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America’s Independence Means Reducing Foreign Dependence | Don Brunell
While much of today’s news deals with America’s decline, there is hope we can stimulate our economy, create manufacturing jobs and pay down our national debt by increasing our manufacturing and energy production.
While goods were once proudly “Made in America,” many of our manufacturing plants are shuttered. When we go to stores today, too often the labels say “Made in China.”
How do we turn this around? One company at a time.
In January 2013, Walmart announced it will buy an additional $50 billion in U.S. products over the next 10 years in an effort to grow our manufacturing and encourage the creation of U.S. jobs. In addition, Walmart has created a $10 million fund to stimulate U.S. manufacturing.
Walmart supplier Kent International, a New Jersey-based bicycle maker, announced in January that it will move its production from overseas to Clarendon, South Carolina. Kent will create 175 new jobs, with the goal of assembling 500,000 bicycles annually in the U.S. by 2016.
The focus is on creating American jobs.
Walmart, the world’s largest private employer, employs around 1.3 million people in the United States. Last year on Memorial Day (2013), the company announced it would offer a job to any honorably discharged veteran during the first year after they leave the service. One year later, Walmart reported it had hired more than 42,000 veterans, with a goal of hiring 100,000 veterans.
Walmart is not alone in its effort to create new U.S. manufacturing jobs. As U.S. manufacturers become more competitive in the global market, many companies are “reshoring” their production back to home turf.
According to economists at Euler Hermes North America, a leading provider of export and trade credit insurance, American manufacturers are expected to invest $500 billion in U.S. manufacturing this year.
A poll of 200 U.S.-based executives by The Boston Consulting Group found that 54 percent are considering or planning to “reshore” production, which is up from 37 percent in 2012. One of the most visible recent examples was Apple’s decision to build a new plant in Arizona instead of China, where the company has traditionally placed most of its manufacturing.
Why the turnaround?
Dan North, Chief Economist at Euler Hermes North America, says there are two main reasons: energy and workers.
The energy revolution was unforeseen even five years ago. Fracking and horizontal drilling have now opened up 100 years’ worth of natural gas reserves and massive new oil finds. As a result, the U.S. pays $3-$4 per mmbtu (the term commonly used by natural gas producers), while the rest of the world pays $10-15.
Thanks to fracking, America's imports of foreign oil fell to 36 percent in 2013, down from a high of 60 percent in 2006. That not only reduces our dependence on volatile – and often hostile – foreign oil producers, it creates American jobs. The American Petroleum Institute estimates that by 2024 domestic energy development could add nearly 1.4 million new jobs in various U.S. industries.
The second major factor leading to the reindustrialization of America is the people who work in manufacturing. U.S. workers are among the world’s most productive. They are a primary reason that Boeing, the world’s largest assembler of airplanes, invests in our state.
The bottom line is American manufacturing and energy development can propel our economy and job growth if politicians and government regulators allow it. The resulting tax revenues would help reverse the surging $17.5 trillion federal debt, giving us the opportunity to start paying off our nation’s credit card.
Energy independence, a revitalized economy and new manufacturing jobs in America – something to think about this Independence Day.
Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.