The Downside of “Made In China”

A few weeks ago my wife and I looked into buying a fire pit. We did some research and read reviews on websites like Amazon, Lowe’s, and Walmart, but eventually we got “reviewer fatigue” (pretty much all of them had lovers and haters) and just picked one that looked decent in our price range: The $79 Garden Treasures 35″ Black Steel Wood-Burning Fire Pit, made in China and sold at Lowe’s.

We brought it home, put it together, and immediately returned it.

The “steel” was already a little bent on one side of the base, and it was all fairly malleable. The whole unit felt light and flimsy. We might have expected something cheap-looking at a lower price range (I’m used to shoddy $20 bookshelves from Walmart), but not for eighty bucks! So we took it back – and that’s the story of another poor quality product made in China.

Now I have nothing against China. It’s popular to blame U.S. unemployment on “jobs getting shipped overseas,” but most economists say offshoring (and its overlapping relative, outsourcing) has net positive effects. Americans get to buy cheaper goods, which lets them spend money and increase demand for other things. Additionally, the foreign factory workers have better jobs than they had before. Free trade is awesome for everyone! “Buy American” makes about as much sense as “Buy Missouri” or “Buy St. Charles” – we buy stuff outside our county when we can get it better and cheaper elsewhere, but we don’t worry about losing jobs in our county from it, do we?

These theories run counter to common sense, and people like to write it off as economic hogwash – just look at the comments on one of John Stossel’s editorials about it. How can we afford to buy stuff if we don’t have jobs to pay for it? What if we get cheaper goods from China and use that extra money to buy more cheaper goods from China? Etc, etc.

Well, all I can say is, Look at the numbers! Here is one government estimate of offshored jobs per year since 1994:

And here is a graph of the unemployment rate:

The unemployment rate was 6.6% in 1994. Between 1994 and 2007, about two million jobs were offshored. But in May 2007 the unemployment rate was 4.4%. Somehow we lost two million jobs to other countries and the unemployment rate dropped by one-third! Not only did all those people apparently find other jobs, but so did millions of others.

Now, fast forward to the recession. Unemployment is certainly a lot higher now. But if you’re trying to blame today’s 8.2% unemployment on offshoring, you’re asking me to believe that 2 million jobs were lost to offshoring before 2007 and they didn’t even stop unemployment from going down, but only 500,000 or so jobs lost in the last few years made it double? That just doesn’t make sense; there are much larger forces involved. I think the evidence of the last 20 years shows, as counterintuitive as it may seem, that offshoring can coexist with both cheaper products and more jobs for Americans – just as economic theory predicts.

But maybe there’s still a downside: crappy products. I suppose before fire pits were made in China they cost more than the equivalent of today’s $79. The good news is they still make good ones, but of course they cost more. Free trade is supposed to give us the same thing for less money; a lot of these Chinese-manufactured products just seem like inferior things for less money, and it’s not that comforting to argue that these inferior things are even cheaper than they would be if they were made in America. Maybe the good ones are cheaper or easier to find than they used to be, too. But maybe it’s hard to tell when you have crappy products cluttering the options? I’m no expert on the international history of manufacturing quality – if you are, please educate me – but this is what it feels like from here.

I think the Garden Treasures fire pit is a modern marvel, the wonderful result of centuries of capitalism. I’m sure it means there are more people than ever before in the entire history of humanity who can afford something that resembles a fire pit. I don’t think that it’s killing our jobs or ruining our country.

But that doesn’t mean I have to buy it.