Label Wars: Made in China, Japan, or America

American bikini Asian girl

Do you care where your clothes were made? It seems like virtually everything you buy at the store now has the “made in China” label on it, but that’s not stopping consumers or retailers from dealing with such products. American companies deal with tons of sweat-shop workers in China and elsewhere for cheap labour, and it seems there is no end in sight. Even Japanese people, who currently have probably the most negative views of Chinese people in the world, still consume goods from China. So what’s the deal?

American-Made

James Huang at Bike Radar argues that it shouldn’t matter where a product was made. “Speaking strictly in terms of the product itself,” he says, “an item’s country of origin ultimately shouldn’t matter as much as whether the consumer still ends up with a high-quality item at a fair price.” This seems sensible, but many others just prefer to support their more local businesses.

The Daily Prep blog made a poll last year that asked Americans if they care whether a product is made in America vs. China. The poll gave multiple choices: 1) I prefer ‘Made in China,’ 2) I don’t care, 3) I mildly prefer ‘Made in US,’ and 4) I strongly prefer ‘Made in US.’ A total of 890 people voted, and 63% of them strongly preferred American-made goods. But as the Huffington Post mentions, “Made in America” products are often luxury goods.

To be all-American these days is a luxury proposition. A pair of domestic-made 501 Levi’s? Those cost a cool 178 bucks. In cowboy terms, that’s a boondoggle.

Mike Catherwood, 33, admits as much. The co-host on the radio advice show “Loveline” has been trying to buy only American-made products as part of a year-long experiment chronicled on his Domestic Journey blog.

“It’s definitely more expensive [to buy American-made products],” Catherwood said, speaking from his Cadillac while stuck in traffic on the way to the airport in Los Angeles. Since he started the experiment last January, his aim has been to draw more attention to American-made goodness.

But instead his experiment underscores the new truth about American-made products: The only people who can afford to buy them are the richest ones. “I am capable of it,” he acknowledged, “but I don’t think it’s feasible for everyone to do this.” [. . .]

Take the classic “Born in the USA” outfit: blue jeans, white T-shirt, work boots. The three items, all USA-made, cost $421: domestic-made Levi’s 501s ($178), American Apparel white T-shirt ($18) and classic Red Wing work boots ($225). The same outfit with imported goods is far cheaper: Brahma-brand work boots from Walmart ($33), a white Hanes T-shirt ($6) and Gap classic blue jeans ($60) add up to cost less than $100. [. . .]

Meanwhile, the Made in USA label has undergone a different kind of evolution. If it has traditionally been a symbol of Main Street pride, increasingly it’s being used as a chic status symbol for upscale retailers like J.Crew and Gilt Groupe, which have created special marketing around American-made goods, the New York Times reported.

So even if Americans like the “Made in the USA” label, considering the state of the economy, it’s not easy for people to consume them. But America isn’t the only top economy whose label is taking a hit.

Japan-Made

Russia Today wrote an article after the Great Eastern Japan Earthquake which talked about how the Fukushima Nuclear Power Plant incident caused what they called a “fatal blow” to the “Made in Japan” label. I don’t know if I would go that far, but obviously there were serious scares at the time, and it’s only getting worse as time goes on. Most recently, South Korea banned fish imports around the Fukushima area earlier this month.

But it gets even worse for Japan, and it’s not because outsiders are getting weary. In an article entitled “‘Made in Japan’ label matter less to shoppers,” NHK describes that Japanese consumers aren’t caring as much about their own goods:

Consumers are becoming less insistent that the food they buy is “made in Japan.” A recent survey shows the percentage of Japanese choosing more expensive domestic food products over imports is at a 5-year low. The government-affiliated Japan Finance COrporation surveyed 2,000 people in July who ranged in age from 20 to over 70.

About 51 percent said they would rather buy domestic food products instead of imports even if they cost more. That was down 7 percentage points from a previous survey 6 months earlier. About 32 percent, up 6.6 points, said that they would buy domestic items over imports if the price was roughly the same. Nearly 17 percent of people said they are not particular about buying domestic brands. That was nearly one point higher than before.

People involved in the survey say severe economic conditions have made consumers less picky about the “made in Japan” label. They say Japanese food producers need to think of new ways to attract consumers.

According to the Japan Times, the “Made in Japan” label has been declining well before the 2011 earthquake. In the decades after WWII, Japanese electronics were fantastically successful, and Japan produced everything from microwaves to boom-boxes.

Of course, the TV was also a major product that Japanese people consumed. But surprisingly, the TV industry seemed to take a hit after Japan changed form analog to digital TV in 2011. Overproduction resulted in oversupply, which led to a price reduction one article described as “The End of Japan’s TV Industry.”

The Japanese brands sold in Japan are assembled abroad from foreign-made components; and South Korea and Taiwan are beating all other competition in producing LCD display panels. South Korea represents 52.7% of the world’s output, and Taiwan represents 31%, whereas Japan represents only 15%. From the Japan Times:

“Whereas electronics were once a major earner of foreign exchange,” rues Shukan Diamond, “Japan has become a net importer,” i.e., with an overall trade deficit.

That turning point came in 2009, a year after the yen’s value soared in the wake of the “Lehman Shock.” Presently, out of 18 listed product sectors, only in five — storage batteries, dry-cell batteries, light bulbs, digital cameras and the almost defunct sector of video tape recorders — does Japan still maintain a clear edge.

The consequences of this shift are grave. Compared with 1985, when the consumer electronics manufacturing sector employed some 440,000 workers, by 2009 that figure had shrunk to 156,400. The total value of electronics exports, which peaked at ¥4.54 trillion in 1985, has shrunk to one-third that figure, and this impacts in turn on the nonconsumer sectors of Japan’s electronics industry, such as components, devices and industrial-use electronics.

But the fact that Japanese people care less now about products not being made in Japan extends beyond electronics. Here’s an interesting story from Nikkei Business about confectionary:

Take the “Market O Real Brownie” from South Korea, sold through convenience-store chains in Japan from last September. For 12 straight weeks, according to point of sales data, this American-style chocolate confection was the second-best selling item at 250 Tokyo convenience stores. Its pink, brown and white cardboard display stand and the individual packets carry only English and Korean. The virtual absence of Japanese POP (point of purchase) appears to have been no deterrent to sales.

The Japan Times also gives an explanation to the more recent decline in loyalty of Japanese products:

Why is this happening now? More than irradiation of the environment per se, perhaps trauma over the March 11 nuclear disaster may have served to dash the myth of Japan-made products being safe. And this, compounded by the flooding in Thailand, where many Japanese companies have factories, exposed the fragility of the product supply chain.

The disasters’ impact on Japanese consumer psychology will no doubt be studied for years to come. But the magazine concludes the success of foreign products during 2011 is part of a trend that’s not about to change anytime soon. “With the present declining loyalty toward ‘Made in Japan,’ what direction should Japanese companies take?” the magazine asks rhetorically. “One thing’s for sure: We will need to reexamine aspects of product manufacturing up to now, from the bottom up.”

China and Cheaply-Made

Considering how cheaply Chinese workers will work for, there’s no wonder that greedy American corporations will outsource their manufacturing to them. University of California-Irvine professor Peter Navarro made a documentary called “Death By China,” which was also the subject of an article he wrote for the Wall Street Journal last year. He describes some of the complications with the situation here:

Since China joined the World Trade Organization in 2001 and gained full access to American markets, the AFL-CIO claims that over 50,000 factories in America have disappeared along with more than 6 million manufacturing jobs. For these reasons, AFL-CIO President Richard Trumka in the film urges people who pick up a product Made in China to “think about your relative that just got laid off or the factory that just got shut down. Think about the school that is doing with less because the manufacturing base has gone and the tax base has left. Think about the lower income that you’re receiving now because we’re not making products, and we’re not buying our own products.” [. . .]

Given the chronic failure of America’s politicians to confront China on these issues, in my opinion, if more consumers would pause at the Made in China label, that would be all to the good. As Judith Samuelson suggests at the end of the film: “I think that at every level, people could boycott to some extent, and there would be a shot heard around the world.”

But what can I say? Huang was right on the money with this:

In an increasingly global economy where companies want to save money making things and consumers want to save money buying them, something’s got to give. While there can be pride in purchasing something manufactured closer to home, one often has to pay extra for the privilege. So far, history has demonstrated that the masses often times aren’t willing to do so.

Even after over 1,100 died when a clothing factory collapsed in Bangladesh several months ago, nothing changed. People around the world were appalled, and there were surveys that looked into people’s willingness to pay more for workers’ safety, but the results were less than encouraging:

The majority of shoppers are willing to pay a bit more for clothes to help improve conditions in Third World garment factories, but many of them still just want cheap fashion and don’t really care what it takes to produce it, according to a new global poll.

The Ipsos poll conducted for CTV News looked at the relationship between buying habits and ethical manufacturing of clothing by surveying more than 18,500 people in 16 countries, including Canada and the United States.

Nearly 70 per cent of respondents said they would be willing — to a degree — to pay a couple of extra dollars to improve worker conditions in countries where inspections and safety standards may not be up to par.

But more than 40 per cent strongly or somewhat agreed that they don’t really care what kind of conditions employees have to work in and just want “choice and low cost.” [. . .] [And] thirty-eight per cent said they currently boycott certain brands of clothing because of how the companies treat their workers.

According to the Canadian poll – which occurred over a period of two weeks a month after the collapse – Swedish people reported that they were the most willing to pay a bit more (i.e., a few more dollars) to improve worker conditions in places like Bangladesh. Canadians were soon behind, at 70% surveyed agreeing.

But many people are skeptical whether or not paying extra would indeed yield positive results for the workers. 37% of Canadians believed that the money would go to good use, compared to 19% of Norwegians. Perhaps this skepticism can explain the unwillingness of Japanese participants – only 40% of whom were willing to pay more.

In my mind, it’s probably not skepticism that can explain it, but indifference. But if you want to take the cynicism to the next level, we might assume that basically no one cares enough; it’s just that Japanese people are the most honest about it. CTV reports:

Poll results indicated that awareness hasn’t necessarily changed shopping habits.

Many companies have, since then, signed an accord to improve safety measures in factories abroad, but it seems that we, as consumers, expect and desire clothing prices to go down, not up.

The Bottom Line

It seems to me that people will report that they would pay more in order to get other benefits, but we have yet to see whether or not enough people boycott in the next few years; and it doesn’t seem likely. For example, boycotting China-made clothing would certainly make a huge difference, lowering profits for giant companies (e.g., Apple) and giving jobs to many Americans. But as U.S.-China Commission member Carolyn Bartholomew said in the Death by China documentary, “I personally do look at the labels of where things are made, but sometimes I go to buy things and it’s impossible to find something that isn’t made in China.”

I don’t believe that we – as a global market – have passed a point of return; I think the status quo will probably change. But I’m not at all sure how or when things will change, and I’m skeptical of anyone who says they can predict it. Everyone can make a prediction, and someone’s bound to get it right, but there are just so many factors that I’m not confident in anyone’s predictions. I just imagine that in 30 years, the big players in the world economy will look very different than today.

So for now, it looks like the world’s top three economies are in an interesting war of labels. Japanese people don’t care about their own labels; Americans do care but can’t afford them; and no one seems to actually – genuinely – like things that that are “Made from China,” but everyone likes cheap goods.

Therefore, we all actually love things that are made from China. We just don’t like the labels which remind us of it.

This entry was posted in Culture, Japan and tagged , , , , . Bookmark the permalink.

One Response to Label Wars: Made in China, Japan, or America

  1. Pingback: If Money was Easy

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>