The Diminishing Effect of Buying Imports VS Investing in U.S. Made

Every dollar spent on American Manufacturing returns at least $1.89. If that dollar circulates and is used again on Made in USA products, the dollar continues to compound for the good of the community. The opposite can diminish a dollar offshore.

“While fair trade with friendly countries is important to businesses and consumers, this data shows that continued investment in domestic production will create millions of jobs and opportunity for growth.  A modern infrastructure upgrade is needed in the U.S. that integrates the coming technologies of the 4th industrial revolution, including 5G, AI, and IoT. That’s where massive resources should be used – with an emphasis on the return of the costs to local communities & manufacturers,” said Jason Blount, Chief Information Officer of Made in America.

Figure 2 summarizes how expenditures on imports are distributed between the local content that stays in this country, imported content that goes overseas to our major trade partners, and overall (last bar). For example, of all consumer expenditures in goods that are made in China, more than half stays in the United States as payment for local content. For the United States as a whole, the overall share of local content of imports in the U.S. is about 43%. So the .55 cents shown in the graphic above only applies to China.

Importance of Manufacturing in the U.S. Economy

Manufacturing is an essential component of gross domestic product, which was $2.33 trillion in 2018, and drove 11.6% of U.S. economic output, according to the Bureau of Economic Analysis. Manufactured goods comprise half of U.S. exports.

Manufacturing adds a lot of value to the power of the U.S. economy. Every dollar spent in manufacturing adds $1.89 in business growth in other supporting sectors, including retailing, transportation, and business services.

According to the Bureau of Labor Statistics, the United States has 12.85 million manufacturing jobs, which employs 8.5% of the workforce, and pays 12% more than other jobs. Yet, 89% of manufacturers are leaving jobs unfilled because they can’t find qualified applicants, according to a 2018 Deloitte Institute report. The skills gap could leave 2.4 million vacant between 2018 and 2028. That could cost the industry $454 billion in 2028.

Sources:

Federal Reserve – How Much Do We Spend on Imports? https://www.frbsf.org/economic-research/publications/economic-letter/2019/january/how-much-do-we-spend-on-imports/

Source: https://www.thebalance.com/u-s-manufacturing-what-it-is-statistics-and-outlook-3305575

What’s the Return of a Dollar When You Spend it on American Made?

Many Americans prefer to buy domestic products to benefit from higher quality and durability. What many don’t know, however, is that when they spend money on American made products, they’re contributing to a much greater cause.

Among the many reasons to buy local is the certainty that you’re helping your local economy. Whenever $1.00 is spent in manufacturing, another $1.82 is added into the economy.

The multiplier effect in manufacturing is higher than any other U.S. sector.

So, what is the multiplier effect? When you buy an American made product, it doesn’t just benefit the manufacturer. Because manufacturing has such a large supply chain and demand, its success can stimulate economic activity across a number of other essential sectors. When factories are producing more goods, they require more materials and services from suppliers, generating income and creating jobs in all sectors involved, such as transportation, communication, retail, construction, and so many others. This is called backward linkage.

For example, a car from your local dealership would have backward linkage to companies in the glass, steel and rubber industries. You can rest assured that your purchase is supporting jobs in these areas.

On the other hand, manufacturing also has a high forward linkage because of how many people are directly and indirectly employed within the sector. Forward linkage happens when manufacturing and supply chain employees spend their hard-earned money, putting it back into the local economy.

In other words, buying local recirculates more money into your local economy than buying from an absentee-owned business or foreign franchise. Thus, bringing more income and jobs into your area.

When consumers take the alternative route and spend money on foreign goods, they are not contributing to the multiplier effect–however, they are not throwing away all of their money as some people might think. A study by the Federal Reserve Bank of San Francisco found that, although Chinese-made products make up 2.7% of U.S. consumer spending, only 1.2% actually reflects the cost of the imported goods. On average, of every dollar spent on an item labeled “Made in China,” 55 cents go to services produced in the United States–but 45 cents is still taken out of U.S. circulation.

This is the diminishing effect of buying outsourced products. Every time you buy a product from China, an average of 45 cents is lost to Chinese manufacturers. Instead of creating money within the local economy, you take money out of local circulation and overseas.

So, the choice is clear if you care about our country. Buy local when possible to support domestic workers and help our economy grow stronger.

The power of change is in your pocket.

Smile at Made In America Org on Amazon by Donating at No Cost to you

Amazon Smiles is a way to give to your favorite charity without spending an extra penny. MadeinAmerica.org is now registered with Amazon Smiles. This is a way to at least have Amazon donate to a Made in America cause.

To sign up you have to go to smile.amazon.com this link will have you log in with your Amazon name and password. In the search bar, if will give you an opportunity to search for your charity of choice.

Please search “Madeinamerica” and you will see MadeinAmerica.org, Inc comes up to select.

Remember each time you order, double-check that you are signed in to smile.amazon.com before you order. If you stay logged in, it will show you who you support directly under your search bar.

So even if you’re unable to find a Made in USA product on Amazon, you can still support Made in America each time you shop on Amazon. Help the mission of spreading awareness about the importance of buying American Made.

Thank you so much & God Bless the USA 🇺🇸

Don Buckner
President & CEO
MadeInAmerica.org

We are a nonprofit focused on driving economic development and job growth by changing consumer behavior through education.

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Leesburg, FL. 34748, USA

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