President Obama, in his State of the Union address, told Americans that manufacturing in the United States is back. The president is right to applaud job creation in manufacturing. But both elected leaders and the public should be wary of one company in particular falsely taking credit for this “manufacturing renaissance”: Wal-Mart.
Two years ago, Wal-Mart launched the U.S. Manufacturing Initiative, a pledge to create 1 million new jobs over the next 10 years through buying “U.S.-made goods.” But Wal-Mart has done very little to improve American jobs. In fact, it continues to harm our nation’s job market.
Wal-Mart is the largest buyer of consumer goods in the world and is the nation’s largest importer of goods. Wal-Mart’s public relations campaign about U.S. manufacturing aims to distract Americans from two core aspects of Wal-Mart’s business model.
First, as the country’s largest private sector employer, the company has played a leading role in driving down service-sector wages for millions of working families. The majority of workers in Wal-Mart stores are paid less than $25,000 a year.
Second, the company is hoping Americans will forget that Wal-Mart has played a leading role in the offshoring of American jobs.
Let’s take a closer look at the numbers: Obama says more than 780,000 manufacturing jobs have been created since February 2010. Yet, American workers have lost an estimated 3.2 million jobs, most of which were in manufacturing, since 2001 due to trade imbalances with China alone. Between 2011 and 2013, 500,000 jobs alone were eliminated or displaced, according to a recent report by the Economic Policy Institute. This job loss — much in advanced technology manufacturing, meaning parts for electronics — created a gap in job creation in the manufacturing sector. Manufacturers need to hire at a much higher rate to even approach closing the gap.
Wal-Mart has not made public any real numbers regarding its impact on U.S. manufacturing job creation. The suppliers that are part of the Wal-Mart initiative have created only about 2,000 U.S. jobs in the last two years, according to anecdotal evidence on Wal-Mart’s website.
Sadly, even Wal-Mart’s poster child for its U.S. manufacturing initiative, Element Electronics, seems to be little more than window dressing. Wal-Mart sells Element televisions marketed as “American-assembled” at Wal-Mart stores nationwide, yet as The Wall Street Journal reported last year, the TVs arrive in the U.S. nearly completely assembled from China in boxes labeled “Assembled in the U.S.A.” Workers in South Carolina check for defects, install a memory card and put the TVs back in the boxes, to be shipped to Wal-Mart. This is not the kind of high-skill, high-investment manufacturing that will help rebuild the American middle class.
Wal-Mart says it wants to be part of the solution of rebuilding our manufacturing sector. But to walk the walk, Wal-Mart needs to sell a much higher percentage of goods in its stores that are actually manufactured in the U.S., thus helping to stop the offshoring of jobs and creating real, quality manufacturing jobs in America. And if Wal-Mart wants to really make a difference for American families, the company should listen to its 1.3 million associates when they speak out for “$15 and full time” — an income a person can actually live on.
Wal-Mart is right about one thing. The company is so big that its choices move our economy. When it outsources, manufacturing jobs disappear. When it pays poverty-level wages, other employers follow suit. If it chooses to really support raising wages and rebuilding American manufacturing, it could make a real difference.
As Obama moves forward in his efforts to rebuild American manufacturing and create good jobs, he and our country need something more than PR gestures and poverty wages from our nation’s largest importer and largest employer.
Silvers is director of policy and special counsel for the AFL-CIO.