PICAYUNE —
The economic story of our generation has been greatly affected by the rise of China as a great industrial power.
With more than a billion educated people desperate for work, China has devastated American manufacturing. For the first time, the latest American generation is not as well off as their parents.
Globalism, powered by transportation and communication advances, has brought prosperity to much of the world. Unfortunately, it has come at the expense of America, which no longer enjoys the economic domination of the past.
Softening this terrible blow to manufacturing has been the availability of inexpensive goods from blue jeans to smart phones. But gadgets can’t replace jobs forever. Any strong company must be able to compete.
I have often commented that American manufacturing won’t come back until the Chinese get as fat and lazy as we are. I thought I would be retired by then.
But the pace of change is increasing at an ever increasing rate. What should have taken 30 years, takes 10 or five. In a word, American manufacturing is starting to come back. China is beginning to lose its overwhelming advantage.
When the great sucking sound of jobs leaving for China first began, Chinese labor cost less than 50 cents an hour. Today, it’s over three dollars an hour. When you factor in the three-fold higher productivity of American workers and the cost of transportation, the overwhelming advantage of manufacturing in China diminishes greatly.
I first read this a few months ago in the Wall Street Journal. The article predicted this crossover point would be reached in 2014 -two years away. A visit from Billy Neville in my office proved this manufacturing shift has already created ripples of change.
Many Northsiders may recall Billy as the longtime owner of The Rogue. Billy sold The Rogue awhile back but he is still involved in the clothing business as a “brand development specialist,” especially for made-in-America products.
This was slow going when Billy started five or six years ago and I recall his pessimism. But over the last year I noticed increasing optimism and this past week he was downright ebullient.
He started talking about an apparel manufacturer in Tylertown that was blowing and going. I stopped him. “What do you mean an apparel manufacturer in Tylertown? I thought they had all closed down and moved to China,” I asked in disbelief.
He dragged me to his car where he had samples of beautifully made jeans and denim shirts and pants. He then gave me the names and numbers of several American apparel manufacturers that are experiencing turnarounds. At long last, jobs are coming back to America.
So far, the big runs are still in China. No doubt about that. But the Chinese shops have started turning down smaller jobs because they are no long profitable. American apparel companies are stepping in to fill the gap.
I asked Ken Barber, manager of Brigade Manufacturing in Tylertown, if he is seeing the glimmers of a return of American manufacturing. His response was immediate: “Yes sir, I believe I do.”
Brigade, an apparel manufacturer with about 50 employees, has survived on government contracts which favor American manufacturers. Now he’s getting orders from private companies such as an American company that sells blue jeans over the Internet.
“Ten to 15 years ago, Chinese hourly wages were 20 cents,” Barber told me. “Now they’re over three dollars. With the shipping and the cost of gas, we’re competitive again. The Chinese don’t want these smaller jobs.”
Brigade is currently only using 35,000 square feet of their 120,000 square foot factory. They could easily ramp up. All they need are the orders.
John Smallwood is a jack of all trades, something that just goes with the territory in this day and age. He has a retail clothing store in the Hard Rock casino in Gulfport. He also has multiple wholesale clothing lines in five states. He says the made-in-America movement is “on fire.”
“I’m feeling it and seeing it more than I’ve ever known. The resurgence of American made products is going hand in hand with the resurgence of American manufacturing.”
Charles Johnson owns Chardan, an apparel manufacturer in Thomson, Ga., with 75 workers. “If you don’t manufacture anything, there is no middle class. That’s just my philosophy, so we’ve hung in there all these years.
“We’re much more competitive now. In the beginning, China would do anything. And the government would subsidize them to take the business. Now they don’t want to do the small runs.
“Take for example Orvis. They were in China in a big way. I made for them about 12 years ago and they left. They came back last year and our price was actually cheaper than China’s price. That was the first one that left and did come back.
“I predict it will be difficult to find people to make it here in this country because all these people are not going to go back into business and open up factories again. We’ve turned down so much work in the last six to eight months. In fact I just opened up a smaller shop in South Carolina with 25 or 30 people over there and we’re doing 2,000 pair a week.”
Absorbing the most populous nation in the world into the middle class has come at a huge cost to American manufacturing. As this titanic change diminishes, the future looks better than the recent past
Opinion
China’s rise has affected us
- Opinion
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