American made toys are a dying breed, a phenomenon of global realities and macroeconomics as the richest countries have relied on offshoring to dramatically reduce costs and increase revenues.
As the economy in the United States continues to suffer, it is joined by the United Kingdom and to a greater extent nations in the European Union such as Greece, Turkey and Ireland in the current economic decay. Meanwhile, recently impoverished nations are seeing a rise in the strength of their economy, such as India, Brazil and China. Many can argue that our own nation’s offshoring and outsourcing processes have instigated the trend.
With China’s success comes a position of global bargaining strength as they challenge the current President of the US with their economic policies. And while it’s easy and in many ways right to blame China for all of the toys we purchase not being produced in the United States, the trend can be interpreted as a direct result of American toy manufacturers reducing costs and increasing revenues by offshoring their manufacturing activities to countries like China. So the root of the problem begins there.
Offshoring of toys began as far back as the 1960’s. By 1970 there were still about 86% of American made toys on the market which employed about 60,000 people. By 2007, about 80% of all toys purchased in the United States were being made in China and the jobs that remained in the United States were executive, corporate and creative, nearly eliminating manufacturing positions.
At the same time, executives in these companies were averaging $42 for each $1 earned by their average employees in 1980. By the year 2000, that number ballooned to $531 for every $1 each employee earned. More importantly, the savings in manufacturing costs were only slightly transferred to the consumer.
Early on, Americans loved to buy cheap Chinese toys as the savings were ridiculously low in comparison to USA made toys. We bought them as Made in USA commercials ran on our televisions. By the time our generation grew up and were buying toys for our own children, we were stuck with the current pattern, but this time we were beginning to lose out on the savings. Since cheap toys dominated the market, there were no alternatives and companies can pocket the profits while increasing toy prices.
Today, Chinese imported toys are becoming increasingly expensive. Though the average $0.36 per hour of Chinese labor is on the rise, the major increases are coming from rising costs in the raw materials of plastic, which include petroleum and resin.
Compounding this dilemma, American made toys manufacturers no longer benefit from economies of mass production, as they are now smaller mom-and-pop type of businesses unable to produce toys in large quantities and making them expensive and uncompetitive.
Above left is the original Slinky still Made in America. To the right is a cheaper “Metallic Spring.” Which would you buy? And is it that much cheaper anyway?