Revitalizing American Manufacturing – and America's Middle Class

Walmart U.S. Manufacturing Summit in Orlando, Fla.

By Bill Simon, President & CEO, Walmart U.S.

August 22, 2013

Walmart U.S. Manufacturing Summit in Orlando, Fla.

Remarks as prepared for delivery at the Walmart U.S. Manufacturing Summit

“What a great meeting this has been. Again, I want to thank you all for being here and being a part of this.

“I want to share a few thoughts before we wrap up and get ready for a big day tomorrow. Today, you heard the economic case for American manufacturing, backed by hard data.

“You heard the view from the Administration. You heard from governors about their commitment, their workforces, and the opportunities in their states. You heard a few success stories that demonstrate this is working - proof that we can get new production up and running in the United States.

“So we've heard a lot of convincing evidence for revitalizing manufacturing in America.

“What I want to talk to you about are the reasons that are harder to put numbers on – the impact this work will have on our communities and on our country. You see, this is something we all care a great deal about. For me, not just as the CEO of Walmart U.S., but as an American and a global citizen.

The Need for Opportunity

“I truly believe that we are in a transformative period in history. The global economy has been flat-lining. Confidence is shaken. People are scared, uncertain about our future. Everyone is looking for an economic revival…longing for prosperity, security, and confidence. 

“We remember very clearly in the U.S. when a job at the local factory was a ticket to the middle class. Many people are wondering what's happening to opportunity in America …and to the American dream itself.

“This country was founded as a place of possibility. We have the right to life, liberty, and the pursuit of happiness. It's right there in the Declaration of Independence. We aren't guaranteed happiness, of course, but the right to pursue it. Here, you can stretch, you can grow, you can dream - and with hard work you can make a better life for yourself and your family.

“But what that requires is opportunity – simple things like a first job to learn some skills, someone to give you a chance to prove yourself, and a path forward.

“Today, America has an abundance of entry-level jobs and some high-end jobs. But the middle has eroded, leaving Americans with fewer opportunities to save money, send their children to college or build a nest egg for retirement. 

“Some people talk about it as an hourglass economy. I tend to think of it as a canyon being hollowed out between the two ends of the job market. It's harder to get to the middle class. And the harder it is to get to the middle class, the worse off America is. And because of our role in the global economy, when America is struggling, the rest of the world feels it too. 

“Now, almost everyone can agree that this is a problem - no matter your party or your ideology or your industry. Most people agree it can't go on like this. The question is what we do about it. 

Entry-Level Jobs

“Some people say the answer is to just raise up the entry-level jobs – to keep inflating wages at the bottom until an entry-level job pays as much as a professional job.

I don't believe that will work. It's a misunderstanding of how labor markets work and ignores that wages are driven by skills and the availability of the labor pool. It doesn't address the real issue – the lack of jobs in the middle. And it fails to understand the important role of entry-level jobs, including those in restaurants, hospitality, and retail. These jobs are a starting point... – a chance to build skills and begin taking on bigger jobs.

Just about everyone started out in an entry-level job. My first job was as a dishwasher in a restaurant for $2.10 an hour. I'm sure some of you started out stocking shelves or carrying bags. We all started somewhere. And by the way, these jobs are a source of opportunity today. For example, we're proud that, at Walmart, about 75% of our store management teams started as hourly associates.

Rebuild the Middle with Manufacturing

“So the solution isn't to get rid of these starting points. The solution is to fill in the middle with more good jobs. One of the best ways to do that is through a revitalization of American manufacturing. And that's why we're here today.

“America can't be a service economy; we have to make things. I can't think of a successful example in history of an economy built solely on services. Here's how I think about it.

“Let's say I work in a restaurant and you work at a movie theater. I pay to see a movie in your theater, and that gives you money to come eat dinner in my restaurant. And that can go on for a while. But if one day you decide to eat in…then I can't go to the movies…and the whole thing collapses. We're just staring at each other. And in some ways, that's what's happening right now.

“But if we make things, then we add value and change the equation. When a manufacturer makes something as basic as a light bulb, then the employees can afford a night out -- to eat at a restaurant and go see a movie....and make their way to the middle class.

“So we need to make things in America.

“But I want to be very clear: I'm not saying we should turn inward or move business away from other places. This is not about our country versus other countries. We have a global economy, and the factories abroad will keep humming along, driven in part by a rising middle class around the world. 

“But as you've heard today, the next generation of production will need to be built closer to its consumption. And that creates an opportunity for all of us.

“With our global role, as America does better, the rest of the world will too. Now, the new manufacturing jobs may look different from the old manufacturing jobs: many of them will be higher skill and higher wage jobs. Instead of a lineworker walking around to inspect the machines, you might have a supervisor monitoring her iPad. These will be good jobs – the jobs in the middle that we need.

“And, as you heard, the “multiplier effect” tells us that each new manufacturing job will lead to about three more jobs around it, creating even more opportunity in our communities.

Working Together to do More

“So Walmart has made a $50 billion commitment. But the retail industry together could drive so much more – ten times more. That's how we make a difference. We need all of us to look for these opportunities and to see the world through new eyes.

“Think about it – just today...we've announced commitments that will create more than 1,000 new jobs. 

“Together, we can help spark a revitalization of U.S. manufacturing, using new technology and new innovations to make production in the United States affordable and feasible. I want to say personally that Walmart is here to work with you. 

“We've appointed a senior team to lead this effort. And we've decided we will sign longer-term purchase agreements when it makes sense to give manufacturers more certainty. 

“As you go off to your meetings tomorrow, I hope you will know that we want to do everything we can to help bring these plans to life. You can always call me, call Duncan, call your buyer. We will work with you. The best part is that we can just do this. We can. We don't need to wait on anyone.

“Business can lead the way. In fact, in this country…in this economy…in this political climate - business must lead the way. 

“Some categories are easy to bring back, and we should go after them. There's low hanging fruit that we're already starting to pick. Others will be a stretch, but we should reach for those too.

Making Things is Part of Who We Are

“I tell my team all the time that our $50 billion commitment is our starting point. If we put our minds to it, there's no question to me that we can achieve it and exceed it. I want us to think bigger.

“Many experts believe that steel could be made here again. And if you can make steel, you can make bicycles and other items that might seem out of reach today. I want those big, iconic items to be made in America again.

“Let's bring the jobs back. Let's bring the opportunity back. Let's bring the pride back. 

“You see, we all identify with what we made in our hometowns. I'm from Hartford, Connecticut where we made Pratt & Whitney engines, and Colt firearms. And I guarantee you know what was made in your town.

“If you're from Milwaukee…it's Harleys. 

“If you're from Easton, Pennsylvania…it's Crayola.

“If you're from Huntley, Illinois... it's Weber Grills. 

“Dallas has Texas Instruments; Wichita, Kansas is proud to be the home of Coleman Coolers. 

“Making things is a part of who we are. And it's part of who we will be. And we can't afford to wait a minute longer. This challenging time for our country can be turned around, but we can't wait for the circumstances to be perfect. They never will be.

“We can't wait for someone else to ride in and save the day. We just have to choose to do it. And I know we will.

“In this room we have manufacturers, retail industry leaders, government officials. We have the capital, the expertise, and the ideas. And I believe we have the will. 

“You heard the economists…the numbers work. You heard from the governors…the states will do their part. You heard from other companies…this is already working for them.

“So now it's up to us. We are taking a stand.

“If we do this right, we're going to remember this as the time we came together…to roll up our sleeves…to get America back to work. That's what this summit is all about. That's why I'm so proud and grateful that you all are here.

“We're going to rebuild that class of American jobs in the middle that made this country great…and rebuild that path to a better life. 

“Thank you.”