Proposal Regarding Product Purchases in the USA - Literature review Example

Business: Proposal Regarding Product Purchases in USA and Presentation of Their Consequences in the United s Senior Executive Management From: Concerned Party Date: 6th May 2014 Subject: Business proposal regarding product purchases in USA and presentation of their consequences in the United States. Table Of Contents Abstract 4 Introduction 5 Consequences 6 Opponents’ Views 8 Conclusion 9 References 11 Abstract This proposal seeks to present some of the common consequences of products purchased in USA by the companies in the United States to the American economy. In simple terms, the proposal will look at the consequences of purchasing products specifically made in the United States. In doing the proposal, the proposal will talk about products made in both the USA and outside the US markets and some of the consequences, they bring in the United States economy. Introduction Most American manufacturing jobs are currently reducing the unemployment rates and the expansion of the tax base. In the past years, America seems to have lost approximately $2 trillion in trade deficits cumulatively with China alone. In case the $2 trillion of the lost production would have taken place in the US, then based on the conservative tax rates percentages of 30, it would have created national revenue of $600 billion and many jobs in America (Uke, 2012). The huge American deficit is because of the high rates of importation as compared to the exporting rates. This aspect tends to stifle the potential growth of the economy. Different economists have estimated that United States national trade deficit have played a key role in reducing the American trade deficits and supporting higher tax base (Lampeer, 2007).In the year 2000, the United States of America had an average of 17 million workers working in manufacturing companies. However, by the year 2013, only 12 million Americans were working in manufacturing companies. This is because the nation has concentrated on importation of products and forgoing ‘Made in America’ products. Alternatively, with the U.S foregoing its America made products, there are aspects of imbalances in the nation. By the year 2011, the America’s deficit with Chinese nation was at least 28 times higher than how it was during the 1990. According to America’s economists, the nation is currently losing top jobs to China yearly. This is because of the continuous dependence of the products made outside the U.S. The problem is evidence when it was reported that the United States spent almost 102 billion dollars on the importation of Chinese products in the American markets. By the year 2011, the nation spent almost 399 billion dollars in the importation of Chinese products. Therefore, this proposal seeks on the need of purchasing products made in the nation. Most America citizens never seem to care whether they should only purchase good and products made in America (Uke, 2012). In as much as they do not really care of the types of products they use and the country of manufacture, most of these consumers in the United States represent America’s majority most of which are in the middle class levels. In America, the middle class makes up most of the United States economy (Lampeer, 2007). Therefore, they should be concerned with most of the America’s economic issues since any economic issues in the United States, directly affects them. However, with most American citizens taking greater concern in the present economic situation, things are currently changing. The reason for the change in gears is because most middle class citizens in the United States are losing their job opportunities to people from other countries. Alternatively, citizens from different countries tend to earn even higher as compared to the American citizens (Lampeer, 2007). Consequences Generally, this proposal proposes various problems and consequences to the American economy and most companies in the United States regarding their purchases of American made products (Gary, 2001). The reason as to why purchasing American made products remains important is the fact that it might create a ripple effect especially to the economy of the United States. An example of this is when the U.S manufacturers spend only $1 in its economic activities; it has to spend another $1.40 in the economic activity it has created. Therefore, just think if the manufacturers in the United States spend $1 in the economic activities and of that, $1.40 was spent in purchasing products, which were made in U.S, therefore, it is quite evident that the Made in America ripples (Rockoff, 2012). Most American companies which manufacture goods oversees tend to use different arguments especially when it comes to answering the question as to why the prefer China markets and not the United States markets (Rockoff, 2012). The Made in America ripple effect might be the best answer to some of these arguments. Another example is the Apple situation in China whereas the American company employs 500,000 Americans in a bid to manufacture iPhones and iPads in the country instead of using the Chinese labor. In doing this, the American country in China will be able to sell the products at a higher price and more products because of the ripple effect. ‘Made in America’ products generally creates the ripple effect in the way the money spreads in the American economy. The money also tends to circulate back and forth to the manufacturing company(Uke, 2012). Every American in the middle class tends to suffer because of job losses because of the decline in the buying power. In most cases, it affects the closure of America companies. The decline in the buying power results in job losses and in the long term, it may affect the ongoing deprivation cycle. Consequently, it may lead to mass poverty. This proposal seeks to address some of these issues affecting the American society. This proposal therefore suggests that Americans should purchase goods made in America. As soon as Americans start buying the ‘Made in America’ products, there would be more demand on the goods. Therefore, the rise in demand would ensure the development of more plants, companies and business franchise in the United States (Rockoff, 2012). The manufactures will most definitely benefit from these developments. Alternatively, there will be higher paying fields increase because of some these developments. In short, the American economy will most definitely be at its best. Rise in profits in most American businesses because of the localization aspect will be healthy to the citizens of the nation. However, this vision will not be possible unless the government steps in and address the situation. In this case, the government has the responsibility of addressing its citizens on the need of purchasing products that are ‘Made from America’ (Rockoff, 2012). Opponents’ Views To prove that this proposal should be implemented, there will be a dispute of any opposing views. Opponents of this proposal would claim that the American country is becoming selfish. The opponents believe that some of the multinational corporations provide productivities of high values, advanced technology and provision of new jobs. In saying this, the opponents of this strategy would claim that the combination of some of these reasons might enhance poor societies economic growth greatly (Rockoff, 2012).The dependencies theorists have in the past found out those investments, which are multinational tend to be productive as compared to the latter. The multinational investments create more job opportunities, pushes some of the developing countries further in order to produce goods for export instead of producing goods to be used locally for food and local consumption. Alternatively, another common issue exist in the poor working conditions which tend to exist because businesses and companies are in need of cutting down costs. On the other hand, the multinational investments do not necessarily benefit the poor nations nor the developed countries. Actually, they make some of the poor societies poorer by ensuring they remain dependent to the U.S nation (Gary, 2001). Secondly, opponents claim that the multinational organizations tend to care more on some of their former workers welfare. In saying this, they claim that multinational investment usually relocate their former workers and by doing so, they tend to take care for them. This means that their former employees will still be under a certain amount of monthly earnings. Lastly, the opponents of this move claim that, not purchasing products ‘Made in America has no effect to them (Gary, 2001). It is quite true that failure to purchase ‘Made in America’ products have no effect on them. Instead, the opponents of this proposal might claim that the aspect of multinational investments will be like balancing acts of trade among the United States of America and various global nations. In justifying this aspect, the opponents of this proposal will claim that selling products abroad and purchasing goods from the over-seas nations would create a balance between the nations something which is important. This aspect also promotes global economy and the development of the developing nations. In a situation where the economy is doing badly, then everybody will end up suffering. More job opportunities will be created as a result of multinational investment (Rockoff, 2012). In as much as these options are frank and open, Americans have the responsibility of making the first step in saving their own economy. Conclusion The manufacturing companies have the responsibility of leading the way of the recovery process (Rockoff, 2012). To help in the achievement of an economy which is sustainable, the entire nation must also come up together to oversee the situation. A consumer-led commitment towards buying of ‘Made in America’ products will be vital in supporting the U.S economy. Therefore, as the proposal claims, it is always important for the United States residents to buy their own products for the betterment of the America’s economy (Rockoff, 2012).Huge American deficits in the previous years are because of the high rates of importation the country has engaged in as compared to the exporting rates. This aspect negatively affects the nation in the past years therefore, there is need to change the importation and the exportation strategies in the nation. One of the common consequences of extensive importation of products is the aspect of stifling the potential growth of the economy. Different economists have estimated that United States national trade deficit have played a key role in reducing the American trade deficits and supporting higher tax base (Lampeer, 2007). In as much as the opponents of the ‘Made in America’ believe that some of the multinational corporations provide productivities of high values, advanced technology and provision of new jobs as compared to focusing only in the America products and services, more work need to be done locally before going international (Lampeer, 2007). The opponents of this strategy would claim that the combination of some of these reasons might enhance poor societies economic growth greatly therefore the need for international investments. Most of these ideas are true. However, developing local economy would most definitely come in handy. Charity begins at home therefore, building the American economy before going in the international markets should remain a key aspect. This proposal strongly disputes some of the opponent’s views regarding the aspect of purchasing ‘Made in America’ products. In simple terms, this type of proposal has more benefits to the American economy more than to any other nation an aspect that is important (Gary, 2001). Therefore, this proposal suggests that Americans should purchase goods made in America because as soon as the American people start purchasing ‘Made in America’ or rather their own made products, there would be more demand on the goods (Gary, 2001). As a result, the aspect would lead to rise in demand, which would then ensure the development of the United States economy. Implementation of this proposal would be important especially to the middle class American citizens, which tend to be affected by the American economy system. The proposal would also be important for most organizations in the United States. If implemented, the United States has a high chance of improving its economy by almost half of its current state. References Gary, S. P., & Ulasewicz, C. (2001). Made in America: The business of apparel and sewn products manufacturing. Sebastopol, CA: GarmentoSpeak. Lampeer, C. O. (2007). American economics and politics. New York: Nova Science Publishers. Rockoff, H. (2012). Americas economic way of war: War and the US economy from the Spanish-American War to the first Gulf War. Cambridge: Cambridge University Press. Uke, A. (2012). Buying America back: A real-deal blueprint for restoring American prosperity. New York: SelectBooks, Inc. Appendices Appendix 1:Multinational investments Appendix 2:Productivities of high values Appendix 3: Enhancement of poor societies Graph; Foreign direct Investment graph Period Job Cut Announcements Total Job Cuts Number Average Job size cut Total % Monthly Average 1st Jan to 10th September 11th Sept to 31 Dec Total 2001 470 3570 380 2530 850 3110 1680 63.6 201 960 36.4 265 2640 100.0 220 Table: Job cuts announced by multinational corporations in 2001 Read More