National Security, the Economy and Good Jobs are at Stake

The virus pandemic and issues with personal protection equipment unveiled a troubling reality: "The United States can no longer produce what it needs in a time of crisis, even if those things were invented here."

So say Dan Breznitz of the University of Toronto and business writer David Adler, in a recent guest column in the New York Times.

Supply Chain Digest Says... Unfortunately, US history, such as the lack of success for Walmart's several "Made in USA" campaigns, may not bode well for a "Made in USA" sentiment. What do you say? Click here to send us your comments Click here to see reader feedback

The US has let its manufacturing might dwindle, the authors say, in the quest for short term profits available from shifting production to China and other low cost countries

"The country, once a manufacturing powerhouse, is populated by corporations that have moved manufacturing overseas and lost their ability to produce domestically, leaving little behind except shell companies that employ relatively few people," Breznitz and Adler write.

The US now produces very little of a number very essential products, from medicines to computers and smart phones, they note.

The lower prices for imported goods certainly were attractive to US consumers, in part why there was not more pushback against these corporate sourcing strategies.

"But the country lost sight of the critical requirements of a vibrant economy - which is good jobs," Breznitz and Adler say.

The pandemic has exposed just how far down this path the country has gone, the authors say, and opened a chance to fix before the next crisis hits.

Breznitz and Adler say the US should set an aggressive goal of gaining back a quarter of overall production away from Asia and the greater China region.

"That could not only affect preparedness for a subsequent crisis but also restore America's position as a global manufacturer and a bastion of good jobs," the pair add.

Critically, the US is even falling behind in key new technology products, where it has always dominated, such as 5G and the most cutting-edge computer chips.

And as this trend continues on, the US is increasingly creating not well-paid manufacturing jobs but lower-paid services jobs instead.

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It can be done, Breznitz and Adler write, noting "America is still the world's second-largest manufacturer, and has retained pockets of the needed skills, from the shop floor to management of production."

But to make any of this happen, there of course has to be strong demand for US-made products. One way to address that is to mandate federal, state and local governments buy US made goods.

The authors also recommend that companies that are receive federal aid for crises should be required to move a significant percentage of their sourcing and production back to the United States. Government should also move to stop predatory pricing by foreign manufacturers to help generate stable dmoestic demand.

Breznitz and Adler also have hopes that consumers will be willing to pay for US-made goods.

For example, they argue that "once consumers learn that not all generic drugs are alike, with pronounced differences in quality and safety, depending on the country of manufacture, many will gladly add a few cents for drugs using American-made active ingredients, perhaps with packages stating that their products are free from foreign-made active ingredients and were manufactured by fairly treated workers.

Unfortunately, US history, such as the lack of success for Walmart's several "Made in USA" campaigns, may not bode well for a "Made in USA" sentiment.

In fact, Breznitz and Adler lobby for a heavy government hand in pushing US-made goods.

"Federal law should require all manufacturing industries to disclose how much of their sourcing and critical production takes place in the United States," they argue, adding that "It should be illegal for companies to use terms such as "an American tradition" on the packages of goods that were completely produced in China."

It's going to be quite an effort, the authors acknowledge.

"The task is difficult and will take years to bear fruit," they conclude, but add that "there is also the chance to secure prosperity for future generations."

SCDigest's Take: This is the latest in what has been a growing number commentary along similar lines. Perhaps the national security risks from losing manufacturing in the US may serve a real catalyst for governments, businesses and consumers.

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