As the first truly industrialized nation we were always proud to say “made in America”. That is now a myth. Since just 2006 we have seen manufacturing in the US fall from 13.1% of total Gross Domestic product to 10.9% in 2022–a loss of 17% overall. At this pace “made in America” will mathematically disappear entirely from all manufactured goods by about 2055. Imagine, if you will, that the most industrialized nation on earth may not make any products within the next 32 years. At the same time the US service industry is growing at about a third of a percent per year. This is simply not enough to sustain employment growth, family incomes, compete with inflationary pressures and foreign manufacturing expansion. Again, imagine a US dependent on outside nations for EVERY critical product necessary to our standard of living and way of life. Then imagine what would happen if we faced foreign conflict with a nation (or maybe more) and were cut off from supplies of autos, appliances, computer chips, lithium batteries, etc. It’s not a pretty picture but it is a picture coming more into focus each day. So what’s the answer? We need to compete with the cost of foreign goods. If we can make a product here and sell it at a lower price (including the shipping cost) than the same or equivalent product made in South Korea–for example–we can compete. But if South Korea can make and ship a product here for a cost less than we can make it in America…well that scenario is ugly. And we all know that’s what’s happening more and more every day. Your clothing comes from Chine, Pakistan, Ecuador or somewhere else on foreign soil. Cars come from South Korea, Japan, China (electric vehicles), and other countries. So how do we keep costs in line? The answer is by reducing employee benefit plan costs–mainly medical plans. Benefits currently represent nearly 50% of an employee’s compensation. Historically benefits were only 10% to 15% of the total “package”. The fact is that benefit costs have risen much faster than wages. We are a population of expectations. We expect our employers to protect us from sickness bills, injuries, pay for our pregnancies, fund our retirements through Savings Plans and extend other newer “plans” like parking costs, paid medical leaves for other family members downtime…the list goes on. Unfortunately it is almost time to pay the piper. The piper is paid with American jobs as his currency. Next time we’ll talk about specific benefit cost issues and what might be “do-able”.
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