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The Decreasing Popularity of Trade Deals

By Nate on September 30, 2016 | Comments: 0

An interesting article about trade and American politics appeared on Politico a bit ago. The piece points out, quite rightly, that 10, 20 years ago, it seemed as though many Americans didn’t think about trade deals. Now, however, a very different reality is emerging.

“… public fury over those same trade deals has become volcanic,” Politico reports.

“Precious few Americans had even heard of the Trans-Pacific Partnership a year ago. Now, opposition to the deal is driving populists on both the left and right, and has even been adopted by the non-populist Hillary Clinton, a politician who has supported many such deals throughout her career.”

Politico then adds that the 20-year old public acceptance of trade deals may have actually been—surprise—an illusion, “propped up by the support of business elites plus the appearance of professional unanimity among mainstream economists. Those who doubted were dismissed as throwback isolationists, or as deluded radicals like the protesters who tried to disrupt the World Trade Organization meetings in Seattle in 1999, or as union types who simply 'didn’t get it' (to use the favorite expression of the New Economy 1990s), anxious to protect their obsolete Rust Belt jobs.”

Well, trade haters are now getting their day in the sun, thanks to the 2008 American financial collapse. That collapse has made Americans more willing to discuss the more intricate issues that are tied with trade. Specifically class.

“Trade is a class issue,” Politico adds.

“The trade agreements we have entered into over the past few decades have consistently harmed some Americans (manufacturing workers) while just as consistently benefiting others (owners and professionals). As a result, and more than almost any other issue, trade brings together the wealthy elements of both parties: the free-market business types in the GOP and the successful professionals among the Democrats.”

The piece goes on to explain how trade deals, such as NAFTA and the modern TPP, have and are changing how democrats—specifically successful, professional democrats—talk about trade. Just think about how well Bernie Sanders’ anti-trade message was received during this year’s election cycle.

Read the entire article over at Politico. It’s worth the read.

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Take a Look at Each Candidate's Tax Plan

By Nate on September 26, 2016 | Comments: 0

OK. We’re in the home stretch of the 2016 presidential election.

Even though the American public is getting bombarded with news coverage about Hillary Clinton and Donald Trump during every newscast, we've yet to really hear them talk about the details of what could happen when either candidate becomes president.

Well, while we don't know everything Clinton or Trump will do in the White House, we now have a decent idea what each candidate's tax policy will entail.

This link will take you to PBS Newshour's candidate tax flow chart. It's filled with information about how each candidate plans to handle American's taxes come 2017. But if you don't have time to click that link right now, here's a brief explanation of what you'll eventually read:

"Hillary Clinton believes the wealthy are not paying a fair share and would like to increase their taxes and use the revenue for tax credits, student loan programs and other benefits for the middle and lower classes," PBS reports.

"Donald Trump instead proposes cutting rates for all Americans, but would especially cut tax rates for corporations and families passing wealth between generations."

If you want to interpret what PBS found for yourself, bookmark the above link ASAP.

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Hoping for a Real-Deal Labor Day

By Nate on September 5, 2016 | Comments: 0

Labor Day is here again.

If you are a fellow American worker, you know this year’s Labor Day holiday—heck, every year’s Labor Day holiday—is greatly needed.

While Labor Day is an excellent time to think about all the fun events the autumn and winter bring, it’s also a time to kick off your shoes, crack open a cold beverage of your choice and say, “dang. It’s nice to not be at work.”

But… be honest… How many of you are actually “off” work today? More and more Americans are, technically, “on the clock” 24 hours a day, 365 days a year. Whether you’re salaried or hourly, we’re all connected to our employers via our smartphones, email, etc.

So, while this holiday is much needed—seriously, America, never do away with it—it’s not honored in the way it used to be.

All of us at Nate’s American Made hope that in the near future, everyone can enjoy a real-deal Labor Day—one where everyone gets time off and gets paid for that time. Because until big box stores start to honor this national day of rest and relaxation, American workers truly aren’t winning.

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How America’s Trade Deficit is Killing Jobs

By Nate on July 14, 2016 | Comments: 0

But how? Well, it all has to do with the Great Recession.

According to Slate, the country’s low, near-zero interest rates make U.S. treasury purchases by trade partners unimpressive.

And, “in this sick, sad economic world of the zero lower bound, our central bankers at the Fed can't do much to boost the labor market, either; their monetary policy tool kit is all but tapped out (some countries have tried negative rates, but the effects haven't exactly inspired confidence yet),” Slate adds.

This all has allowed our country’s trade deficit to hurt American employment.

So, what can America do? Slate posits a not so crazy idea that wouldn’t start a tariff war: America needs to fix its economy. We all know that’s easier said than done, but the following suggestion is a start.

“Congress could pass a giant public works bill,” Slate reports. "This action could help the country catch up to its potential output—this would allow interest rates to begin rising back up to normal. If that happened, “the usual mechanisms that prevent trade deficits from causing unemployment would be restored.”

However, this fix has a catch that most of us won’t like. This wouldn’t “fix the distributional aspects of free trade—globalization, as we've organized it, would still benefit white-collar over blue-collar workers, since it tends to replace industrial jobs with service work,” Slate regretfully adds. “But at least we wouldn't have to accept slightly higher unemployment as part of the bargain for cheap TVs. And surely, a stimulus bill would be a simpler task for Washington than rejiggering the entire balance of world trade.”

So, that’s something to consider.

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People Aren’t Going Out to Eat—the U.S. Economy, Politics are to Blame

By Nate on June 28, 2016 | Comments: 0

Not as many Americans are going out to eat as they used to. On the surface, that statement doesn't sound so bad. But apparently, when people stop going out to eat, that’s a big, red flag for the health of the U.S. economy.

Here are the details.

The NPD Group, an industry research firm, recently discovered that restaurant sales are flat. Sales are not expected to rebound this year. And according to Mark Kalinowski, a Nomura analyst, “weak growth in the restaurant industry is a warning sign for the entire economy,” Slate reports.

Kalinowski adds that conversations he’s had with restaurant owners reveal that many owners think they may be losing customers because consumers are concerned about the upcoming U.S. presidential election. That's right. The U.S. presidential race is killing our spirits, and our appetites.

“People spend more when they feel confident about who the president is and the direction he or she is leading the country,” Kalinowski says. “Restaurant owners...hear a lot about how customers are worried about politics, and they don't really care for either presidential candidate. I think Americans’ feelings about those candidates are probably going to be pretty similar on election day to their feelings today.”

To attract more customers, chains, such as Wendy’s, Chipotle, etc., are offering a lot of discounts.

"The deals seem to be working," Slate adds. "While overall traffic to fast-food restaurants was flat, deal traffic increased 3 percent in the first quarter, according to NPD Group. Promotions accounted for more than 25 percent of fast-food restaurants' sales in the quarter."

And although these coupons are great for consumers, they are not great for the chains and could hurt profits. However, it looks like chains won’t be able to stop these promotions any time soon.

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Categories: US economy
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The Labor Market Data Conditions Index Doesn’t Look so Hot

By Nate on June 21, 2016 | Comments: 0

The Labor Market Data Conditions Index, an Index that’s been called “a more complete measurement” than the traditional unemployment rate, is looking a little…iffy.

According to The New York Times’, this Index shows “that labor market conditions have deteriorated with each passing month this year.” And here’s the most nerve-racking point: “In May, it fell to its lowest level in seven years.”

Now, The Times reports this could be because one of two reasons. One isn’t so bad and the other really isn’t good.

1. “It’s possible we’re not making progress because we’ve more or less arrived at our destination,” The Times reports. This is “what economists call full employment.”

This doesn’t mean that everyone has a job, but it does mean “that the reservoir of people seeking work has receded to a historically normal level.”

Evidence for this is the U.S.’s low unemployment rate.

2. The other reason? “Job growth is slowing because the economy is losing steam,” The Times reports.

“Fed officials, and other economists, have been grappling with the divergence between relatively weak reported economic growth and relatively strong job growth. Those at the Fed have largely taken the view that labor market data is more accurate, which has been true over time. But this time, some economists say, the broader economic data may be closer to the truth. ‘Of course, the bond market understands this perfectly clearly,’ Michael Darda, chief economist at MKM Partners, noted recently. Investors have continued to discount the Fed’s hints that it plans to raise rates this summer, and again later this year. They are betting the Fed will once again be forced to wait longer than it wishes.”

Now, before you lose it, The Times also notes that the reality is most likely somewhere in the middle. Basically: The labor is making progress, but at a slower pace…

Great.

And don’t forget: to get the most accurate information about the real unemployment, check the U-6 number here. It adds in the amount of people who are under-employed and who have left the work force.

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Surprise: Companies Aren’t Using H-1B Like They Should

By Nate on June 8, 2016 | Comments: 0

Remember H-1B? The high-skilled guest worker visa program that was revealed in California? The U.S. Department of Labor recently released some new research regarding the program.

According to the U.S. Department of Labor, the visa program is mostly being used by companies throughout California as a staffing agency-type solution. Translation: companies aren’t using the program like they should.

According to a recent Economic Policy Institute article, many companies that use the program make “permanent work insecure and routinely facilitate the outsourcing of good, skilled jobs to lower-wage labor markets.”

“In fiscal year 2015, three of the top five companies filing Labor Condition Applications for work in Silicon Valley—the first step in hiring a temporary foreign worker using an H-1B visa—were companies with business models that rely heavily on subcontracting and offshoring arrangements. The nine outsourcing companies that receive the largest numbers of H-1B visas nationally made up nearly one-fifth (18 percent) of Silicon Valley’s 138,594 requests for H-1B workers in fiscal year 2015. While the H-1B program allows employers to sponsor guestworkers to access citizenship, these companies rarely sponsor H-1B employees for lawful permanent residence in the United States.”

And the news just gets more irritating from there. To see the full write-up and the Institute’s helpful graph, click here.

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California’s ‘Made in America’ Label is Very Strict

By Nate on May 24, 2016 | Comments: 0

If you say something on a label, it better be true.

California has a strict standard when it comes to labeling products that are Made in America and that standard is even more strict than the FTC’s Made in America label. While we applaud California’s strict labeling, it’s also causing some problems—legal problems—for some retailers.

“The FTC requires that ‘all or virtually all’ of a product with a ‘Made in U.S.A.’ label be made in the United States,” Lexology reports. “The FTC, however, does not specify a maximum percentage of product content or value that may be derived from imported materials”—the Calif. label does.

According to a Calif. Code, a company can only use the Made in the U.S.A. label if the product is fully Made in the U.S.A. with American products, or if the following exceptions are made:

“First, a company may still use the ‘Made in U.S.A.’ label if imported materials constitute 5% or less of the final wholesale value of the manufactured product. Second, a company may still use the ‘Made in U.S.A.’ label if the manufacturer cannot produce or obtain the imported materials from a domestic source, and the imported materials constitute 10% or less of the final wholesale value of the manufactured product.”

As you can imagine, this label is causing a lot of issues for national retailers who sell in Calif. To avoid lawsuits, these retailers now need to use different labels to sell in Calif., and throughout the country.

One company that’s recently been caught up in this issue is J Brand, Inc.

“…a putative class action lawsuit was filed against J Brand, Inc., the maker of designer J Brand jeans and other clothing,” Lexology reports.

“The complaint alleges that the label for J Brand jeans states they are ‘Made in California, USA,’ but that more than 5% of the jeans consist of imported material. Specifically, the complaint alleges that the imported material used includes fabric, thread, buttons, subcomponents of the zipper assembly, and rivets.”

So, brands, take note: don’t mess with California… or the state’s incredibly forward-thinking California Business and Professions Code section 17533.7.

At Nate's, we do our best to source products that conform to the California standard, we do carry some products that don't meet this threshold and we'll note it in the product description. We like to support as many American jobs as possible through careful product selection.

What did you buy American today?

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U.S. Manufacturing is Always in Flux (Infographic)

By Nate on May 17, 2016 | Comments: 0

The manufacturing industry in the United States is always changing. One week, it’s great, and the next week, the news is, well... not so great. Not surprisingly, this month’s manufacturing news cycle is no different.

Just last week, a study from the UC Berkeley Center for Labor Research revealed that 1 in 3 Americans who work in the manufacturing sector are getting some form of public assistance.

“The UC Berkeley study found that low wages, and not inadequate hours, are the primary culprit for why so many manufacturing workers require public assistance to survive,” CNBC reports. "U.S. companies trying to save money have been hiring more and more workers from temp agencies because they can pay lower wages and offer limited benefits. In fact, the Detroit Chassis plant recently avoided a strike narrowly when it allowed temp workers to join the United Auto Workers union."

Then earlier this month, a Reuters article reported that “U.S. factory activity expanded at a more moderate pace in April due in part to a slowdown in new orders, but a rise in export orders to a near 1-1/2-year high and signs an inventory overhang drag was fading offered hope for the manufacturing sector.”

And let’s not forget the post we published a few months ago where we detailed some interesting U.S. manufacturing facts.

If you need a refresher on those not-so-bleak facts we previously published, take a look at the infographic below, created by MP Star Financial. Just click on the graphic to magnify the image.

Manufacturing Infographic

Obviously, the state of the American manufacturing industry is always in flux, but what industry isn’t? Rest assured, we’ll keep following the topic and reporting what we find back to you. Because we all care about the state of U.S. manufacturing.

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U.S. Clothing Companies Are Finding Success Manufacturing Goods in America

By Nate on May 11, 2016 | Comments: 0

While some companies still choose to move headquarters overseas, many clothing businesses have decided to keep their factories in America. This major shift began a few years ago.

According to Fast Company, Yogasmoga, an American yoga clothing company, produces its clothes at Griffin Manufacturing, a factory that is 60 miles south of Boston in Fall River, Massachusetts.

In the 19th century, Fall River was a major textile hub. But “over the last few decades, the majority of factories in these parts have been shuttered as manufacturing has moved offshore to places such as China and Vietnam where labor is cheaper,” Fast Company reports.

While the Mass. facility is filled with state-of-the-art machines, most of the garments the company sells are partially made by hand.

Rishi Bali, the company’s CEO, started the company three years ago. While he didn’t decide to manufacture his goods in the United States to help local, decaying factories—he made his decision because he couldn’t produce the clothing he wanted to overseas—he’s happy that his choice won’t contribute to the overseas manufacturing shift.

“Bali wanted to create his own technical fabrics, monitor quality, and have the flexibility to scale up his business as quickly as possible. He believes the only way he was able to accomplish these goals was to set up production in the U.S.,” Fast Company reports.

“And this decision is paying off: Last year, the company had a valuation of $74 million and opened its 12th store. ‘It can take 10 months to go from placing an order at a Chinese factory to receiving a shipment of clothes," Bali says. 'By using local factories, I'm able to meet demand much quicker.’”

Because the factory is close by, Bali also has the ability to easily convey how he wants his products created with Lee Almeida, the sewer of the Fall River factory. “Bali has discussed the specific qualities of each fabric with the factory manager who has, in turn, explained everything to the 40 workers, who all speak English,” Fast Company reports.

“Almeida is fully aware about how best to handle Yogasmoga fabrics in the sewing process, even though it is entirely new to her. She knows exactly how much tension to use as she stretches them out to sew a hem. And Bali is able to check in at the factory every month to ensure the quality of the final garments are up to snuff.”

Obviously, Bali isn’t the only company owner who has decided that keeping production in the U.S. is best for business. And although there has been a 90 percent decrease in apparel manufacturing in America since 1990 through 2015, that “exodus” has started to slow down.

“Part of this shift can be attributed to the clothing startups that have started moving back into American factories instead of instinctively going overseas,” Fast Company reports.

Some small companies also can benefit from starting production locally.

“While clothes cost less per unit to manufacture overseas, you need significant capital to even begin production,” Fast Company reports.

“This is what Sasha Koehn and Erik Schnakenberg discovered when they decided to launch the Los Angeles-based menswear label Buck Mason in 2014.”

The company owners' goal was to produce American-made basics: simple T-shirts, jeans, and button-downs. "We each put in $5,000 and found a local factory in L.A. to make our first run of T-shirts," Schnakenberg recalls.

"That entire budget would have been eaten up on our plane ticket to China. But the way we did it, we were able to design and sell our first products."

The founders of Petit Peony, Kate Bowen and Ashley Wayman, also had a similar realization when they began production a year and a half ago.

Koehn, Schnakenberg, Bowen, and Wayman also appreciated that producing locally is more "morally palatable," too.

To propel this trend, companies, such as Manufacture New York are helping companies along in the process. “Based in a factory in Brooklyn, the organization helps up-and-coming designers understand the production process and tap into a local supply chain,” Fast Company reports.

“Designers work alongside engineers, textile specialists, sewers, and other manufacturing experts to find ways to create products at reasonable prices. Manufacture New York has already launched more than 90 labels that are able to benefit from the scale that Winthrop is talking about.”

You can read the entire article about American manufacturing at Fast Company’s site.

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FROM OUR BLOG: Economic Issues & Impacts on America

The Decreasing Popularity of Trade Deals

An interesting article about trade and American politics appeared on Politico a bit ago. The piec...

- By Nate on September 30, 2016 | Comments: 0

Take a Look at Each Candidate's Tax Plan

OK. We’re in the home stretch of the 2016 presidential election.

Even though the America...

- By Nate on September 26, 2016 | Comments: 0

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