American mask makers are going out of business
nytimes.com
nytimes.com
People are talking about Shenzhen electronics all the time. It's that impressive because the supply chains are there.
Yiwu, the Shenzhen counterpart for everything else is less mentioned: no matter its masks, toys, clothes, furniture, or MAGA hats, or Ukrainian flags (or Donetsk flags, or even RoC flags, they don't care), they make EVERYTHING and it's the place the world put orders to. It's the kitchen sink of the light industry, so that companies stay afloat instead of making masks for life.
Isn’t that sort of the whole question?
> the main issue is the fact this country is unwilling to build up local supply chains
We don’t have a command economy. It also doesn’t make much sense to pay prevailing US wages to produce masks that sell for $0.50 per unit, you would need incredible scale to make that work, you’d need to be 3M, who does make them.
> because they're too busy giving themselves fat bonuses by cutting costs while jacking up hospital bills on patients
What? People who run hospitals are unlikely to every be involved in manufacturing anything, it’s a totally different kind of business.
I’m not sure what you’re arguing here.
One could argue that there's an inherent ethical issue at play if the country needs masks priced at $0.50 per unit, but can't manufacture them itself while paying wages that it considers fair.
More simply put, Americans demand much higher wages than would make such a cheap mask possible. The cheaper a thing like a surgical mask is, the easier it is to use a fresh one every time you need one.
This is a terribly myopic view of the world. Having a much lower cost of living or relative stage of economic development is a competitive advantage in manufacturing low cost goods that require a lot of human input. Those wages can be and often are pretty good relative to local alternatives. Low skill, low cost manufacturing is usually a stepping stone in economic from subsistence agriculture to a more advanced economy. The conditions don't necessarily have to be bad, and are quite a bit better than a lot of agricultural work.
Having lot's of people moving from farms to cities is a competitive advantage in low cost manufacturing. We're already seeing China moving aways from some of these types of manufacturing as their economy advances. Neighboring states are using this shift to try and shift their economies away from subsistence agriculture as well.
It's fine to lobby for better working conditions, especially in trade deals, but we shouldn't deny people in other parts of the world the opportunity to move from agriculture, to light manufacturing, to more advanced economic activity.
Western nations are wealthy because the West, broadly, won WWII and the Cold War while spending the post war period building high tech industry. The US in particular started industrialization as a low cost manufacturing center. Other nation deserve a chance to follow the same path to prosperity.
Also it's like you didn't read the article (likely didn't) that explicitly mentioned hospital admins cutting costs (the article says they're hooked on cheaper goods "like crack"), otherwise you would have seen the connection.
It's ridiculous to think that we should have to manufacture every single important product domestically even if there are better opportunities for economically for firms and workers. We specialize for a lot of good reasons.
The article has a really naive view of economics and takes an uninformed protectionist stance.
for example:
>To put it another way, the modern imperative of maximizing shareholder value will always put efficiency and cost over resilience.
This means that the firms in question are aren't correctly pricing supply chain risk. Supply shocks will surely destroy a lot of shareholder value. But, paying too much for supplies necessarily means you have less money for things like pay, new equipment, etc.
Even for goods 100% made in the US from US raw materials there were still supply disruptions. If a large percentage of all truckers and loading dock workers are sick with COVID, you still won't have the goods have and where you need them. Goods weren't unavailable simply because they were made abroad, they often were sitting unloaded in containers.
There's more than a century of of economic research around protectionism and it's pretty clear that it doesn't pay off in the way it's proponents suggest. We got fucked on PPE because the stockpiles weren't maintained. The government promised the healthcare industry that ti the event of a Swine Flu like pandemic, that there would be a stockpile that they could draw from. So rationally, hospitals didn't keep their own stockpiles. The government after building up the stockpile initially, just didn't maintain it.
The big problem with the buy American initiatives is that they sound nice, but are in the end just handouts to favored businesses. If you require highway projects to only use American steel for guard rails, you end up with fewer miles of highway for the same amount of money. Trying to tie corporate welfare, jobs programs, and things like infrastructure together in a single initiative is a sure way to do all three badly. We've seen this for decades. And the more domestic producers rely on the government to tip the scales, the less able they are to compete internationally. It's a lose lose, for the false promise of "resiliency".
1 or 2% of the population wearing a mask for a week isn't quite the same as 100% of the population wearing one for years (e.g. in Singapore or Hong Kong).
Why can't the US government mandate hospitals need to purchase a percentage of their supplies from US manufacturers in order to receive medicaid/Medicare. It can be 10, 20%, low enough to keep costs down by importing the bulk from China, but high enough to maintain a base that can be ramped up.
Trade agreements most likely.
I would not be surprised if that sort of preferential treatment would count as a subsidy and be actionable under NAFTA (whatever it's called now).
Many are nearly so. Giving people a thin veneer of token but not real freedom and token but not fair salary or decent working conditions doesn't absolve you of abuse.
Raise people in an environment where people learn that how they are being treated is right and make everyone fear dissent and you just won't hear about many peoples feelings from the other side of the world.
Obfuscation is the name of the game in the 21st century, make absolute things grey areas, and add layers of abstraction to the extent that you can't really tell what's being done or whose fault it is so that the same kinds of exploitation can keep going on and it's not so easy to be opposed to it because finding the target is just hard.
> Many are nearly so. Giving people a thin veneer of token but not real freedom and token but not fair salary or decent working conditions doesn't absolve you of abuse.
“Real freedom”? “Fair salary”? “Decent working conditions”? What makes you think Chinese people can’t make their own choices? They’ve been leaving the countryside nonstop for 70 years. The pay for unskilled labor has been going up pretty much nonstop since Deng opened up. China has a lot bad about it but I doubt you would be pretending Thai people are unthinking automatons and they’re about as rich as Chinese.
> Raise people in an environment where people learn that how they are being treated is right and make everyone fear dissent and you just won't hear about many peoples feelings from the other side of the world.
Indeed. You could make children sit down, shut up and do as they’re told all day five days a week if you just told people it was normal. You could invade and bomb other countries with impunity. You could support other countries in intervening in civil wars to keep them going without end. Good thing we’re free. Good thing we right thinking people would never do anything like that.
It is not that different when the time you pee is measured and factored in pay
Um
> The United States is the world's third largest manufacturer (after the People's Republic of China and the European Union) with a record high real output in Q1 2018 of $2.00 trillion (i.e., adjusted for inflation in 2009 Dollars) well above the 2007 peak before the Great Recession of $1.95 trillion.
https://en.wikipedia.org/wiki/Manufacturing_in_the_United_St....
It seems to me that historically the real controls on our business models were social, not regulatory. And with ethics and conscience removed, we've become a society being slowly devoured by a close relative of paper-clip optimizer AIs, running on distributed and fungible human wetware.
Functionally the EU operates with zero internal customs etc, free movement of people etc. It also represents a population group of a similar size to the US and China.
In the same way, breaking down manufacturing in the US by state, and comparing each state to China is not helpful, so dealing with each European country invidually in the comparison would not be helpful.
Plus from a motivational point of view adding in Mexico and Canada does nothing for those keen to improve the state of US manufacturing. Inside Europe there would be similar reports comparing the individual countries - and I suspect at the US state level there might be studies as well.
With the free movement of people though internal competition is less beneficial. (although geographic spread is still desirable.)
Perhaps more importantly, it provides a national strategic interest that is not easily captured through economic analysis. When times are good and international trade happens smoothly this is not important, but when the international market breaks down for some reason, having domestic production gives our government more options in how to respond.
We saw this with covid, when every nation was scrambling critical resources to deal with the public health emergency. We see this now with Russia, who is regretting how dependent they on foreign trade; and in Europe who are regretting how dependent they are on Russian energy.
https://www.scmp.com/economy/china-economy/article/3167588/c...
Also, Chinese restrictions on companies restrictions on foreign companies pale in comparison to the freedom they enjoy in the US.
https://www.aljazeera.com/economy/2021/12/28/bbchina-unveils...
https://www.cnbc.com/2021/09/28/enticing-china-market-tricki...
Google, Facebook and Twitter are all banned in mainland China.
https://www.cnbc.com/2020/10/12/chinese-app-that-let-users-a...
https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma...
Meanwhile, TikTok and the likes are freely allowed to shape our minds.
Blocking foreign companies is a form of massive subsidy.
Yes, I know if you write software for a medical device, the FDA will have to approve it.
It's an error to assume that there are absolutely no COVID tests made in the US simply because the small handful you received wasn't.
For instance, the popular over-the-counter at-home test manufactured by Abbott is made in the US, except for swabs (mix of Thailand and US) due to supply/demand issues.
https://www.globalpointofcare.abbott/en/product-details/bina...
If the only way US test production can compete is via predatory price gouging, that’s hardly a sign of health.
†: The criterion was performance vs. PCR test, even though PCR and antigen tests measure different things, so that the vendors who slipped through the regulation were those who best gamed the test studies, while various other vendors with tests that perform nearly identically in practice failed FDA study criterion. The FDA refused to accept a performance comparison of new antigen tests vs. already approved antigen tests.
It's an error to imply they were making this assumption in the first place. I, too, am baffled that two years into a pandemic, any tests are coming from China. Didn't the whole thing _start_ there?
Global supply chain issues have clearly stuck around, and we're relying on another country on another continent to provide something that would classify as an emergency good. You tell me how that makes sense.
The downvotes are cute, this is a very legitimate concern though. There's nothing wrong with wondering why China releasing a virus is just an "oopsie."
It's a tall order to fix 40 to 50 years of global offshoring in a 10 months. If COVID has taught me anything, I believe we are more likely to just grit our teeth and put up with the costs than actually try and fix the issue in the future. Americans will never buy (or could possibly afford) domestically manufactured goods. There is already fervor at increased food prices due to the labor price increases all across the food chain; you want to do the same to cups and plates? It would never be politically successful.
>The downvotes are cute, this is a very legitimate concern though. There's nothing wrong with wondering why China releasing a virus is just an "oopsie."
Because it's not a productive conversation. 1) Whether it's an "oopsie" or not, Americans were still unprepared. 2) If it's not an oopsie, what are you going to do? Invade China on a hunch? 3) Given the history of respiratory diseases in China (e.g. SARS), and the growth of China in the global economy, isn't it more likely that is SARS 2 ever occurred it would be global in nature? This isn't the first time China has had to deal with a respiratory virus.
That's... not what I asked for. We're talking respiratory cloth masks here, not the global economy.
Our discussion will be more productive if you don't put words in my mouth.
You're really trying to ignore the obvious red flags. Respiratory masks for US consumption being made in China is not a result of globalization. It's just corporate greed hiding behind virtue signals.
Where do you expect these masks to be made? In people's backyards? When you are talking about suppling millions of masks, you are talking about the global economy. The tooling that is used to quickly ramp production to that scale is because you can take already existing systems that are used to develop clothing and other apparel and rapidly convert them to making masks. If you don't have that, then where do you expect it to come from? If you don't already have people working in factory, making clothes, where will you find the people to start making masks? Then lets say you do find these people, on very short notice. You are now paying them american labor prices; will your potential customers just choose to source from overseas anyways?
I'm not putting words in your mouth; maybe you aren't fully aware the effort it would take to ship millions of anything on such a short timescale without having the existing infrastructure to do it; especially if that infrastructure hasn't existed for a very long time. You are putting forth a very difficult problem very matter of factly.
(I'm not advocating for these restrictions.)
Regulations and labor protection is good for workers, but it will increase cost and if those manufacturers have choice they will source their suppliers elsewhere.
Other comments also mentioned, that made in US isn't really a hallmark of quality across the board, if the consumers are expected to pay 2x-3x more, then it better has something extraordinary to offer, I don't think mask had that much differentiation
If you can make something in the US for $5 and sell it for $300 you make $295 profit.
If you can make it in China and ship it to the US for $4 you make $296 profit.
Therefore its better to make it in China. They disregard literally every other benefit.
Most products on a market have slim margins and here such production costs make a huge difference in profit if the buyer is not willing to pay much more for products (partially) produced in the home country.
I think it is pretty self explanatory.
I would also add, as other people have mentioned, that domestic manufacturing requirements are at best over priced jobs programs through the back door.
Off the top of my head:
1. what if US manufacturers can't supply them in sufficient quantity
2. what if US manufacturers' delivery dates are too far in the future
3. what if US manufacturers' product does not meet standard
4. what exactly is a US manufacturer anyway, in a world with a global supply chain and complex ownership structures?
5. what if there's only one US manufacturer, and so can charge monopoly prices?
Once the demand goes to levels similar to 2019 and the supply-chains stabilize, no business can escape the realities of the market unless they somehow manage to undercut the competition on price even more, which in this case is almost ridiculous.
Market forces are not a moral obligation, nor are they an invitation to put a huge "kick me" sign on your back, stand in front of some proverbial John Galt, and let nature take its course. They're just a description of how things tend to naturally work out in the absence of intervention.
As far as I can tell, all three of these are 100% American made. A bunch of smaller companies opened up due to the N95 mask shortage for the pandemic. I'm not surprised that the smaller businesses are going out of business, but I have my doubts that the "big" ones are leaving USA either.
N95 respirators get used for all sorts of stuff. I use them so i don’t breathe in sintered brake pad dust when i work on my car, for example.
Genuinely asking because the article is paywalled.
2 years ago all the health care establishments in the USA really, really needed N95 masks, but couldn't get them. Because they were all manufactured overseas, and all the countries that produced them decided to temporarily stop exporting to protect their own supplies. It was a problem. The emergency department where my dad used to work nearly had to shut down for a while due to staffing shortages from his colleagues catching COVID.
It happened with H1N1, it happened with COVID-19, and now the US is negligently ensuring that it will happen to them again with the next major epidemic, too.
(Also, that phrase "used to" should perhaps be chilling to anyone who lives in the USA and does not possess a mutant healing factor.)
For the country, thats a different thing. If the state wants a certain kind of transaction to occur then they need to incentivize it.
Personally I am happy that I am not toiling away at some mask factory but instead sitting here, in the safety of my own home, copying pieces of JavaScript from stackoverflow into an internal webapp for some big corp, with an ample supply of masks and rapid antigen tests at my disposal.
China probably can produce the masks because they are masters of economies of scale. Sure, there are still sweatshops but anyone who has actually been inside a Chinese factory knows that is selling them short. Most Chinese factories are nearly completely automated and vastly more sophisticated than anything you’ll ever see in the US. They are obsessed with automation and continuously invest back into the business, preferring ways to increase per work output with technology.
I’d compare it to Amazon, which also makes me wonder why hasn’t Amazon gotten into all sorts of manufacturing by now?
The expensive part is the non-woven base material. I’m not sure this would be available in the US or could be stored for long. Even in CN only a few firms make it and it was the main bottleneck during Covid.
Source: worked closely with smaller CN companies to make masks and that’s what they shared with me over the previous 2 years.
what does that mean?
Anecdotally I know of several small businesses that switched from an unrelated field to importing and selling medical and related supplies.
Testing clinics have also grown and their size will no longer be sustainable due to reduced demand.
Thee has also been a boom in delivery businesses that were sustainable when demand was overwhelming but will no longer be viable, restaurant and grocery in particular.
They also will have knock-on effects onto other businesses such as packing material. If restaurants deliver a lot less they'll need a lot fewer take-out boxes, etc
Catering to all regardless of political affiliation is a good indicator of the populations freedom of political thought.
Where are you from that such a thing is unusual?
Political organisations selling T-shirts that advance their cause? Normal.
Retailers basing stock decisions based on advancing particular political ideologies? Not normal.
To be fair, "retailers" aren't a normal concept, being a recent innovation on human systems. Nothing about modern society is "normal".
Yeah, that's what you want from a retailer.
Good on him for holding the line. His business would be in trouble right now if he expanded because the US still obviously hasn't learned the lesson.
This isn’t true. Wearing masks when sick has only been common in East Asia since SARS and that’s the only region it was common in. It’s not universal there either. There was an irritated comment in my office Friday about someone sneezing who didn’t never his mouth, never mind wearing a mask.
Possibly wearing a mask will be normalized in Western countries after this is over but I sincerely doubt people in the Congo or Malawi or Guatemala are wearing masks while sick. Lots of people and countries are dirt poor.
China has problems. They have essentially zero natural immunity, their vaccines aren't very good, and Omicron spreads really well. So well masks aren't even close to enough. Once contact tracing is overwhelmed, China will have to do large-scale lockdowns on-and-off for a while.
The optimist in me wants to believe omicron is a sign of things to come; more infectious but less deadly variants we can largely ignore like the common cold. But what's preventing another variant emerging that's both more infectious and more deadly after ripping through one of the less vaccinated nations? The lethality aspect seems somewhat random from where I'm sitting, not an expert.
Nothing.
People fold quickly when you ignore their requests to wear a mask.
Do you just do this now or were you doing this back in 2020 too?
Yet so many people flipped out when a business wouldn’t design a custom cake for a same-sex couple.
Which is it? Can businesses enforce their own rules and values on their own property or not?
As far as I understand wearing a mask doesn't fall into either category so the gay cakes thing has very little to do with this and comes off as whataboutism.
Morality is not the same as legality.
Masking helps prevent spread of illness.
Legality should follow morality, but the reverse often happens.
The grandparent comment didn't appear to suggest what you're clarifying question asserts.
It’s very easy to have a belief that businesses should be able to pick who their customers are or that they should be forced to serve everyone, but any opinion in between is very difficult to make logically consistent.
Deal with current Politicians, Executives of multinational corporations, Pharma and the industrial complex.
When China threatened to not send the US medicine during the pandemic it should have made it clear what the US should be preparing for.
And who could think of a reason why we might need the capability to domestically produce a bunch of masks all of a sudden, right? Inconceivable.