Products of America

            Living in America, you might think the majority of the products that you purchase would be made in the United States, but the last presidential election indicated a different conclusion. Many of the speeches and debates centered around imported goods, especially those from China, and the effect on the economy.           

            In investigating the context on a national level, the Federal Reserve Bank of San Francisco in their FRBSF Economic Letter provides stats of the following data: Chinese goods account for 2.7% of U.S. PCE [Personal consumption expenditures], about one-quarter of the 11.5% foreign share. Of the 2.7% of U.S. consumer purchases going to goods labeled “Made in China,” only 1.2% actually represents China-produced content. If we take into account imported intermediate goods, about 13.9% of U.S. consumer spending is attributable to imports, including 1.9% imported from China. (Hale and Hobijn) 

The 2.7% figure is a surprising since the consumer encounters so many items from foreign countries, principally China, in the discount stores. Looking at the numbers of how many products are produced in China compared to America, the U.S.A looks pretty good. It would appear that the manufacturing goods of China really do not dramatically impact America, like we might expect. Before looking more into this, I suspected that the results from sampling small ticket items in a discounted store would show very different results. 

            Living in a small college town only gives you a few stores to choose from when shopping for essentials. There are a handful of major stores to shop at, like Wal-Mart, Big Lots, H.E.B., and Dollar Tree, just to name a few. I need a few things for a family gathering, so I went to Big Lots. It is a discount store, but compared to Walmart, the access is much easier and parking is convenient.

                        My expectations were proved correct by the fact that there were so few American items and so many from other countries. In relation to the small number of American-made products, I noticed that the store arrangement gave much more attention to imported goods.  For example, immediately on your left when entering the store there is a large area of imported pottery, imported art, and imported furniture often from the overflow of stores like Pier One, whose items are almost always from other counties. 

            I predicted when going into the store that items that were made in America were going to be a little higher in price and harder to find.  I also was assuming that most of the items in Big Lots were going to be made by a foreign country. However, I was hoping that I would find a few more American-made products than I did. Big Lots does carry a few bigger ticket items such as furniture, but I did not check those items because I would expect a store featuring furniture and appliances, (such as Sears), to have some USA assembly component on most of the items (similar to what I found with the pillows in Big Lots). 

            Actually, the United States of America makes or grows a variety of items that other countries cannot, will not, or cannot ship. The New York Times reported that about thirty years ago, the United States produced eighty percent of our country’s produce, now it is down to around sixty-five percent, according to the Manufacturers Alliance/ MAPI, an industry trade group.  The stamp Made in U.S.A. is most likely to be printed on heavy equipment such as circuits that go inside other products, toys, clothes, aircraft, missiles, and even space-related equipment. The Times continued 

                      The United States sold more than $200 billion worth of aircraft, missiles and 

                 space-related equipment in 2007, and $80 billion worth of  autos and auto parts. Deere,

                 best known for its bright green and yellow tractors, sold $16.5 billion worth of 

                 farming equipment last year, much of  it to the rest of the world.

                     Then there are energy products like gas turbines for power plants made by General 

                 Electric, computer chips from Intel and fighter jets from Lockheed Martin. Household 

                 names like GE, General Motors, International Business Machines, Boeing and 

                 Hewlett-Packard are among the largest manufacturers by revenue. (The New York Times)

Despite the fact that the United States seems to make more large equipment, the U.S.A still supplies much of the processed foods that our country consumes. We also make a good portion of products used for personal hygiene; for example, soap and shampoo, as well as cleaning supplies and prescription drugs (The New YorkTimes).            

                                                                                                                                                          

            While my purchase indicates that Big Lots carries many more foreign products than American-made, the overall picture presented by Hale and Hobijn does not present a threatening trade balance. This may be due to sectors other than retailing, such as raw materials, autos, or services.  With many bulk or large ticket items being produced within our borders, they appear to balance out the inexpensive products that are being made in China and other foreign countries. However, the job market for unskilled labor or low-tech products could definitely be impacted in the current sluggish economy.