Stakeholder Trends and Insights

AP:
Americans Favor Low Prices Over American-Made Goods

Price remains one of the biggest draws for American consumers. Results from a recent Associated Press-GfK poll show that the vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled “Made in the U.S.A.,” even if it means those cheaper items are made abroad.

By Sustainable Brands | Published 8 years ago | About a 3 minute read

Price remains one of the biggest draws for American consumers. Results from a recent Associated Press-GfK poll show that the vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled “Made in the U.S.A.,” even if it means those cheaper items are made abroad.

Furthermore, nearly three in four say they would like to buy goods manufactured in the United States, but believe those items are often too costly or difficult to find. This misalignment is similar to what we’ve seen with ethical fashion or products with an associated social or environmental benefit – what people ‘want’ does not align with their actual purchasing habits.

While lost jobs and stagnant incomes might be to blame, the survey of 1,076 adults conducted online from March 31 to April 4, 2016 showed that the ‘haves’ are just as likely as the ‘have-nots’ to hold such preferences. The respondents were presented with a ‘real-world example’ of choosing between a pair of $50 pants made in another country or an $85 pair made in the U.S. from the same retailer, made with the same fabric and design. 67 percent said they would buy the cheaper pair, while only 30 percent said they would pay for the more expensive American-made pair. People in higher-income households earning more than $100,000 per year were no less likely than those in lower-income households to say they would chose the lower price.

The findings are rather timely given that presidential candidates such as Donald Trump and Bernie Sanders hope to revive the U.S. manufacturing sector and ‘bring back’ millions of American jobs lost to foreign competitors. Both Trump and Sanders have spoken out on trade deals; “From their perspective,” wrote Josh Boak and Emily Swanson for the Associated Press, “layoffs and shuttered factories have erased the benefits to the economy from reduced consumer prices.”

Trump, the Republican front-runner, has described America as “getting ripped off by everyone,” when it comes to trade. He has vowed to shred the 1994 North American Free Trade Agreement with Mexico and Canada. Trump has also pledged to impose tariffs on China in hopes of erasing the U.S.’s trade deficit, despite that economists doubt that he would be able to create the first trade surplus since 1975.

Sanders, the Vermont senator who is competing with Hillary Clinton for the Democratic nomination, has taken a less aggressive stance. Earlier this month, in reference to ending the off-shoring of jobs he said, “I will stop it by renegotiating all of the trade agreements that we have,” and noted that wages paid to foreign workers and environmental standards would be part of any deal he would make.

“The reaction to trade is less about trade and more about the decline in people's ability to achieve the American Dream,” said Caroline Freund, a senior fellow at the Peterson Institute for International Economics. “It's a lot easier to blame the foreigner than other forces that are affecting stagnant wage growth like technology.”

Americans themselves are divided on free trade agreements. As the Associated Press points out, “Americans are slightly more likely to say free trade agreements are positive for the economy overall than negative, 33 percent to 27 percent. But 37 percent say the deals make no difference.”