Should You Buy American This Holiday?

I admit it: I do some things that don’t make financial sense. I choose mom-and-pop stores when I can, even if I have to pay a few dollars more for the same item. I buy from the small town where my family has a summer cottage, rather than seeking lower prices in a larger town only a few miles away. I buy from stores with nice atmospheres and friendly salespeople, even if I have to pay more than I would at warehouse stores. I buy fruit and vegetables at roadside stands. I drive farther and pay more to avoid buying gas from the two mega-companies that avoided taking responsibility for big oil spills.

Call me quirky.

Lately, several acquaintances have suggested adding to this list choosing products that may be more expensive but that are American-made over ones that are less expensive but made elsewhere. With the holidays upon us, now is a good time to ask ourselves whether it would help the American economy if we buy American products. It seems like an obvious choice: American workers need jobs, so if we can afford to do it, shouldn’t we support American workers by buying American? The answer is not as simple as it seems.

Some people prefer to buy American products because of concerns about the quality and safety of foreign-made products and because of reports of worker and environmental abuse among some foreign manufacturers. One of the reasons American products tend to cost more is that American manufacturers must abide by regulations that protect consumers, workers and the environment from danger and exploitation. Human nature being what it is, these regulations have been put in place to prevent owners from doing what many of them did before such regulations were imposed: increasing their profits at the expense of consumer and worker safety. A look back at early-20th-century industrial America looks no better than the factories of some unregulated countries today. Part of the premium we pay for American products is the assurance these regulations provide that the products are safe and that they are not produced by abusing labor or the environment.

But the question remains: Is it better for the American economy if we buy American? 

Let’s keep the argument on the small scale here: We’re talking about individual consumers’ decisions, not national trade policy. Steps the government may or may not take to protect American manufacturers and other businesses are “official” positions of the United States on trade, and they can have rapid and far-reaching consequences. For example, part of the deepening of the Great Depression of the 1930s is blamed on the Smoot-Hawley Tariff that was passed by Congress and President Hoover in 1930. The highest tariff in U.S. history, it was intended to protect American manufacturing by putting high import duties on more than 3,000 foreign items. Needless to say, foreign countries, particularly those in Europe, our primary trade partners at that time, retaliated immediately, effectively closing off foreign markets to American goods. If we weren’t going to buy Swiss watches, then they sure as heck weren’t going to buy American wheat and cars. Oops. So we’re just talking here about you and me, not the country’s official trade policy.

The argument in favor

If we support American jobs by buying American, one side of the argument goes, we’ll put more tax money in the U.S. Treasury and more money in local retailers’ pockets. Workers outside the country don’t pay U.S. taxes and don’t buy groceries from local stores, so supporting a job from overseas affects more than just that one job: it affects all the jobs that worker supports in spending his or her money, as well as the national debt when part of the worker’s money doesn’t go into the U.S. Treasury’s coffers in the form of taxes. 

Another argument is that it is in the U.S.’s best interests to retain our manufacturing ability, rather than focusing only on higher-skilled jobs and letting the manufacturing go to developing economies. Remembering the importance of manufacturing in World War II, we need to be sure that we have the capability and capacity to manufacture what we need, rather than relying on others. After all, self-sufficiency is part of the American ethos.

The argument against

The other side of the argument says it’s important to look beyond the immediate effects of your purchasing decision. If we buy foreign goods, we’ll be putting money in the pockets of more people who will also buy American goods. (In my view — and this is just my view — the trade deficit is a weak argument. About 30 percent of the deficit is oil, and much of the rest of the deficit has to do with currency valuations and our country’s high level of consumerism compared to that of other countries.) If we buy fewer, say, cars from Japan and Germany, they will have less money with which to buy American soybeans, wheat, computers, lumber, airplanes, pharmaceuticals, chemicals and graduate school educations. Sure, some Americans will benefit from our buying American, but others will suffer.

There’s also the argument that, assuming you’re not a multimillionaire, if you buy only American goods and you pay more for them, you’ll have less to spend and will be able to buy less stuff. We may be buying from American workers, but we’ll be buying less. Where do they get the market to make up the difference? From foreign markets. Where do the foreign markets get the money to buy American goods? From trade with the United States and everybody else.

Then there’s the fact that the effort to buy American goods alone can be full of trap doors. Sure, X is made in America, but the owner of the company is based in Japan, or it’s put together in the United States, but all its components are made in China, or … you get the picture.   

So what’s the answer?

National and international economics are complex organisms that most of us don’t understand at all and even the most clued-in of us understand only somewhat. Anyone who tells you the answer to our economic woes is as simple as “buy American” (or any other solution they can explain on a bumper sticker or a sound bite) might as well suggest you buy only things that start with the letter T. If you’re keen on buying American products, I say go ahead and do it, but do it for reasons — and there are many such reasons, not the least of which are quality, labor, and environmental issues — other than that you think you’re saving American jobs. Stillmadeinusa.com is a good, non partisan source for finding American-made products.) 

But if you see something this holiday that you think your Uncle Frank would just adore and it’s not made here, don’t worry that you’ll be stealing the turkey off some American worker’s table. You’ll be putting money in the pocket of someone who will turn around and buy an American product s/he can’t get wherever s/he is. 

As for me, I’m still going to buy from moms and pops and roadside stands and that funny little town in Wisconsin where my grandfather bought a cabin on a lake. I like to think it’s more likely that the money will turn around and go back into the local economy when mom and pop spend it, rather than going into the black hole of some overpaid CEO’s pocket. It might not make any sense, but it makes me feel good.