It's easy to cynical about Wal-Mart's “Made in the USA” push. The world's largest retailer — and the country's single biggest private employer — Wal-Mart has become a whipping boy for everything from squeezing out main street stores to paying wages so low that some of its employees get public assistance.
Well this year, Wal-Mart raised hourly pay to $9, and will move that to $10 in 2016. Department managers also got pay hikes. That's a reflection of the strengthening U.S. economy, and, just as important, a bid to improve the in-store experience, which at too many Wal-Marts can resemble an obstacle course as shoppers dodge shipping boxes and pallets littering the aisles.
The Great Recession hurt Wal-Mart because its bread-and-butter customer base got hit the worst. They shopped at dollar stores. And many well-heeled consumers say they avoid Wal-Mart altogether.
Looking at all that, you certainly could view the American-made push as another Wal-Mart publicity campaign, designed to air-brush its faults.
You would be wrong.
Wal-Mart held its second “Made in the USA” open call on July 7. Product makers took their innovative ideas to the retail behemoth's headquarters in Bentonville, Ark., They met with Wal-Mart buyers. Deals got done. And the next day, at the U.S. Manufacturing Summit, the manufacturers could learn even more about selling to Wal-Mart, and talk to economic development officials from 30 states, eager for new jobs.
U.S. factory jobs are a key part of Wal-Mart's stated goal of spending an additional $250 billion on U.S.-made products over the next decade. The retailer launched the effort two years ago.
This simply cannot be a public relations gimmick. Lured by Wal-Mart, manufacturers are bringing work back from China and other low-wage countries, and investing millions of dollars in U.S. factories. Wal-Mart is even holding events to help build supply chains — all the makers of springs and widgets that followed the work to China.
Moving factories, relocating machinery or buying new technology, employing and training workers — these are long-term business decisions. Say Wal-Mart did pull the rug out, and stop supporting this effort? After all the talk — even website videos showing American workers proudly talking about their new jobs, courtesy of Wal-Mart — if Wal-Mart walked away from its Made in the USA pledge, that would give Wal-Mart a giant black eye. The anti-Wal-Mart cynics would win.
The bottom line is that, yes, U.S. manufacturing is much more competitive internationally these days. Plants are becoming more automated. For example, Michigan-based toothbrush maker Ranir LLC is spending $3 million to set up an automated assembly system to make 5 million power toothbrush heads in the United States.
And America now has cheap energy, thanks to the shale oil revolution. And when it comes to consumer goods, more than one Wal-Mart official pointed out that consumers value having a choice to buy American-made, if the item is reasonably priced.
The pendulum of supply chain management had swung to far-flung suppliers around the world. Well, now it's swinging back. With its massive economic clout, Wal-Mart will drive much of the reshoring. And of course, some of those factory paychecks will be spent at Wal-Mart.
Even more important is that Wal-Mart is setting a good example. Manufacturing really is a backbone of our economy, spinning off other jobs in the service sector. A mega-presence talking it up helps get the word out.
It's good to see Wal-Mart — often blamed for a vicious loop of lower prices and lost American jobs — get its priorities right.
