Reviving U.S. Manufacturing Key to Rebuilding the Middle Class

The Huffington Post

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

August 22, 2013

The Huffington Post

Bill Simon’s blog post appeared in The Huffington Post

Most of the iconic products we enjoy and use in our daily lives - everything from bikes to jeans to children's toys - used to be produced right here in the U.S. The workers who built those goods also built the middle class and made this country an economic powerhouse.

But as economic conditions pushed manufacturing overseas, the middle class eroded and many good jobs vanished, leaving Americans with fewer opportunities to save money, send their children to college or build a nest egg for retirement.

Today, economic conditions are changing once again, and many experts agree that the U.S. manufacturing sector is poised for a comeback. So, how can we seize this opportunity to revive U.S. manufacturing and begin rebuilding the middle class? That's the big question we are exploring in Orlando today as Walmart and the National Retail Federation host a summit of more than 1,500 people representing manufacturers, retailers, the administration and state governments.

Solving this challenge is crucial to the future of our economy.

One of the biggest obstacles facing Americans today is a lack of opportunity and social mobility. While we have entry-level and high-end jobs, we have lost the jobs in the middle that helped each generation of Americans do better than the one before it. Some call this an "hourglass economy"; I tend to think of it as a canyon being hollowed out between the two ends of the job market.

While we can all agree this is a problem, there are different opinions on how we can fill in that canyon. Some believe the solution is to mandate higher wages for entry-level jobs, so that service-sector positions pay like the manufacturing jobs of the past.

We saw this happen recently in Washington, D.C., where city leaders passed a bill to mandate an arbitrary minimum wage for large retailers such as Walmart. We've also seen this in the restaurant industry where there are proposals to require pay of $15 per hour - more than double the federal minimum wage.

This approach is not the way to strengthen our middle class. Not only is it based on a fundamental misunderstanding of labor markets, it doesn't address the real issue - the lack of good jobs in the middle. And it fails to understand the role of entry-level jobs, including those in restaurants, hospitality and retail, as a starting point - a chance to build skills and begin taking on bigger jobs.

Retail jobs are a source of opportunity today. At Walmart, we promote about 160,000 people every year, and about 75 percent of our store management teams started as hourly associates.

The solution isn't to arbitrarily mandate how much these starting points pay. The solution is to fill the middle with more good jobs.

That's why Walmart has pledged to buy an additional $50 billion in American-made products over the next 10 years. This is a good business decision for us, but it's also good for the communities we serve and the future of our nation's economy.

But our pledge is only a beginning. Jump-starting the manufacturing industry and rebuilding the middle class requires a national effort by companies, industry leaders, lawmakers and others.

We understand there will be questions about Walmart's participation in this effort, fueled by the myth that our shelves are filled with foreign products. In fact, according to data from our suppliers, items that are made here, sourced here, or grown here account for about two-thirds of what we spend to buy products at Walmart U.S.

I urge us all to focus on the goals we have in common. We can disagree on many things, but we all agree that Americans need good middle-class jobs and that we have a golden opportunity right now to revitalize our manufacturing industry.

Let's seize that opportunity by coming together and working to rebuild the middle class opportunities that made our country great.