American manufacturing is growing slightly, while China has become more expensive for employers.
People rush into Walmart after the doors open on July 28, 2013 in Williston, North Dakota. (Photo by Andrew Burton/Getty Images)
When Walmart holds a shareholder meeting, it features celebrity guests like Tom Cruise and Hugh Jackman. And when the retail colossus hosts a summit on U.S. manufacturing, it includes a surprise musical performance by country music singer Ronnie Dunn.
On Thursday, Walmart—the world’s third largest employer, behind the U.S. military and the Chinese Army—kicked off a two-day U.S. Manufacturing Summit in Orlando, Florida. The speakers included U.S. Commerce Secretary Penny Pritzker, General Electric CEO Jeff Immelt, CNBC’s Maria Bartiromo and the governors of eight states. Their shared mission, according to Walmart U.S. CEO Bill Simon, was to figure out how to “drive investment in American manufacturing.”
“We are entering a new era of opportunity to boost American manufacturing,” said Pritzker in her address to the summit. She noted that American manufacturers have become more productive since the end of the recession, while manufacturing in China is becoming more expensive for employers.
Productivity—or output per hour—in the manufacturing sector has increased by 2.2% over the past year alone, according to the Bureau of Labor Statistics. At the same time, average wages have stagnated or even shrunk, while labor unrest and rising wages in China have made labor there more expensive. As that country’s cost advantage shrinks, the United States has once again begun to look like an attractive site for building and maintaining factories. Manufacturing jobs are trickling back into the country, including jobs from corporate giants such as Apple.
The stated purpose of the Walmart U.S. Manufacturing Summit was to bring together business leaders and government officials so they could figure out how to maintain that trend. But the event also functioned as a public relations opportunity for Walmart, which ran a promotional video touting the $50 billion in America-made products they intend to buy over the next decade.
The summit also served as a forum for various speakers to promote business-friendly government policies. Richard Fisher, president and CEO of the Dallas Federal Reserve, exhorted policymakers to “[throw] out old, unproductive fiscal and regulatory policies,” while Florida Governor Rick Scott’s welcome address attributed the state’s rising employment to his policy of “cutting taxes [and] reducing regulations.”
Pritzker emphasized the Obama administration’s commitment to making American workers more attractive hires in a “demand-driven” labor market.
“The Commerce Department will continue to play a lead role in supporting the growth of manufacturing,” she said. She applauded the assembled employers for providing “good-paying jobs,” and suggested that labor strife had cooled off in the United States over time.
“The relationship between management and labor has improved dramatically,” she said during a panel discussion.
On the same day that the summit began, nine fired Walmart employees and one current employee were arrested during an act of civil disobedience in front of the company’s Washington D.C. office. The protest was part of a campaign by the group OUR Walmart to try to improve what members say are abysmal working conditions at Walmart stores and warehouses.