Why Do Products Made In The USA Cost More?

Higher Cost of Goods For Made In The USA

For the past three decades, companies and consumers have benefited from international trade that kept a steady supply of electronics, toys, and other goods in abundant supply and at low prices. Unfortunately, the pandemic and the ongoing war in Ukraine have continued to affect trade and business ties, as well as supply chains around the world. This has encouraged companies to rethink how and where to source their products and stock their inventory, especially in the United States.

Apple, Walmart, and other major corporations have already begun taking steps to “reshore” or “onshore” their supply chains, meaning they plan to bring more manufacturing to the United States or buy more from US suppliers. For American consumers, this means more goods made at home, but it also means increasing costs. Despite this increase, the benefits of Made in the USA products make up for these potential drawbacks.

What Increases The Costs?

Many US citizens support the move to ‘Made in America’ products, but few realize what buying American means. Moving manufacturing and suppliers to the United States leads to an increase in local jobs and help strengthen the supply chain, but it comes at a cost to consumers’ wallets. For those who want to know more about why goods produced in the United States cost more, it can be difficult to find the answer. Many citizens are left wondering how this benefits them.

Below are a few of the reasons companies increase their prices when they manufacture their products in the United States.

Higher Labor Costs

One of the many benefits of buying products made in the USA is that it creates local jobs around the country. This provides a great boost toward the economy and employment numbers, but it comes with a price.

The prices of products are set, in part, in response to the wages a company pays its workers. While other countries tend to underpay their workers, the United States has laws that enforce a minimum wage and ensure that employees receive a stable paycheck. Businesses cannot just exploit their workers and use them for hours of unpaid work.

Buying American-made products means supporting fellow United States citizens and the families who depend on their paycheck. Price increases may seem inconvenient, but they go toward locals, including people in your own neighborhood. Understand that, despite the higher cost, you are funding someone’s livelihood in the United States.

Safety Regulations

Many foreign nations that serve as manufacturing hubs have poor labor protections for their workers. Cheaper products come at the cost of basic ethics and human rights. From overcrowded rooms to tragedies at these “sweatshops,” many Americans are learning of the effects buying cheap, foreign-made goods has on other people around the world.

Unlike these countries, the United States has strong protections for employees across the country. These regulations uphold labor and work standards that ensure the safety and financial stability of everyone. Unfortunately, regulations can increase costs as companies need to ensure they comply with all national and local safety standards.

The time and money spent on creating safe working conditions is reflected in products that are Made in the USA. A few extra dollars, however, is worth the price of ensuring fair and safe labor practices for fellow Americans and the state of our economy.

Environmental Compliance

Another subsection of regulations is those set up to protect the environment. Manufacturing plants built and operated in the US must follow local and national standards for emissions and the handling of potential pollutants. Companies often are expected to spend additional money on inspections, equipment, and other necessary items needed to comply with those regulations.

They can do this by passing on some of the cost to their customers. By paying extra at checkout for your locally made product, you are helping protect the environment both globally and nationally. Shorter shipping distances and tighter regulations mean less pollutants and more natural spaces for you and your family to enjoy.

Product Quality

The same standards the US upholds for worker and environmental safety also applies to product and consumer safety. Many cheaply manufactured goods do not undergo strict inspections to ensure they are safe to use. In contrast, the stricter standards within the US mean that each product is inspected to the highest degree before being placed on shelves for you and your loved ones to purchase.

Like other regulations, this does not come free. Manufacturers must pay inspectors to test their products, whether that be their chemical or physical safety. This also involves the cost of ordering test materials as well as any time lost during in-depth testing. The cost of all these safety measures is passed onto the consumer.

Despite this, clients can rest easier knowing that anything they have bought with the “Made in the USA” label is less likely to bring harm to them or their loved ones. Cheaper is not always better, especially when it comes to safety!

The True Cost Of Buying Made In The USA

Since the Buy American Act of 1933, presidents have promised to encourage companies to build in the US with varying degrees of success. President Biden is the most recent to take up this mantle, with the aim of slowly undoing decades of offshoring for cheaper labor and materials at the cost of American jobs.

Investing in and accelerating the production of US-made goods, if only to make sure the country has a supply of key products like computer chips and medical equipment ahead of the next national or global emergency, is a useful strategy. It will potentially reduce our nation’s reliance on the international supply chain, which proved to be one of the biggest hurdles following the start of the pandemic. By choosing to shop products made in the United States, the average American citizen can not only support national economic growth, but also show manufacturers that products with the label ‘Made in the USA’ are in high demand. 

At Prod Origin, we are proud to feature a variety of goods made in the United States. Many of these are smaller, local businesses and supporting them helps support not just their local economy, but the entire nation. When you find a product on our website, you can rest assured you are supporting Americans around the country.