes in the late afternoon, thousands of Haitians stream out from under an arched entrance labeled “Parc Industriel Metropolitain” toward the traffic-choked streets of Port-au-Prince. Among them is David, a thin 32-year-old man in a short-sleeve dress shirt and slacks, who works at one of the many garment assembly factories here, sewing pants for export to the United States. Through a Creole interpreter, David says the way he and his co-workers are treated is pa bon—not right.
Yet a lot of high-powered people with a stake in Haitian affairs think jobs like David’s represent the answer to Haiti’s problems. The U.S. State Department, the Inter-American Development Bank and the government of Haitian President Michel Martelly recently pulled together
more than $300 million in post-earthquake subsidies to create another industrial park just like this one but in northeast Haiti, with Korean textile manufacturer Sae-A as its anchor tenant. Then-Secretary of State Hillary Clinton and former President Bill Clinton both spoke at the park’s opening ceremony, hailing it as the centerpiece of U.S. efforts to help Haiti recover from the devastating 2010 quake. Secretary Clinton echoed President Martelly’s mantra that Haiti “is open for business.”
As the Haitian plant of Sae-A began filling its first order–
76,000 T-shirts for Walmart—the politicians smiled in satisfaction. More than a thousand Haitians had been put to work—a significant step for a nation where 80 percent of the ten million citizens lack jobs in the formal sector.
At least that was the theory behind the enormous amount of effort and money invested in bringing these jobs to Haiti. In 2008, the U.S. Congress passed the
Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II), providing customs exemptions that strongly incentivize corporations to import goods to the US. assembled by the Haitian textile and garment industry. This policy received a prominent imprimatur in 2009, when Paul Collier, an Oxford professor of economics and former director of the World Bank’s Development Research Group, prepared a report on Haiti at the request of UN Secretary-General Ban Ki-moon. The key to Haiti’s economic recovery, Collier concluded, is the Haitian garment industry and its potential to create hundreds of thousands of Haitian jobs.
Collier expressed no concerns over the likelihood that those jobs would pay sub-poverty salaries. In fact, Collier and others see the key to Haiti’s future in the large supply of desperate Haitians willing to work for rock-bottom wages. “Due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China, which is the global benchmark,” he wrote in the report.
The U.S. has worked hard to keep them that way. Diplomatic cables obtained by Wikileaks show that the U.S. State Department assisted contractors for Fruit of the Loom, Hanes, and Levi’s in a successful campaign to block a planned minimum wage increase unanimously approved by the Haitian Parliament in 2009. That increase, driven by a series of worker strikes and demonstrations, would have compelled the contractors to pay 62 cents per hour (about $5 per day) to Haitians sewing clothing for sale overseas. But Haitian government leaders caved in to U.S. pressure and dropped the textile industry minimum wage to about $3/day. The U.S. then provided more assistance to Haitian garment companies through duty exemptions in the
Haiti Economic Lift Program (HELP) Act in 2010. Though this legislative largest cut overhead for the companies, Haitian workers are still the lowest paid in the hemisphere.
David explains what that pay scale means in real terms. Gesturing in the direction of the workers leaving the industrial park, he says that most of them earn about 200 Haitian gourdes per day. The typical exchange rate is 40 Haitian gourdes for one U.S. dollar, so their salary equals about $5 each day. By the time they pay for transportation to work and a simple meal of plain spaghetti and juice during the workday, they head home with only 40 gourdes, about one U.S. dollar. And they have not yet paid for dinner or housing. Yet unemployment is so pervasive here that the companies count on a reliable supply of Haitians willing to do the work at these sub-poverty wages—just as Paul Collier predicted.
David’s cost of living analysis was backed up by other Haitians I talked with. In 2011, the AFL-CIO-supported
Solidarity Center conducted a
study estimating the living wage for apparel workers in Port-au-Prince. Factoring in the costs of necessities like food, housing, cooking fuel and child care, the Solidarity Center estimated a living wage for an adult with two dependents to be 1,152 gourdes (about $29) per day.
The current wave of global support for garment-export-based economic development in Haiti has a precedent, as does the resulting struggle by Haitian workers to make ends meet. Under the dictatorship of Jean-Claude Duvalier in the ’70s, the U.S. Agency for International Development launched a campaign to transform Haiti into the “Taiwan of the Caribbean,” i.e. the supplier of the cheapest export-assembly labor in the Western Hemisphere.
Wages were held down by enormous unemployment and by little prospect of worker activism under a repressive regime. Duvalier, politically and financially indebted to the U.S. and the International Monetary Fund, agreed to a neoliberal economic regimen that eliminated nearly every obstacle to free trade. By 1984, Haiti had become the 9th-largest supplier of goods to the U.S., mostly assembled products such as baseballs, clothing and toys.
The assembly companies and their U.S. consumers benefited from the arrangement. But a host country does not get much value from an industry where raw materials are imported in and the assembled products are shipped out. The coveted “multiplier effect,” produced when goods are produced and purchased locally, is absent from this export-only model. Combined with sub-poverty wages that provided little purchasing power to workers, the result was that all of the bustling export-assembly activity did not move the economic needle for the Haitian people.
Haiti certainly needs economic developm
ent, b
ut there are other models to pursue, including agricultural practices the Haitian people successfully followed for generations. Separate from the often-dysfunctional government, rural Haitians adhered to the lakou system of property management that divided former plantations into small plots and yielded crops that supported the extended families living there. Haiti met its own food needs and exported to other countries.
But heavy-handed U.S. policies destroyed that legacy. Beginning in the 1970s and 1980s, the IMF, with the U.S. as its largest shareholder and dominant voice, forced Haiti to dramatically reduce tariffs on imported staples. The Haitian tariff on rice, for example, was dropped from 50 percent to the current rate of 3 percent, compared to a regional average of 20 percent. Haitian farmers can no longer compete with food imports from the U.S. and other countries, where crops are highly subsidized by their governments. As a result, hundreds of thousands of Haitians have migrated from the countryside to Port-au-Prince, where they compete to provide cheap labor for garment-assembly companies under harsh conditions.
David says his workplace, at a company called Interamerican Woven, is brutally hot—a literal sweatshop—with little ventilation and limited potable water. An
October 2012 report, produced by the International Labor Organization as part of the Hope II legislation, confirms that the company and several others failed to meet baseline requirements for workplace conditions, such as high temperatures and clean drinking water. The report includes similar findings for several other garment assembly companies.
Jackson works for one of those companies, Global Manufacturers and Contractors, assembling T-shirts with tags like Hanes and Champion. Jackson and his wife have two young children. To make ends meet, both parents work six days per week in garment factories. Jackson’s wife skips church on Sunday to report to an additional part-time job. Yet they still must borrow from family and friends to pay the rent and keep food on the table.
Like David, Jackson is an active member of a syndicat of workers advocating for better wages and conditions. Company management pushes against the union, they say, harassing its members whenever possible. Recent investigations by the International Labor Organization and
Haiti Grassroots Watch confirmed widespread union-busting in the Haitian apparel industry. “The people fired for being part of the union make a list this long, “ Jackson says, holding his hands two feet apart. “They find a different reason to let them go, but they are tagged because they are part of the syndicat.”
The companies could easily pay their employees better, Jackson says. His position is backed up by economic analysis by the World Bank’s International Finance Corporation, which reviewed the competitiveness of the Haitian garment assembly industry in 2011. The report concluded that preferential market access to the U.S. provided by HOPE II and HELP, along with comparatively low sea freight costs, provide a distinct market advantage to these companies. “The argument that factories in Haiti can’t raise wages is bogus, as they have some of the most competitive costs in the world already,” says Jake Johnston, a researcher on Haiti issues for the Center on Economic and Policy Research.
The T-shirts Jackson makes for GMC are shipped to Etazini—the U.S.—so I ask him if he has any message for Americans. He thinks for a moment, then replies in Creole. “Wi. I appeal to their conscience and hope they ask questions about what they are buying. We make T-shirts for cents, they buy them for dollars,” he says. “That is the reason we come together to support each other; to fight for fairness.”
Name of workers in this piece have been changed to protect them from retaliation.
Google Glass Will Be American Made
in Uncategorized/by MAM TeamThe decision to manufacture in California will boost President Barack Obama’s drive, set out in his State of the Union address, to ensure “the next revolution in manufacturing is ‘Made in America’”. In December, Apple chief executive Tim Cook pledged to invest $100m in American manufacturing. Foxconn has also said it is considering expanding its US operations in response to growing customer demands.
Glass is an ambitious example of so-called wearable computing, Silicon Valley’s latest gadget obsession. Its inbuilt camera is controlled by voice recognition software and can send photos and videos directly to the web, via a connected smartphone, while a small screen above the wearer’s right eye displays search results and other information.
The small scale, high cost and complexity of the project’s initial run makes it practical to base manufacturing operations near the search company’s Silicon Valley headquarters, according to people briefed on the plans.
Only a few thousand Google Glass devices will roll off the Californian factory line in the coming weeks, rather than the millions of iPhones and other electronics which Foxconn typically produces at its plants in China, where the vast majority of the world’s gadgets are made. It is also not clear how many people the facility will employ.
Google said on Wednesday that it would give 8,000 contest winners the opportunity to buy the $1,500 devices. Although no launch date has been set publicly, Glass is expected go on sale to the mass market later this year.
Manufacturing locally will allow Google’s engineers to be closely involved with the production process and provide more opportunities for last-minute fixes and for personal customisation.
Although many components are being sourced from Asia, final assembly will be done in Santa Clara. Foxconn and Google declined to comment.
Such moves may also blaze a trail for Silicon Valley’s resurgent community of hardware start-ups, which remain largely reliant on cheaper offshore manufacturing. As contract device makers scale up production for large clients such as Apple and Google, their prices will fall and provide capacity for smaller companies too.
Many of the people waiting to receive Glass include developers who ordered a pair at last June’s Google I/O event in San Francisco, as well as some handpicked Google partners. Some tech and media companies, including Evernote, Path and the New York Times, are already creating apps to work on the headset. The “Explorer Edition” of Glass currently being manufactured is likely to be unveiled at this year’s I/O.
Google’s first attempt at building its own hardware was last year’s aborted Nexus Q, a music and movie-streaming device that was also made in Silicon Valley. The physical design of the small spherical unit, which included touch sensors, precision-machined zinc housing and 33 LEDs, was widely praised. But Google pulled the unit from sale last August, just weeks after unveiling it, without providing any reason for the move.
Google’s previous hardware partners have primarily been other branded electronics companies such as Taiwan’s Asus and South Korea’s LG, with which it has developed different generations of the Nexus line of flagship Android smartphones and tablets.
Additional reporting by Sarah Mishkin in Taipei and Richard Waters in San Francisco
Hottest Accessory for Spring? A Made in U.S.A. Label
in Uncategorized/by MAM TeamWhat used to be a patriotic rally cry of Appalachian and Rust Belt states (having grown up in a West Virginia steel-working family, I can say that) is now the socially-responsible and eco-friendly marketing campaign for a new trend of designers.
D.C.-based designer Tim Neill will launch Red Hand, his new line of accessories for men, at theWonderland Ballroom (1101 Kenyon St NW in Columbia Heights) from 5:30-9 p.m.
And N.Y.-based designer Allison Parris is showcasing her stunning spring line of frilly, girly-girl party dresses at Room & Board (1840 14th Street NW) from 7- 9 p.m.
Two very different designers. Two very different product lines. One similar mission — producing unique, high-quality clothing and accessories with fair-wage stitching and socially-responsible thread counts.
For both Neill and Parris, this is philosophy mixed with good business. They have identified a growing demographic — people who shop consciously.
“We are absolutely seeing a shift in consumer attitude,” adds Neill, whose Red Hand line focuses on men who are “bored with the mediocre products offered by many of the retail apparel chains and who can’t afford the premium stores or boutiques.”
“I think that people finally understand the repercussions of their buying decisions,” he adds.
Parris feels it’s a slowly growing trend. “I think little by little, as the economy gets better and people can afford it more, it will continue to swing further in that direction.”
She built her line “around the idea that ‘retaining moral values’ and ‘being able to wear beautiful, well-made clothing’ are not mutually exclusive actions.”
And to her fair wage is a “feel-good thing.”
“You want to know that your dress isn’t made by child labor and that the people making it are being treated fairly,” she explains.
Forget wonks, academics and think tanks. When discussing the problems of starting a business in the U.S., there’s no more knowledgeable source than someone actually engaged in the process. Neill sounds more like a Harvard economics professor than entrepreneur as he talks about getting Red Hand operational. No offense to entrepreneurs.
“The biggest challenge we had in making (our) product here,” he explains, “was identifying good and viable manufacturers to work with.” In fact, if he were president for a day, Neill would “fund and support institutions charged with pairing ideas and companies with viable manufacturers.”
On the lighter side. It’s fashion. Nobody wants to wear socially-conscious fashion if it sucks. Both product lines are fun, unique and inspired.
And if you think a night out with fashion does not a good date make … well, you’d be right.
But that’s okay.
Because tonight the men can drink a pint at Wonderland and peruse Neill’s belt buckles hand-crafted from auto parts and pharmaceutically-themed neckties and the women can succumb to Parris’s 1950s-inspired confections while being seduced by Don Draper. In their heads. Room & Board has just the right set design for that fantasy. Hopefully, they’ll be serving very dry martinis, a detail I could not confirm.
Although, if gift-buying is in your near future, I suggest you pick accordingly.
Reinvigorate America, One Tradesman At A Time
in Uncategorized/by MAM TeamClosing the skills gap
“The Skills Gap is not a mystery; it’s a reflection of what we value,” explains Mike Rowe, Host of Discovery Channel’s Dirty Jobs, and CEO of mikeroweWORKS, in the publication’s foreword. “And if we’re serious about closing the gap, we need to reconnect with that part of our workforce. We need to reinvigorate the trades. We need to confront the stigmas and stereotypes associated with skilled labor, and let go of this absurd belief that a four-year degree is the only viable way to acquire useful knowledge.”
Manufacturing in America
If every American were to spend just $64 a year on products made in the U.S., over 200,000 new jobs would be created. In a nation where the unemployment rate is still soaring, these numbers are startling. “Consumers should be concerned about buying American-made, not just because the products are safer and of higher quality, but because doing so creates jobs and minimizes our carbon footprint,” says Margarita Mendoza, founder of Made in America Movement.
In collaboration with American-made toy manufacturer K’Nex, Mediaplanet has launched a social media giveaway to promote the concept of “Made in America.” Readers are encouraged to submit an image of their favorite made in America product, and ten lucky readers will receive an American-made K’nex 50 Model building set. Further details on the giveaway can be found on Employing America’s digital campaign website.
Mediaplanet’s Campaign
In partnership with Air Products, All American Clothing, Bill Clinton, Caterpillar, Inc., Ford Motor Company, General Electric, Go Build Alabama, Haskell, IRWIN Tools, MikeRoweWORKS, The National Center for Construction Education and Research, Salary.com, SkillsUSA, Snap-on Tools, Made in America Movement and The Rodon Group/ K’nex, a call to action has been created to ensure that awareness is raised concerning the skilled labor gap.
The full report can be downloaded here. Employing America
SOURCE: MediaPlanet Publishing
GOLDMAN SACHS: There Is No Sign Of An American Manufacturing Renaissance
in Uncategorized/by MAM TeamMar. 24, 2013
However, Hatzius argues that all of the signs reflect a recovery that is “squarely cyclical,” not structural. In other words, U.S. manufacturing has yet to demonstrate that there is a major long-term shift going on in the world.
“Evidence for a structural renaissance is scant so far,” writes Hatzius. “Measured productivity growth has been strong, but US export performance — arguably a more reliable indicator of competitiveness — remains middling at best. And at least so far, there is not much evidence for large positive spillovers from the U.S. energy cost advantage to broader manufacturing output.”
Hatzius takes a close look at export market shares because they are “relatively easy to measure and are an intuitive gauge.” Here’s what the data tells him:
“But we believe the reason for this will be broad economic improvement that benefits all sectors, especially the more cyclical ones, not a structural U.S. manufacturing renaissance,” he writes.
"Made in America?" Not Any Time Soon
in Uncategorized/by MAM TeamThe French had done it — in fact, still do to some degree – provide incentives to both manufacturing and consumption to remain in the patrimoine. But they have a country the size of Texas, with a largely homogeneous population that’s controllable by the benign socialist system in place there.
Four years and hundreds of millions of 1970 dollars into that “Crafted with pride in U.S.A.” campaign, it was deemed an utter failure. The sound of soft gloating giggles began issuing from Asia. Occasionally one would see products with “Made in USA” stamped on them – Usa being the name of a factory town in Japan. Manufacturing left America, and consumers, who months earlier had avidly responded to research questionnaires that they would favor apparel made in the U.S. and would in fact pay a premium for it, began to get comfortable with clothing and other goods made elsewhere.
That comfort has extended right into the Internet age, where everything and anything can be globally sourced by anyone, at any time. Consumers have now gained so much power that retailers feel real pressure not just to keep from raising their prices, but to consistently lower them.
“Those who cannot remember the past are condemned to repeat it,” wrote the philosopher George Santayana. A recent study conducted by the Boston Consulting Group, as well as an earlier survey by the NPD Group in the fall of last year, found that upwards of three quarters of consumers surveyed thought it was extremely or somewhat important to buy apparel made in the U.S., while about 70 percent said they were willing to pay variously higher prices for said goods.
Hogwash, says I. Not the research methods. Not even the accuracy of the findings.
They’re essentially the same findings as those from the research conducted in the 1970s — that consumers would favor apparel made in the U.S., and indeed, would pay a premium for it. It was the actual behavior of these same consumers that showed up the research as hogwash. The goal of that research and its subsequent consumer marketing campaign was to save the industry from moving offshore.
Most of the retailers during that period were reluctant to sign on in support of the program. Why? Forget the research findings, the consumer’s buck stops at their cash registers. They were smart enough to know that if their blue jeans had a ”Crafted With Pride in the U.S.A.” label, but sold for five bucks more than their competitor’s “Made in China” jeans, then no bucks would be stopping at their registers.
So, bye-bye manufacturing.
Ironically, the findings from the current BCD and NPD research would like us to believe that we can get manufacturing back here again.
Are We Condemned to Repeat History?
If millions were lost, and the campaign to save the manufacturing industry failed in the ‘70s, based on the belief that consumers would change their behavior due to a patriotic “call to duty” in favor of getting more for less, what is it that makes this time any different? And back then it was to try to save much of what was here. Can you imagine what the cost might be to get back even part of what is gone?
Are we to believe consumers are more patriotic today, and have the mental – or economic — bandwidth to connect the dots promising more jobs if they spend a little extra for “Made in America?” Or, as evidenced by American consumers’ obsessive compulsion to find lower and lower prices — admittedly tied to their own shrinking wallets — when confronted with giving up one item on their shopping list to pay a little more for some ill-defined altruistic American future, what do you think our price obsessed consumer is going to do?
If I have to tell you, you don’t belong in retail.
We all say we’re going to do something and then do the opposite. And, why wouldn’t any red blooded American consumer say they would favor American-made goods and pay more for them? After all, to answer that way doesn’t cost them a penny, and they get to feel civic pride to boot.
So, could this possibly be retro sensationalism that’s being drummed up by these research guys and the media? Like this is the next big trend in consumer behavior? That somehow consumers are, all of a sudden and after four or five frightful years, concerned with our economy? Most do not care, nor could they know, what “the economy” is all about. To them the economy is their wallet.
On the supply side, there are retailers and brands that over the past 50 years have successfully built more stores and more stuff than the planet will ever need, and who are wildly slashing prices to steal just one more smidgen of a share of market that isn’t growing. Are they really going to suddenly build costs back into their products, based on what some consumers say they would do? Not likely. What is likely is a minimum wage increase. As one of my colleagues said, “The President wants to raise the minimum wage to nine bucks? Calculate what that will do to a pair of Lee jeans.”
However deftly these surveys may play into the current political and economic narrative, the reality is that brands and retailers that act on the belief that consumers are going to do the same as what they say they would do are lemmings jumping off of a cliff, in my humble opinion.
Yes, there are luxury and designer segments whose customers, even today, can afford to pay higher prices for goods made in the U.S. And there are other product niches and brands such as American Apparel, that are building their value, at least in part, around U.S. made goods or “insourcing,” as it’s being called. But taken together, all of these “patriots” comprise just a tiny sliver of the total.
On another front, all of the press that Walmart has been getting from beating their drum about committing to source $50 billion worth of goods in the U.S. over the next ten years is just that: “beating a drum.” One wonders how much of a PR stunt this is. $50 billion over ten years is $5 billion a year. They sell more than $400 billion worth of goods per year. And, the $5 billion they commit to U.S. sourcing – that’s a whopping one-and-a-quarter percent of their annual sales — will be spread over apparel, home, games, pet supplies and high-end electronics.
Doesn’t sound like a game changer to me. And the minute their core consumers reject even a penny added on to Walmart’s promise of “lowest price always,” the behemoth from Bento
nville
will be beating it back to Bangladesh as fast as you can say “outsourcing.”
There’s one time I can remember when this call to patriotic spending had its intended results. It was right after 9/11, when New York City Mayor Rudy Giuliani, backed up by the president, implored people to come to New York (or stay here) and spend money, to reignite not only the economy but also the morale of the city’s merchants, residents, and tourists.
Nevertheless, I contend that this article outlines a realistic assessment of where we find ourselves nationally today, as retailers and as consumers. It would be great if consumers were really imbued with enough patriotic emotion that they would sacrifice getting more for less, so that the U.S. could bring back and expand its manufacturing base, thus creating more jobs and regaining a robust and growing economy. Should we, or can we, take a lesson from the French?
I say not any time soon.
Robin Lewis is CEO of retail industry strategy newsletter, The Robin Report, and is co-author of the book The New Rules of Retail.
Longaberger Transitions To American Made Only
in Uncategorized/by MAM Team“Our company was built on American craftsmanship,” Baker said. “Our baskets have always been made right here in Ohio. We feel that it’s important to bring all of our production back to America.”
The company that began by solely producing baskets 40 years ago has morphed into a home goods store that produces pottery, woodcrafts, raw iron, glassware and other home accents aside from its famous baskets.
In the early 2000s, Longaberger moved its pottery manufacturing overseas because of an increased demand.
Now, CEO Tami Longaberger has decided to bring production back to its roots here in America within the next several years.
“It won’t be easy,” Longaberger said during a keynote speech in July 2012 in Columbus. “But it’s going to be worth every ounce of work we put into it.”
The festivities will be June 14 and 15 when Longaberger hosts the Great American Picnic. Aside from the world-record flag, there will be live entertainment, food and shopping for everyone in attendance. Baker expects it will be “like a hometown picnic” with people from towns across the U.S. gathered at the Longaberger Homestead in Frazeysburg.
There also will be a specially crafted red-white-and-blue basket auctioned off, with proceeds going to the Fisher House to support American service members and their families by allowing them to be close to loved ones during hospitalization.
“The public has rallied around this project,” Baker said. “It’s creating American jobs and supporting American families. That’s something everyone can get behind. I think that unified message is resounding around the country.”
Suntactics Solar Chargers Made in America with Zero Defects
in Uncategorized/by MAM TeamMany remote device solar charger manufacturers do not design and manufacture their solar chargers for durability and reliability. They are entirely focused on cost; “low-cost off-shore companies” manufacture their shoddy solar chargers where zero defects is a foreign concept. Their customers have expressed their concerns in the reviews of their solar chargers and, in several situations, have replaced their defective solar chargers with Suntactics solar chargers.
“Suntactics is more concerned about our long-term relationships with our customers,” said Dean Sala, Suntactics Founder and CEO. “And our customers continue to express their appreciation about the quality of our sCharger5 and sCharger12 solar chargers”.
Suntactics has set the quality and value standard for portable solar chargers with over 5,000 Suntactics solar chargers Made in America with zero defects.
About Suntactics
Suntactics focuses on portable solar and off grid solar energy products. Their current products are a unique 5-watt handheld solar charger called the sCharger-5 for solar charging smartphones like the iPhone and powerful dual port 14-watt solar charger called the sCharger-12 for solar charging multiple remote devices including tablets like the iPad. These compact high power and durable solar power chargers meet the needs for a wide range of portable devices. The units are manufactured in the USA at Fastrak, a veteran owned contract manufacturer. Suntactics is headquartered in San Jose, CA.
Buying American Spanning Multiple Industries – Homebuilders Getting in On The Act
in Uncategorized/by MAM TeamBut buying American isn’t just about the materials that go into your home. “If you build a house, you create two permanent jobs,” explains Anders Lewendal, owner of Anders Lewendal Construction in Bozeman, Mont. The economist-turned-builder challenges contractors to reallocate 5 percent of their spending to American-made merchandise. With figures corroborated by the Boston Consulting Group, Anders calculated that even this 5 percent modification would add 220,000 construction jobs and send $14 billion into the U.S. economy.
“Buying local has been around for generations,” Lewendal notes. “I’m just quantifying this idea and its economic meaning.”
Following Lewendal’s lead, Rowlett successfully built the first all-American-made home on the West Coast. He has since become an influential player in the “Buy American” initiative, a national effort by homebuilders to change the mindset of their industry as well as customers constructing new homes.
Jake Lewendal, Anders’ son who assisted on the original project, the shift to American-made is also about compassion. “From a buyer’s standpoint, it really does pull on your heartstrings,” he says. “When we first started looking at the working conditions for laborers in developing countries, it was basically all horror stories.”
In fact, Lewendal maintains that the cost saved when purchasing cheaper foreign-made products is often value lost in the end.
“If it’s made in America, it’s usually higher quality because of our regulations, our standards and our laborers, who have better working conditions and are more efficient because of the technology we have here,” he says.
There’s another advantage for energy-conscious homebuyers. “You’re creating a house with the lowest possible carbon footprint,” Rowlett says. “I mapped it out, and it took 274,000 travel miles to build a 97-percent American-made home. If I had gone to my nearest port outside of the country – in China – and took those same trips, it was 1.2 million travel miles.”
Further, Rowlett and the Lewendals confirm that even their 100-percent American-made homes cost only 2 or 3 percent more than normal construction fees. Rowlett asserts that builders can go as high as 97 percent American-made without incurring any additional cost.
So if it’s that simple – and equally priced – then why don’t more U.S. homebuyers embrace the idea?
“There’s an educational part to it,” says Garrison Hullinger of Garrison Hullinger Interior Design. Some of his clients worry that the design will suffer, or that the final product will not look the way they want – Hullinger has to assure them that’s not the case.
If you’re a homeowner looking to purchase American products for remodeling, Hullinger suggests skipping the large depot stores in favor of small businesses, which are more likely to carry the American-made products you seek.
In the end, buying American has ripple effects felt nationwide. “If we’re continuing to source for American materials, those people in the manufacturing plants will not have jobs,” Hullinger explains.
Jake Lewendal agrees. “That’s what the American initiative is really all about,” he says. “We’re creating jobs here in America and helping our neighbors.”
This Chart Will Change How You Think About Manufacturing
in Uncategorized/by MAM TeamConsider what this means. If someone had cornered you in 1980 and asked you to predict what the level manufacturing employment would be at in 2009, and you did a straightforward linear projection of the previous two decades, you would have gotten it almost exactly right. You wouldn’t have known about the fall of the Soviet Union or the rise of China or the scale of advances in international communication or automation, but you still would have gotten it almost exactly right.
Their book goes on to show that similar declines have happened, at roughly the same pace, all around the world.
Rather, the change is due to rapid productivity growth. That is, automation is reducing the amount of labor required to produce a given amount of goods. That means that prices fall. If people respond those price changes by buying more and more of the underlying good, then sales will increase and employment may not fall. But that’s not happened. Instead, people are saving money on manufactured goods and buying more services, instead. That’s led to the decline in manufacturing jobs.
Haitian Sweatshops: Made in the U.S.A.
in Uncategorized/by MAM TeamAs the Haitian plant of Sae-A began filling its first order–76,000 T-shirts for Walmart—the politicians smiled in satisfaction. More than a thousand Haitians had been put to work—a significant step for a nation where 80 percent of the ten million citizens lack jobs in the formal sector.
At least that was the theory behind the enormous amount of effort and money invested in bringing these jobs to Haiti. In 2008, the U.S. Congress passed the Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II), providing customs exemptions that strongly incentivize corporations to import goods to the US. assembled by the Haitian textile and garment industry. This policy received a prominent imprimatur in 2009, when Paul Collier, an Oxford professor of economics and former director of the World Bank’s Development Research Group, prepared a report on Haiti at the request of UN Secretary-General Ban Ki-moon. The key to Haiti’s economic recovery, Collier concluded, is the Haitian garment industry and its potential to create hundreds of thousands of Haitian jobs.
Collier expressed no concerns over the likelihood that those jobs would pay sub-poverty salaries. In fact, Collier and others see the key to Haiti’s future in the large supply of desperate Haitians willing to work for rock-bottom wages. “Due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China, which is the global benchmark,” he wrote in the report.
The U.S. has worked hard to keep them that way. Diplomatic cables obtained by Wikileaks show that the U.S. State Department assisted contractors for Fruit of the Loom, Hanes, and Levi’s in a successful campaign to block a planned minimum wage increase unanimously approved by the Haitian Parliament in 2009. That increase, driven by a series of worker strikes and demonstrations, would have compelled the contractors to pay 62 cents per hour (about $5 per day) to Haitians sewing clothing for sale overseas. But Haitian government leaders caved in to U.S. pressure and dropped the textile industry minimum wage to about $3/day. The U.S. then provided more assistance to Haitian garment companies through duty exemptions in the Haiti Economic Lift Program (HELP) Act in 2010. Though this legislative largest cut overhead for the companies, Haitian workers are still the lowest paid in the hemisphere.
David explains what that pay scale means in real terms. Gesturing in the direction of the workers leaving the industrial park, he says that most of them earn about 200 Haitian gourdes per day. The typical exchange rate is 40 Haitian gourdes for one U.S. dollar, so their salary equals about $5 each day. By the time they pay for transportation to work and a simple meal of plain spaghetti and juice during the workday, they head home with only 40 gourdes, about one U.S. dollar. And they have not yet paid for dinner or housing. Yet unemployment is so pervasive here that the companies count on a reliable supply of Haitians willing to do the work at these sub-poverty wages—just as Paul Collier predicted.
David’s cost of living analysis was backed up by other Haitians I talked with. In 2011, the AFL-CIO-supported Solidarity Center conducted a study estimating the living wage for apparel workers in Port-au-Prince. Factoring in the costs of necessities like food, housing, cooking fuel and child care, the Solidarity Center estimated a living wage for an adult with two dependents to be 1,152 gourdes (about $29) per day.
The current wave of global support for garment-export-based economic development in Haiti has a precedent, as does the resulting struggle by Haitian workers to make ends meet. Under the dictatorship of Jean-Claude Duvalier in the ’70s, the U.S. Agency for International Development launched a campaign to transform Haiti into the “Taiwan of the Caribbean,” i.e. the supplier of the cheapest export-assembly labor in the Western Hemisphere.
Wages were held down by enormous unemployment and by little prospect of worker activism under a repressive regime. Duvalier, politically and financially indebted to the U.S. and the International Monetary Fund, agreed to a neoliberal economic regimen that eliminated nearly every obstacle to free trade. By 1984, Haiti had become the 9th-largest supplier of goods to the U.S., mostly assembled products such as baseballs, clothing and toys.
The assembly companies and their U.S. consumers benefited from the arrangement. But a host country does not get much value from an industry where raw materials are imported in and the assembled products are shipped out. The coveted “multiplier effect,” produced when goods are produced and purchased locally, is absent from this export-only model. Combined with sub-poverty wages that provided little purchasing power to workers, the result was that all of the bustling export-assembly activity did not move the economic needle for the Haitian people.
Haiti certainly needs economic developm
ent, b
ut there are other models to pursue, including agricultural practices the Haitian people successfully followed for generations. Separate from the often-dysfunctional government, rural Haitians adhered to the lakou system of property management that divided former plantations into small plots and yielded crops that supported the extended families living there. Haiti met its own food needs and exported to other countries.
But heavy-handed U.S. policies destroyed that legacy. Beginning in the 1970s and 1980s, the IMF, with the U.S. as its largest shareholder and dominant voice, forced Haiti to dramatically reduce tariffs on imported staples. The Haitian tariff on rice, for example, was dropped from 50 percent to the current rate of 3 percent, compared to a regional average of 20 percent. Haitian farmers can no longer compete with food imports from the U.S. and other countries, where crops are highly subsidized by their governments. As a result, hundreds of thousands of Haitians have migrated from the countryside to Port-au-Prince, where they compete to provide cheap labor for garment-assembly companies under harsh conditions.
David says his workplace, at a company called Interamerican Woven, is brutally hot—a literal sweatshop—with little ventilation and limited potable water. An October 2012 report, produced by the International Labor Organization as part of the Hope II legislation, confirms that the company and several others failed to meet baseline requirements for workplace conditions, such as high temperatures and clean drinking water. The report includes similar findings for several other garment assembly companies.
Jackson works for one of those companies, Global Manufacturers and Contractors, assembling T-shirts with tags like Hanes and Champion. Jackson and his wife have two young children. To make ends meet, both parents work six days per week in garment factories. Jackson’s wife skips church on Sunday to report to an additional part-time job. Yet they still must borrow from family and friends to pay the rent and keep food on the table.
Like David, Jackson is an active member of a syndicat of workers advocating for better wages and conditions. Company management pushes against the union, they say, harassing its members whenever possible. Recent investigations by the International Labor Organization and Haiti Grassroots Watch confirmed widespread union-busting in the Haitian apparel industry. “The people fired for being part of the union make a list this long, “ Jackson says, holding his hands two feet apart. “They find a different reason to let them go, but they are tagged because they are part of the syndicat.”
The companies could easily pay their employees better, Jackson says. His position is backed up by economic analysis by the World Bank’s International Finance Corporation, which reviewed the competitiveness of the Haitian garment assembly industry in 2011. The report concluded that preferential market access to the U.S. provided by HOPE II and HELP, along with comparatively low sea freight costs, provide a distinct market advantage to these companies. “The argument that factories in Haiti can’t raise wages is bogus, as they have some of the most competitive costs in the world already,” says Jake Johnston, a researcher on Haiti issues for the Center on Economic and Policy Research.
The T-shirts Jackson makes for GMC are shipped to Etazini—the U.S.—so I ask him if he has any message for Americans. He thinks for a moment, then replies in Creole. “Wi. I appeal to their conscience and hope they ask questions about what they are buying. We make T-shirts for cents, they buy them for dollars,” he says. “That is the reason we come together to support each other; to fight for fairness.”
Name of workers in this piece have been changed to protect them from retaliation.