September 26, 2013: The truth behind Walmart's American-made push

Posted by mmcmullan on 09/26/2013

Good morning,

Back in August, retail behemoth Walmart hosted a conference meant to spur a revival of American manufacturing. That news, coming from a company that’s made its fortune with a decades-long focus on “always low prices” (read: cheap imports) caused quite a few eye-rolls around the country. But whether we bought into the company’s PR line or not, wrote Alliance for American Manufacturing (AAM) President Scott Paul, its pledge of $50 billion worth of purchases of American-made goods was worth something:

No one sets trends in the retail sector like Walmart. There is legitimate hope that where Walmart goes - or simply feints toward going - its competitors will follow. And in this case, that's a good thing for American manufacturing and American workers.

A new analysis from a pair of Reuters reporters agrees. The company is trying to get in front of a wave that has already started rolling, write Jessica Wohl and James B. Kelleher.

Some manufacturers are finding they can profitably produce certain goods at home that they once made offshore. And retailers like Wal-Mart benefit from being able to buy those goods closer to distribution centers and stores with lower shipping costs, while gaining goodwill by selling more U.S.-made products.

The article is worth a read. It takes a look at an equation which shows reshoring production increasingly makes sense.  But it’s also worth noting: While production may be coming back to the States, the number of American manufacturing jobs haven’t. The economy has only created 12,000 new ones since January. President Obama, for the moment, seems to have forgotten about his campaign pledge to create 1 million of them by the end of his second term.

Elsewhere around the web:

The American economy grew at a 2.5 percent annual rate in the spring quarter this year, writes Martin Crutsinger for the Associated Press, but analysts fear that the growth may slow to 2 percent during the current quarter. Consumers are expected to have spent less in the summer months, a reflection of minimal income increases. The sequester has also slowed government spending in defense and business investment.

Japanese Prime Minister Shinzo Abe was in New York yesterday, reports Isabel Reynolds for Bloomberg, where he urged Wall Street to invest in his country. “Buy my Abenomics,” Abe told traders. The slate of economic policies the prime minister is referring to include an artificially weak yen, which has dropped considerably over the last year. And it’s just the kind of thing that 60 U.S. senators want signees to a Trans-Pacific Partnership (TPP) trade deal to refrain from doing.

Speaking of the TPP, it’s not just currency concerns that have people riled up. Writes Shawn Donnan for the Financial Times:

US business is also pushing for strong rules to allow the free flow of data across borders and efforts to address what some see as the potential for unfair competition from state-owned enterprises in some TPP economies.

A new PricewaterhouseCoopers (PwC) report found that the wage gap between developed and emerging economies is set to contract significantly by 2030, says Katrina Bishop for CNBC. The report follows a survey earlier this week of large U.S. companies that reached similar conclusions.

Now how about some rad American-made trivia?

Oh my, is that a lot of Post-It notes.

For the next few days the Alliance for American Manufacturing (AAM) is presenting Huddle, Politico’s weekday morning newsletter that previews what’s happening every morning on Capitol Hill. Click here to sign up.

Happy Thursday, everyone!

-AAM

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