A Faded Label

Several years ago following the passing of my father, my mother gave me the task of going through his closet, first to see if there was anything I wanted to keep for myself, second to determine which clothes were suitable for donating to AmVets and finally, which were beyond any further use. As my father and I were of different sizes, and our tastes rarely coincided, going through his closet was emotionally difficult, but the destination of most of it's contents was already pre-determined. I kept only a couple of coats, and the rest went straight to charity. However, what was up in his closet was only PART of the job. In the basement were several large trunks that, judging by the layers of dust on them, and the dirt around them, had not been moved or opened for at least a decade.

When I opened the first trunk, I was greeted wtih the scents of mothballs and mustiness that one would expect to find in a trunk that hadn't been opened since it was packed decades earlier. The first trunk contained women's clothing that I recognized as having been worm by my mother when I was a child. When I opened the second trunk, in addition to the smells, I was greeted by the sight of my father's naval uniforms and as I went through them, I could see his career progression from his days as a third class petty officer to that of a Master Chief Petty Officer. I saw his blues and whites, but I also found another very different uniform in that trunk, that of a Sergeant in the United States Marine Corps. My father was never a Marine, but HIS father was and what I was looking at was my grandfather's uniform from World War II. He was highly decorated for service in the Pacific theatre, including Guadalcanal, Iwo Jima, and Okinawa, and had achieved the rank of Sergeant at the time of his discharge. I knew I was looking at a real piece of American history and I felt a true sense of pride in the contributions my grandfather, my father, and to a lesser extent, myself have made to the safety and security of this country.

That "pride" all but evaporated when I opened the next trunk and saw, neatly folded and pressed, my father's favorite slate blue leisure suit from the decade of disco. I knew this garment very well as my father wore it everywhere he couldn't wear jeans or chinos. Suddenly I was a child again riding in the back seat of our 1969 Pontiac Catalina staring at the back of that suit, complete with a brightly colored silk shirt with a large spread collar that covered the jacket's collar, breathing in the plumes of cigarette smoke that wafted back from the front seat as disco tunes blared on the radio. Although he had a few leisure suits of varying colors, that slate blue one was his favorite so I had ample opportunity to commit it to to memory.

Further exploration of the contents of trunk found those brightly colored silk shirts with the spread collars, some sportcoats with very wide lapels, and ties as wide as lobster bibs reminiscent of the ones I saw in a "Kojak" rerun on late night cable television. Just as I was about to give up and consign the whole lot to AmVets, I found the piece de rsistance, a faded pair of Levi's blue jeans. They were clearly worn, but far from worn out. They were very stiff and smelled of mothballs, but were otherwise in good condition. I unfolded them carefully, half expecting to see a garish bell bottomed leg, but was pleasantly surprised to see the same standard boot cut jean that was in my own closet. The only thing left was to check the size to make sure I could actually wear them and next to the size tag, was a faded label that said simply "Made in the U.S.A." Like the jeans themselves, the label was faded from the many washings these jeans had no doubt been subjected to. As previously stated, my father practically lived in his jeans which means they were frequently washed, so I figured that one more such washing would take out the mothball aroma and a dose of fabric softener would make them wearable once more.

True to form, my father's Levis jeans did not disappoint. In the space of two hours, they emerged from the dryer virtually indistinguishable from any other pair of Levis or other jeans in my closet with one major exception. They were the ONLY pair to have the "Made in America" label. All the other denim jeans in my closet, inlcuding my other Levis bore labels that said they were made in such exotic places as Malyasia, Singapore, or the Phillipines. How could that happen to this most uniquely American item of clothing, created to fill a need expressed by the rugged miners of the California Gold Rush by a jewish immigrant tailor named Levi Strauss. In true American entreprenurial spirit, he saw a need, and created a product to fill that need, and in the process added a new term to the American lexicon, and created garments that not only covered the miners, but very soon covered the cowboy, the farmer, and every child from the streets of Brooklyn, New York to the beaches of California. It is nothing less than a stain on our national honor that this most American of products is now made in predominately third-world countries.

Sadly this stain is not limited to Levis. Indeed, most of the major brands I remember from my childhood are either no longer in existence, or are no longer made in the USA. In 1941 when my grandfather shipped out to fight the Japanese, everything he and his fellow Marines had with them was made here in the USA. This included the clothes on their backs, and the gear in their packs, the guns and ammo they carried, and the vehicles they rode in or marched behind. Sadly, the troops today wear or carry many items, including UNIFORM items, that are not made in the USA. They carry Chinese made knives, shovels, forks, canteens, etc. Their sidearms are made by Baretta, and even their UNIFORMS have labels indicating foreign manufacture. How, in the space of half a century, did we go from being the predominant manufacturer of finished goods that were desired by the world, to being the world's largest consumer of imported products?

The answer to this question is complex, and there are four actors that share responsibility for the fact that the manufacturing sector of the American economy is on life support. They are the labor unions, the government, the lawyers; and last, but not least, Wall Street. These four actors, individually, and in combination of one or more with the other have destroyed the business of manufacturing finished goods in this country. To understand how, you have to understand the basics of how a business works. There have been libraries full of books on this subject but, to put it simply, a business has to make a PROFIT to survive, let alone thrive.

In a manufacturing business the goal is to produce a finished product made from raw material and to sell that product for more than it costs you to make it. Sounds simple enough, right? Well, what does it really COST to make a product. You have to factor in three things. They are the tools of manufacture, the raw materials needed for the product itself, and the cost of labor. The tools includes the overhead required including machinery, computers, desks, chairs, office space, vehicles, etc. The raw materials are the components of the product itself such as plastic, metal, glue, staples, etc. The labor includes not only the factory workers, but also the secretaries, janitors, security guards, etc. All these elements factor into the per unit cost of the item manufactured. If one or more of these elements increases, then the cost of the finished item also increases. Accordingly, the more a manufacturer has to expend to produce each item, the more he has to charge the consumer to maintain an acceptable profit margin. Contrary to the popular belief of those on the ideological left, profit is NOT a dirty word.

Enter the labor unions, the government, and the trial lawyers all of whom add artificial cost to the manufacturing process and consequently the finished product. Labor unions focus their efforts on the labor side by extorting companies to pay higher wages and generous benefits, regardless of market conditions and other economic factors; and, (when they don't get their way) throwing child-like tantrums and shutting down businesses with strikes, sick-outs, and other such tactics. Ordinarily in business, labor would be the most fungible part of the manufacturing process as one worker can be replaced with either another more reasonable worker. When the union gets involved, however, replacement of workers is no longer an option. After all, the manufacturers are under contract with the unions, and (at least in THIS regard) contracts must be honored. If a company tries to evade the contract and bring in non-union laborers, enter the trial lawyers and pile on more cost. The only other option for a manufacturer is to employ technology to reduce the number of workers needed and thereby reduce his labor costs.

Labor unions served a need when they were first created. Before the unions came into being there was no forty hour work week, minimum wage, child labor laws, maternity leave, etc. These are things today's workers take for granted and they wouldn't exist without the labor unions, but these are Marxist organizations, and with all their initial reforms now codified into federal and state law, they are now only concerned with their own self-preservation. They insure this with political alliances forged with huge campaign contributions using their members dues and pension funds. They have long since outlived their purpose and in extorting companies the way they have, they have caused more than a few of them to close their doors permanently, or in the alternative, to cease manufacturing their products, and to buy them from a foreign source to re-sell them to wholesalers and retailers to realize the needed profit. When the unions were shown to be in league with organized crime, and were themselves exposed as criminal or quasi-criminal organizations, they should have been disbanded once and for all. We would ALL be better off today, especially in Detroit, had that happened.

In addition to the unions themselves, enter the government and it's onerous burden of rules and regulations which range from how many gallons of water your toilet can flush, to the precise angle a computer keyboard should be positioned to avoid carpal tunnel syndrome. Whether federal or state, compliance with these regulations adds enormous costs to the manufacturing process which must then be passed on to the purchaser of the finished product. Additionally, the United States has the second HIGHEST corporate tax rate of the industrialized nations, second only to Japan. As a result of this, it is difficult (if not impossible) to attract new business from foreign manufacturers. Exceptions to this are found in the automobile industry which has set up manufacturing plants in southern non-union, right-to-work states. These companies employ thousands, but if government passes the "cardcheck" bill and the UAW is able to invade these organizations and coerce workers to join the union, these foreign auto makers will more likely than not close these plants and take their business back to their own domestic facilities. They do NOT want to fall victim to the same forces that have all but destroyed General/Government Motors, and Chrysler/Fiat.

If all that weren't enough to run a manufacturer out of business, enter the LAWYERS. With lawsuits for everything from product liability, worker's compensation, employment discrimination and sexual harassment, many of which are dubious at best and fraudulent at worst, businesses are forced to pay out thousands in legal fees or increased insurance premiums, all of which must be passed on to customer of the finished product. Notwithstanding the actual costs of legal actions, there is also the TIME element invested in attending meetings, depositions, and trials.

As a result of these "artificial" costs, the cost of manufacturing a single finished product can more than TRIPLE the actual COST of manufacturing such a product. This forces a manufacturer to sell his product at a minimum cost to a wholesaler, who then sells it at a markup to a retailer, who then sells it at a markup to the final consumer. This means a "widget" that costs about $2.50 in raw materials has to be sold wholesale for $15, and ends up on a store shelf at $24.99. However, if sitting on the shelf right next to it is another "widget" that appears identical in every way to the domestic one, but is made in China, for $9.99, which one is the consumer going to buy? It's a no-brainer and this results in a drastic reduction in demand for the higher priced domestically manufactured products. Decreasing sales mean diminishing profits, which sends a corporation's stock prices plummeting downward.

Enter the fourth villain, Wall Street, and more specifically, the corporate raider. In the 1980's the financial geniuses on Wall Street coined the term "maximizing shareholder value." This innocuous phrase basically translates into the hostile takeover of a business enterprise by a Wall Street raider like the fictional Gordon Gecko in the Oliver Stone movie "Wall Street." the raider, sometimes known as "Larry the Liquidator" makes a stock tender offer to shareholders to pay them more than the stock's current par value so he can acquire a minimum of fifty percent plus one. When he has a majority of the company's stock, the Liquidator will elect himself and his employees or agents to the corporations board of directors and, in short order, he will close all the facilities, liquidate the assets of the corporation, and pay remaining shareholders their share of the profits from these sales. When the corporation is liquidated, it will be dissolved and fade away into the pages of history. This is only possible because the labor unions, government, and lawyers have made it difficult, if not impossible, for a corporation to manufacture a product domestically, and remain a profitable enterprise. Without profit, there is no business and a corporation is worth more dead and in pieces than it would be alive and functioning.

Sadly for the employees of a corporation, the board of directors is only beholden to shareholders, not employees and their unions seem to fail to mention this to them when pushing for a strike. Unions have driven more than one company out of business in my lifetime. Names like Pan-Am and Eastern Airlines come to mind, as do the other brands from my childhood like Quasar and Admiral. Toys that once filled my toybox like Matchbox, Hot Wheels, G.I. Joe, Tonka, etc. are still in existence but are today made in China or some other third world country, like the Levis I purchase today.

In those carefree days of the 70's when I was in elementary school, I'd come home in the afternoon, do my homework, and then plop in front of the TV set and watch reruns of "Lost in Space," "Star Trek," "The Brady Bunch," and other classic shows. During these viewings there would come a commercial jingle that started out with the phrase "Look for the union label when you are buying a shirt, coat, or blouse." This commercial was intended to persuade viewers to purchase only garments made by union workers from the International Ladies Garment Worker's Union and not clothing made in sweat shops by non-union illegal immigrant workers. The tag line of the jingle was "it says we're able to make it in the USA." This line implied that these workers were able to make things here in the USA, and that by purchasing these garments, the workers would be able to realize their share of the American dream. Sadly, this union, like the "Made in the USA" label seems to have gone the way of the dinosaur and the Dodo Bird. I can't recall seeing that IGLWU label on anything outside of my mother's closet in many a year.

The American economy was built on a free market capitalist system of enterprise. but that economy must have a REAL foundation. The economy is rated and valued by our level of production. The letter "P" in the GDP stands for "product." The problem with our economy these days is there is very little "product" in the American economy. We no longer make things in this country. For the reasons set forth earlier, our corporate function has shifted from the manufacturing model, to the import, wholesale, and retail model. Instead of "product", the economy floats on a sea of paper, and even the paper isn't always real when you consider futures and options. An economy built on paper cannot be strong. It is an illusion, at best. This has resulted in our boom, bubble, and bust economic cycles and the recessions are becoming more frequent and longer lasting, especially when the government tries to "help."

Anyone who has started or run a business in this country knows that you only succeed in SPITE of government, not BECAUSE of it. Trying to start or grow a business with a democratically controlled government is like trying to plant a vegetable garden in wet CEMENT. It's not gonna grow without the fertile soil, water, and careful tending. Consequently, in a country rife with union tyranny, high taxes, onerous regulation, and a lawyer's feeding frenzy, who in their right mind would start a manufacturing business in this country? Without such new businesses, where are the unemployed blue-collar workers supposed to find jobs?

We need to become a nation that makes things once more if we are ever going to rebuild our economy with a solid foundation and thus end the boom, bubble, and bust cycles that have wreaked such havoc. This can't happen until we start graduating more scientists, archictects, engineers, etc and fewer lawyers, stockbrokers, and political scientists which is what our colleges and universities seem to turning out in record numbers these days. Even President Obama has repeatedly said we have to start making things in this country. But his idea for how to accomplish this goal is to put unions in charge of growing business in this country. That's like putting a mortician in charge of a hospital. It's a conflict of interest at the very least, and a prescription for economic DISASTER.

The few new businesses that have come to this country from abroad have ALL set up their operations in right-to-work states because they know that runaway labor costs destroy profits and lose share values. The workers that are employed by these companies receive a fair wage, enjoy good working conditions, and have good benefits all without having to fork over a percentage of their hard-earned paychecks to unions. Don't plant your seeds in concrete if you want a garden to grow, and don't put unions into the business if you want them to thrive.

If you look at the union's track record, most of the manufacturing unions, like the companies they worked for, are GONE. With the exception of the United Auto Worker's Union, the strongest remaining unions are SERVICE unions. The reason for this is simple, you can't outsource a "service" oriented job. The same holds true for public employees unions like the ones in California. There are exceptions to this, and you can hear them for yourself when you call up your credit card company or Delta Airlines looking for customer service. You'll likely find yourself talking to someone with a distinct Indian accent, because these companies have decided its cheaper to pay long distance charges for foreign phone workers than it is to pay union scale to American ones, and there go more jobs.

Looking at things as they stand today, you have to wonder if we're ever going to be able recapture our glory days of the 1950s and pre-Vietnam 1960s. In the years following the end of World War II, Americans led the world in the manufacture of finished goods, technology, innovation, and we enjoyed a market share of more than 80% of the world's automobile purchases. Given the current state of that industry in this country, and the improving quality and affordability of foreign competition, it's far from certain we could ever recapture that market share. One thing is for certain, however, and that is that until the "Made in the USA" label becomes something other than an exhibit in a museum, we're not going to be able to "make it in the USA."