What is the State of the U.S. Economy?

December 12th, 2023

There are many different opinions on the state of the U.S. economy. This is normal when we are entering an election year.  The political party in power wants the economy to appear good or better than the previous administration, and the opposing political party wants it to appear worse than when they were in power.

Let’s examine what are the key economic indicators as well as other data to determine the true state of the U.S. economy.  According to the website, USA Facts, the key economic indicators are:  GDP, inflation, Federal Reserve interest rates, workers’ average hourly wages, unemployment rate, ratio of unemployed people related to job openings, labor force participation rate, trade deficit (imports vs. exports), and Federal debt. USA Facts only reports the figures at the end of the year so the data shown is for 2022 since 2023 hasn’t ended yet.

Gross Domestic Product 1970 – 2023

Labor Force Participation Rate

The rate is calculated as the labor force divided by the total working-age population. The working age population refers to people aged 15 to 64. This indicator is broken down by age group and it is measured as a percentage of each age group.

The labor force participation rate was 66.0% in 2008, and gradually dropped down to 63.3% by January 2020.  As a result of the COVID-19 pandemic, it dropped to a low of 61.5% in November 2020 before gradually rising to 62.8% in November 2023.

Ratio of Unemployed People to Job Openings

According to the Bureau of Labor Standards, “The ratio of unemployed people to job openings ranged from 0.8 to 1.0 during 2018 and 2019. Over the past 5 years, the number of unemployed people per job opening reached a high of 4.9 in April 2020, when there were 23.1 million unemployed people and 4.7 million job openings. Since October 2021, the ratio has been 0.5 or 0.6 every month…When ratios equal 1.0, there is approximately 1 unemployed person per job opening. When less than 1.0, the labor market is tight, as job openings outnumber the unemployed. When greater than 1.0, there are more unemployed people than available jobs..”

The unemployment rate of the United States which has been steadily decreasing since the 2008 financial crisis, but spiked to 8.1 percent in 2020 due to the COVID-19 pandemic. The annual unemployment rate of the U.S. since 1990 can be found here.

Federal Fund Interest Rates

The Federal Reserve raised interest rates seven times in 2022 and four times in 2023, increasing the target rate from nearly zero (0.25%) in 2020-2021 to 5.25%-5.50% currently. The Fed is expected to hold rates steady when they meet this month. The Fed rate affects the consumer interest rates for mortgages and installment loans for things like cards, home furnishings, and other consumer goods.  Mortgage rates have risen from 2.75-3.25 in 2021 to 6.0%-7.9% in 2023.  This has stagnated sales for homes and automobiles.

National average wage indexing series, 2001-2022

Year  Annual Wage YearAnnual Wage
2001$32,921.92 2012$44,321.67
2002$33,252.09 2013$44,888.16
2003$34,064.95 2014$46,481.52
2004$35,648.55 2015$48,098.63
2005$36,952.94 2016$48,642.15
2006$38,651.41 2017$50,321.89
2007$40,405.48 2018$52,145.80
2008$41,334.97 2019$54,099.99
2009$40,711.61 2020$55,628.60
2010$41,673.83 2021$60,575.07
2011$42,979.61 2022$63,795.13

Data source:  https://www.ssa.gov/oact/cola/AWI.html

It looks like wages have nearly doubled in 21 years, but the value of the dollar has changed over time. According to the CPI Inflation Calculator, the ”U.S. dollar has lost 42% its value since 2001; $100 in 2001 is equivalent in purchasing power to about $173.73 today…The dollar had an average inflation rate of 2.54% per year between 2001 and today, producing a cumulative price increase of 73.73%.” This we need to deduct 42% from the 2022 wage to compare it to 2001 ($63,795.13 – $27,431.91 = $42,363.23). Thus, the wages only went up by 34% while inflation increased 73.73%. 

U.S. Private Sector Job Quality Index

The November Job Quality Index report by The Coalition for a Prosperous America states, “The Job Quality Index measures job quality for U.S. production and non-supervisory workers by comparing workers’ weekly wages to the mean weekly wage for all non-supervisory workers. Those jobs above the mean are classified as high-quality and those below the mean are low-quality…Over the past three decades, the JQI declined because the U.S. economy created more low-quality jobs than it has high-quality jobs. As shown in Figure 1, the JQI is down 12.8% from 1990 illustrating the disproportionate growth in low-wage, low-hour jobs.”

The last year that the U.S. had a positive trade balance by exporting more than we imported was 1979. The trade deficit grew gradually from 1980 – 1999, but accelerated after China was granted Most Favored Nation status in the year 2000.  In 2022, the trade deficit of $948.1 billion a 3.9% increase from 2021.

For my industry of manufacturing, there are two other measures that can be examined to determine the true state of the economy.  They are:

US ISM Manufacturing PMI

The Institute of Supply Management Purchasing Managers Index “is a diffusion index summarizing economic activity in the manufacturing sector in the US. The index is based on a survey of manufacturing supply executives conducted by ISM. Participants are asked to gauge activity in a number of categories like new orders, inventories, and production and these sub-indices are then combined to create the PMI… A PMI above 50 would designates an overall expansion of the manufacturing economy whereas a PMI below 50 signifies a shrinking of the manufacturing economy.

US ISM Manufacturing PMI was at a level of 46.70 on November 30, 2023, unchanged from 46.70 for October and down from a recent high of 64.70 in March 31, 2021.  The PMI dropped to 49.00 for the November 30. 2022 report, so we have been in a shrinking economy for 13 months.  

U.S. Manufacturing Technology Orders  

According to the November report published by AMT, The Association For Manufacturing Technology, “orders for manufacturing technology…continued to fall relative to 2022. Through October 2023 orders totaled $4.05 billion, 13.5% behind the total for the first 10 months of 2022.  

Conclusion:  Adding to the above data is the fact that vehicle gas prices have escalated since 2020.  According to Finder, “Gas prices in over the last 12 months are well above the national average over the last six years, hitting $4.99 a gallon in the week of June 16, 2022 — a week in which Californians paid a whopping $6.43 per gallon…The national average gas price this week [December 7th] is $3.22, down from $3.27. US gas prices over the last year are among the highest since 2018. California has the highest gas prices in the nation, followed by Hawaii as a close second, and Washington, Nevada, and Oregon making up the top five.  Texas has the lowest gas price ($2.68) in the nation followed closely by Mississippi ($2.72) and Oklahoma ($2.74). 

According to the U.S. Government Accountability Office, “Last year, U.S. consumers saw the largest annual increase in food prices since the 1980s. While food prices generally increased about 2% in prior years, they increased about 11% from 2021 to 2022…Food prices increases also varied by locality. For example, the highest increase between 2021 and 2022 was seen in Detroit Michigan (about 14.5%). The lowest (about 5%) occurred in the Miami-Fort Lauderdale, Florida metro area…Finally, food price increases from 2021 to 2022 varied by food group. For example, prices for grains and bakery products increased by about 13%, while fruits and vegetables increased by about 9%.  Similarly, dairy products increased by about 12%, but meats, poultry and fish increased about 10%.”

I am not an economist qualified to do an educated analysis of all of the above data, but it is obvious to me that the U.S. economy has some serious problems that need to be urgently addressed if we want to avoid a prolonged recession. The question that voters ask themselves in an election year, “Am I better off now than I was under the previous administration.”  The answer to that question will determine the outcome of the next election.     		 

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Black Inventors Honored at Black Inventors Hall of Fame

November 28th, 2023

When I attended the US Inventor first annual conference last month, I had the pleasure of meeting James Howard, Executive Director of the Black Inventor’s Hall of Fame (BIHOF).  He had a display panel at his table that showed a collage of pictures of Black inventors.  Because the breaks between sessions were short, I didn’t have time to talk to him as long as I would have liked, so we caught up on Zoom last week.

I told James that I had browsed every page of the Black Inventors Hall of Fame website as well as his LinkedIn profile and was impressed with his background and experience.  We share a few things in common —we were both born in Chicago, are entrepreneurs, and have taught entrepreneurism. Of course, James taught as a professor at the County College of Morris while I only taught teens how to start their business in an after-school and summer camp program for a non-profit called Millennial Entrepreneurs in the early 2000s.

Besides being an inventor himself, Mr. Howard also brings over 25 years of experience as a design professor and has authored a course on Design Thinking and Design History that explores the impact of design on society. His latest venture is Entrepreneurial U, Morris County’s first school of Design Thinking.” Mr. Howard said, “I have over 20 patents, so I understand what an inventor has to go through before finally getting their patent and a functioning model. I have had numerous patented products succeed on the market.  Most notably the AlarmLock access control lock, and the Vital Signs NeoNatal pressure relief valve for resuscitating infants at birth.

I asked why he founded BIHOF, and he replied, “I founded BIHOF to immortalize the pioneering genius of African American inventors for the past 400 years.  We needed “to recognize and tell the story of African American greats such as George W. Carver who in 1941 was referred to as “The Black Leonardo” by Time Magazine for his prolific contributions in the field of agriculture. Yet, nearly 80 years later, Carver was all but ignored by Time in its list of top 100 American inventors of all time. It is time that exceptional inventors are immortalized by being inducted into the Black Inventor’s Hall of Fame. The story of African American Inventors is a sad history of being lost or simply overlooked. Far too often, historical accounts forget to mention the incredible achievements of Black inventors. I am honored to have the privilege of bringing a broad and detailed awareness of the important work of African American inventors, artists and innovators who have inspired and forged ahead against tremendous odds and adversity.” 

He added, “Every year we induct extraordinary Black inventors into the Black Inventor’s Hall of Fame to permanently recognize their innovative contributions to society. The website serves as a platform telling the story of talented African American innovators.  We include and highlight notable advancements and projects from academia, manufacturing and agriculture to advancements in medicine and the sciences. Our goal is to identify entrepreneurial leaders who have invented and produced groundbreaking technological advancements that improve the quality of life around the world.”  

Mr. Howard said, “What you invent you have to make before you can finalize your model.  It is the basis for innovation, and if we don’t invent, we don’t have products to be made by manufacturers.  There is a link between inventing and entrepreneurism. That is why I started my school of entrepreneurism to help long term unemployed learn new job skills and a new way to achieve a good life. “

He explained, “In our community, we appreciate the importance of inventing and innovation. Finding new ways to do something or make something is woven into our DNA. However, many African Americans have great ideas but they don’t have the benefit of having a “rich uncle” to finance their venture. They have to try to finance it themselves, and the majority don’t succeed.” 

I said I realize that there are nearly 400 inventors listed in Henry Baker’s list of Black Inventors, but this list was published in 1894, so I wondered if he would highlight a few more recent inventors featured in his Hall of Fame.

He responded, “I would feature Dr. Hadiyah-Nicole Green.  She has developed a revolutionary cancer treatment that uses lasers and nanotechnology to eliminate cancer.” Her bio states, “She is a STEM pioneer, leader, humanitarian, and entrepreneur who is introducing the world to the next generation of cancer treatments, cancer charities, and affordable healthcare. She is one of the nation’s leading medical physicists and one of a short list of African American women to earn a Ph.D. in Physics. Dr. Green developed a revolutionary cancer treatment that uses lasers and nanotechnology to eliminate cancer in mice after only one 10-minute treatment in just 15 days with no observable side effects. To ensure the affordability of this treatment, she founded a 501(c)(3) non-profit organization, the Ora Lee Smith Cancer Research Foundation (OraLee.org), to raise the funding for human clinical trials.”

He said he would also include the late Dr. Patricia Bath, who invented “laserphaco, a new device and technique to remove cataracts. It performed all steps of cataract removal: making the incision, destroying the lens and vacuuming out the fractured pieces. She is recognized as the first Black woman physician to receive a medical patent.”

He also mentioned Lonnie G. Johnson, who is a former Air Force and NASA engineer who invented the #1 top selling water toy of all time, theSuper Soaker®.  Coincidently, my husband and I had just watched an episode of The Toys ThatMade America on the History channel featuring the Super Soaker®.   The show told how it took Mr. Johnson eight years to find a Toy company, Hasbro, willing to make a deal to produce and market this toy, which has generated well over $1 billion in sales over its lifetime. The show mentioned that Mr. Johnson’s longtime research focuses on energy technology, and his toy resulted from his work on an environmentally friendly heat pump. His bio states, “He currently holds over 100 patents and has over 20 more pending on products and processes ranging from toys and consumer products to advanced technology energy. He is president and founder of Johnson Research and Development Co., Inc., a technology development company, and its spin off companies, Excellatron Solid State, LLC; Johnson Electro- Mechanical Systems, LLC; and Johnson Real Estate Investments, LLC.”

I told him that when I browsed the website, I saw that he is planning a museum for BIHOF, and he replied, “Yes, we are raising money to build a museum, which we envision to be a 31,000 sq. ft. facility with state of the art, tuition free STEAM classrooms, theater, Metaverse library, startup incubator, and a Legends Hall featuring the top Black inventors of the Golden Era in this country. The BIHOF Museum and STEAM Learning Center is planned to be located in New Jersey. BIHOF is a 501c3 organization, so donations to help build the museum are tax deductible. “

I encourage everyone reading this article to consider making a donation to BIHOF so that Black inventors will receive the recognition they deserve and future inventors will be helped to succeed in the business incubator.

I told James that I was a managing member of a business incubator in the late 1990s and actually wrote my first book on business incubators in 1997 after visiting and researching incubators around the country for five years.  I think the idea of having an incubator for businesses started by Black inventors is a great idea because incubators and the new Makerspaces are very helpful in accelerating successful businesses. 

We both agreed that it is hard enough for any inventor to get a patent, raise the money to make and market a product, or get a licensing deal, but current broken patent system makes it even harder to be successful for both white and Black Americans.  We urgently need the patent reform recommended by US Inventors.  

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US Inventor Conference Was an Amazing Success!

November 14th, 2023

US Inventor’s First Annual Conference was held on October 19th and 20th at the U.S. Patent office facility in Alexandria, VA to celebrate 10 years of work to achieve its mission “to restore the patent system to what it once was and to empower inventors to succeed.”  About 150 people attended all or part of the two-day event.  It was a resounding success and truly a remarkable event!

I had the pleasure of attending this event because I have been a board member of the San Diego Inventors Forum since 2014 and have been the liaison between our club and US Inventor, which is the only organization representing small inventors, businesses, and startups to enact change that supports inventors.

The conference was preceded by a day at the Capital where about 30 of us broke up into small groups to meet with the staff of Congressional Representatives in Congress to discuss how to fix the broken patent system. The afternoon included a networking event held in the Rayburn building Gold Room to which Congressional staffers were invited to see the new documentary, Innovation Race, directed by Luke Livingston.  Mr. Livingston attended the whole USI conference and handled the live streaming and recording of the event.

US Inventor founder, Paul Morinville, began the conference Friday morning by saying that he started walking the halls of Congress to advocate for Inventor Rights in 2013 after his aspirations of achieving both the Inventor’s Dream and the American Dream were cut short by the America Invents Act of 2011 (AIA) and establishment of the Patent Trial and Appeal Board (PTAB). He was joined by Randy Landreneau in January 2014.  Paul incorporated US Inventor as a 501(c)(4) non-profit corporation on March 17, 2015 to put a stop to H.R. 9, the Innovation Act. After visiting the offices of every senator, the Innovation Act died in committee in  2016 during the 114th Congress (2015-2016). When Josh Malone joined them in 2017, it greatly helped their efforts.

Space doesn’t permit me to give a full recap of the conference, so I am providing highlights from my notes.  The panels both days were interspersed by the stories of inventors who have had their patents infringed or invalidated by the PTAB.  These stores were heartbreaking, and I could mot do justice to them in writing; you had to hear the stories to get the full impact. 

Next, former USPTO Director, Andrei Iancu, discussed “The Importance of Innovation”, saying in part that “patents and inventions ae part of the American fabric. We should stop and think what the world was like before the U.S. patent system…Every change that we use today was backed by a patent…Patents and the right to have patens are incorporated in the Constitution in Article 1, Section 8. He added that “without the patent system, it is very difficult to raise the money needed to produce and market new products.  There is an inextricable link between IP and innovation and without a secure patent system, innovation is stagnating…Inventors have always been the backbone of the American economy and American dream.”

Paul discussed “Where Did our Patent System Go?” He explained that even before the American Invents Act AIA) was passed in 2011, the Supreme Court decision of “Ebay vs. Merexchange” in 2006 “changed Intellectual property from a personal property to a ‘tort’ or “public franchise” and created a “public interest test’ in order for inventors to receive injunctive relief from infringement.” Injunctive Relief stops an infringer from making selling, or using a patent, but it has become difficult for an inventor to pass the “public interest test” against a large corporation that has saturated the market with the product based on the patent they infringed.

The AIA created the Patent Trial and Appeal Board (PTAB). It is a nonjudicial administrative tribunal within the USPTO. A panel of lawyers are appointed “Administrative Patent Judges” and granted bonuses to revoke patents.  There is no jury and no due process of law.  The PTAB is funded by fees of the petitioner (usually a large corporation that is infringing the patent they are challenging for review).  Currently, the PTAB is invalidating 84% of the patents they review.  

A panel discussion of “PTAB vs. Federal Court:  Comparing the Two Forums” followed that was moderated by Warren Tuttle.  Panelists were Rob Sterne, Adam Mosoff, and Molly Metz. A few comments were:

Adam Mosoff – “The PTAB hasn’t lived up to its expectations. I had told people that the ‘first to file’ vs. ‘first to invent’ and PTAB would be problematic. The PTAB didn’t put in any protections for inventor’s rights. PTAB was characterized as easier for people and faster, but they set up a system that was ultimately faster to lose rights.

Molly Metz – “I spent over $400,000 and it took four years, so it wasn’t cheaper or faster.” (Molly had share he heartbreaking story of her patent infringement and invalidation after Paul’s introduction.)

Rob Sterne – “We need a system that is really faster and fair for people.  The way PTAB law is applied isn’t anything like the way it was supposed to be.  It has put a real damper on investment and innovation in this country.”

The Friday afternoon session included a discussion of “Bleeding You Dry:  The Court’s Misuse of Injunctive” by Thomas Woolsten, founder of Mercexchange and main inventor of 30 patents. He said, “The current system provides strong incentives for patent infringement.  No patent of importance is going to get to the injunctive stage.”

The highlight of the afternoon was “The Great Debate: PREVAIL, PERA, and New Legislation.” Moderated by Paul Morinville.  The panelists were:  Judge Paul Michel, Scott McKeown, Rudy Fink, and Steve Daniels. Judge Michel said, “About 50% of American venture capital is now going overseas to China and other countries…The anti-patent lobby is very large and well-funded.” He supports PERA because “it takes the courts out of the issue of eligibility and solves 80-85% of the problems with patents.”

S. 2140: Patent Eligibility Restoration Act of 2023 (PERA) introduced by Senators Thomas Tillis (R-NC) and Christopher Coons (D-DE) on 6/22/2023 was discussed in my article “Inventor Rights Still Being Threatened.”

S. 2220: PREVAIL Act was introduced on Jul 10, 2023 by Senator Christopher Coons (D-DE) – “A bill to amend title 35, United States Code, to invest in inventors in the United States, maintain the United States as the leading innovation economy in the world, and protect the property rights of the inventors that grow the economy of the United States, and for other purposes.”

Friday’s event concluded with remarks from Judge Pauline Newman, followed by a networking cocktail reception.

There isn’t enough space in this article to permit a recap of the topics covered at the Saturday event. The following topics were discussed:

“Does ‘Any” mean ‘Any’? Ask Alice” presented by Robert Greenspoon.

Why and How 97% of IP Portfolio Owners Destroy Most of their Portfolios” discussed by panelists Evan Langdon, Jack Lu, and Russ Genet and moderated by Steve Taylor

“How to Survive the Patent System” discussed by Jeff Hardin, Josh Malone and Paul Bartkowski that was moderated by Eli Mazour.

“New Solutions for New Problems:  Freezing Assets of Online Infringers on Amazon, YouTube, Facebook, and the Internet” presented by Joel Rothman.

The afternoon concluded with a discussion of “Advocating for a Stronger Patent System” by panelists Paul Morinville, Molly Metz, Cliff Maloney, Justin Greiss, and Randy Landreneau.

An awards ceremony and dinner took place that evening at the Holiday Inn Carlyle in Alexandria, VA where attendees stayed. Awards presented were:  Michael Kintner: The Inventor; Molly Metz: The Advocate; John Murray: The Warrior; Jeff Hardin: The Veteran.

In closing, Paul said, “We are honored to have such a significant turnout for our first event and incredibly grateful to our members, speakers, and sponsors for making this event possible. We have so much work to do, and I hope the event, discussions, panels, and presentations allowed USI members to feel empowered and motivated to enact change.”

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Are Southern California Trade Shows Recovering from Pandemic Shutdowns?

October 3rd, 2023

There have been four trade shows in Southern California that I have either attended or participated as exhibitor this year. The first show I attended was the five in-one show, MD&M West, WestPack, ATX West, D&M West, and Plastec West held February 7-9, 2023 at the Anaheim Convention Center in Anaheim, CA. 

These shows take up all of the halls in the largest building of the Anaheim Convention Center complex.  Besides the several hundred companies exhibiting in the show, it also offers educational conferences held by the various trade shows concurrently with the show.

There were five free education stages on the show floor that provided in-depth discussions and instructions from industry experts on the latest need-to-know information for their industry. In addition, there were paid conference sessions in meeting rooms on the second floor.  I attended the IME West conference on February 8th and gave a presentation titled, “The Future of Manufacturing.” I discussed how manufacturing revitalization has been hindered by misperceptions, what is happening in our current period of creative disruption, and what vibrant opportunities exist now and in the future.  I also attended all of the other conference sessions held that day, and they were all well attended.   

When I walked the show on the 7th, it seemed to be as well attended as a pre-pandemic show.  The plastic molding company we represent, Hi-Rel Plastics, exhibited in the MD&M show and was happy with the quantity of their show leads, but the quality of the leads wasn’t as good as pre-COVID shows.

The second show was the Del Mar Electronics & Manufacturing Show held April 26th & 27th at the Del Mar Fairgrounds in San Diego County.  My company, ElectroFab Sales, has exhibited in the show since 1997, and this year, we had two exhibit booths featuring the fabrication services of four of the ten companies we represent.  I also gave a presentation on the first morning of the show on “How to Select the Right Processes and Sources for your Products.”

This show has an extensive free conference schedule both days of the show and also features a free reception at the end of the first day of the show which encourages late afternoon attendees to stay for the reception and skip the worst of rush hour traffic to go home. Another added benefit for attendees is free parking for the show.

We had very good traffic the first day of the show, and more traffic than some previous years on the second day of the show. The second day of the show ends at 3:00 PM so there is less time to collect show leads. We got about 50 leads from our exhibit which was about 30% higher than 2022.  However, there were very few leads from well-established or larger companies.  Most of the leads were entrepreneurs with new products or from small companies designing a new product. 

Show manager, Connor Good, told that the number of booths was up by 25% and attendance was up by 30% over 2022.  He said, “What felt like a long time coming the first year back after the pandemic, attendee numbers were promising. It showed us the industry is ready to get back to business and people are eager to network face to face.”

The third show of the year was the Design-2-Part Show, held September 13th & 14th at the Ontario Convention Center.  This show alternates between held in Long Beach, Pasadena, and Ontario in Southern California. The Design-2-Part shows have been held for 42 years and feature only American manufacturers; no reps or distributors are allowed to exhibit.  An average of 10-11 shows have historically been held around the country each year.

President, Rober Eichner, “We were even able to conduct a show in Texas in 2020 and conducted nine shows around the country in 2021 and 10 shows in 2022.  We have held 11 shows this year and 12 shows are scheduled for 2024.  Show attendance at many of the shows this year approached attendance levels of 2018 and 2019. We purchased the AMCON shows last year, so we plan on holding shows in Denver, CO and Novi, MI in 2024.  We also skipped doing the Santa Clara show last spring, but plan on being back there in 2024.”

This makes these shows the most efficient place to meet hundreds of high-quality American suppliers of custom parts, stock parts, and manufacturing services.

I attended the show on Thursday, September 14th to do booth duty for the rubber molding company we have represented for 29 years, Century Rubber Company.  My husband and partner had done booth duty at the show on the 13th.  He said the show was very busy the first day.  The second day is never as busy because it ends at 3:00 PM, but I thought it was busier than the second day of the Long Beach show in October 2022. 

The last show I attended was the Anaheim Electronics & Manufacturing Show held September 27th & 28th at the Anaheim Convention Center in Anaheim, CA.  

This show featured hundreds of companies exhibiting in the following categories:

  • Telecom Manufactures
  • Defense Contractors
  • Plastic and Rubber Molders
  • Medical Device Companies
  • Electronics OEM’s
  • Bio-Pharma Device Manufactures
  • Sports Products Developers
  • Coil Winding
  • Machine Shops
  • Castings
  • Sheet metal fabrication
  • 3D printing…. and More

This show is owned by the same owner as the Del Mar Electronics & Manufacturing Show and allows reps and distributors to exhibit. The same benefits of free parking and a free reception at the end of the first day of the show encourages show attendance.

I attended the show on Thursday, September 28th to walk the show and give a presentation at 1:00 PM on “How to Select the Right Processes and Sources for Your Products”

Assistant Show Manager, Connor Good, told me that the number of booths this year was up 30% from the fall 2022 show, and attendance the first day was 20% higher than the both days last year.  He said, “The show was held in the convention center’s newest hall, the ACC North. We tried to combine the easy going and stress-free environment of the Del Mar show with the professionalism and company dense area of Anaheim. We encouraged business development of all sizes and opportunities through free attendance and parking even if signing up on show day.”

There is one more trade show coming up in Southern California this fall

WESTEC/AeroDef

Tuesday, November 7 through Thursday, November 9

Long Beach Convention Center
300 East Ocean Boulevard
Long Beach, CA 90802

I have been to WESTEC many, many times starting in 1990 when I attended comprehensive technical sessions on manufacturing processes such as investment casting. The amount of time you spend there is well worth the effort. You can literally spend hours and not take in all that there is to offer.

WESTEC has been providing solutions to manufacturing challenges for 58 years. You can see more than 400 exhibitors, face-to-face, at WESTEC — all in one place, over a three-day period. WESTEC gives you face-to-face access to hundreds of experts in critical industries such as aerospace, medical, industrial machinery and consumer goods. You can find new manufacturing technology to make your vision a reality. The variation at WESTEC is vast. Here’s just a small sampling of what you’ll discover at WESTEC:  aerospace manufacturing, castings, forgings, CNC Machining, Waterjet, Advanced Materials, 3D printing, and much more.

WESTEC has manufacturing education sessions that focus on teaching you about new technologies, new processes, and trends that can transform your business. All show floor education is included with the show floor pass. Attendees come from a variety of industries including aerospace, medical, industrial machinery, automotive, and more.

You can sign up to attend at no charge at the official website  www.westeconline.com 

Trade shows are even more important than they once were because most large companies eliminated “vendor days” decades ago where sales reps could schedule appointments with buyers in their purchasing departments.  In addition, many buyers and even engineers are not back to working full-time at their offices and may still be working remotely from home two-three days a week, making it very difficult to connect with them.  Meeting a potential customer at a trade show is the first step in developing a relationship to become a regular vendor for a manufacturer.  Trade shows also provide the opportunity for inventors and entrepreneurs to explore the possible sources for parts, assemblies, and fabrication services for their new products.  Be sure to make it a priority in your schedule to attend a trade show next year.

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Inventor Rights Still Being Threatened

September 5th, 2023

During the 117th Congress (2021-2022), several bills were introduced with the purported purpose of restoring inventors’ rights and fixing some of the problems generated by that Act Leahy–Smith America Invents Act (AIA) of 2011. None of these bills were passed by both the House and Senate, and most didn’t even get out of committee for a vote. A few of these bills would have actually made matters worse, so it was a good thing they didn’t pass. Only one bill was supported by the top inventors’ group, US Inventor.

The bills not supported by US Inventor were:

S.2774 – Pride in Patent Ownership Act was introduced by Senator Patrick Leahy (D-VT) on  09/21/2021.  This bill looked good for either being passed by the Senate separately before Congress recesses for the holidays or passed by being attached to the National Defense Authorization Act (NDAA). The NDAA is “must pass” legislation funding the military at a time when there are credible threats of wars around the world. Attaching the Pride in Patent Ownership Act to the NDAA means it would certainly have become law. Fortunately, neither of these predictions came true.

S. 2891, The Restoring the America Invents Act, introduced by and Patrick Leahy (D-VT) into the Senate on September 29 2021 and referred to the Committee on the Judiciary, but was not voted on by the Senate before the end of the 117th Congress.

HR 5902, The Clear Patents Act, introduced by Representative Darrell Issa (R-CA) on 11/05/21 to the House. This bill was also referred to the Committee on the Judiciary, but was not voted on by the House before the final recess at the end of 2022.

S.4734 – Patent Eligibility Restoration Act of 2022  was introduced by Senator Thomas Tillis (R-NC) on 08/02/2022.  This bill was referred to the Committee on the Judiciary, but was not voted on by the Senate before the end of the 117th Congress.

The only bill supported by US Inventor was:

HR 5874, Restoring America’s Leadership in Innovation Act of 2021 (RALIA), was introduced into the House by Representative Thomas Massie (R-KY) on 11/04/2021 and referred to the Subcommittee on Courts, Intellectual Property, and the Internet. US Inventor supported this bill because it was “designed to restore to Americans a patent system “as the Constitution of the United States originally envisioned it.”

Representative Massie’s press release stated, “The RALIA legislation restores to Americans a patent system as the Constitution of the United States originally envisioned it,” said Congressman Massie. “In Article 1, Section 8 of the Constitution, the Founding Fathers gave Congress the authority to protect the discoveries of inventors. Specifically, they created a patent system to ‘promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.’  I am sad to say that this bill was also not voted on by the House before the end of the 117th Congress.

The above bills introduced in 2021 were discussed in more detail in my blog article, “Inventors Rights Must be Restored” published by Made in America Movement in January 2022.

What many people do not realize is that bills not passed by the end of the Congressional session, in this case the 117th, are considered “dead” and must be reintroduced in the session of the next Congress, which is now the 118th Congress (2023-2024).

Thus far, none of these bills have been reintroduced by their sponsors, but one of the bills introduced in the 117th Congress has been re-introduced recently.

S. 2140: Patent Eligibility Restoration Act of 2023  was introduced by Senators Thomas Tillis (R-NC) and Christopher Coons (D-DE) on 6/22/2023. The brief description states, “To amend title 35, United States Code, to address matters relating to patent subject matter eligibility, and for other purposes.”

The need for this bill was provided in the “Findings” section:

  1. “patent eligibility jurisprudence interpreting section 101 of title 35, United States Code, requires significant modification and clarification….
  • the Supreme Court of the United States and other courts created judicial exceptions to the wording of that section, thereby rendering an increasing number of inventions ineligible for patent protection…
  • Efforts by judges of district courts and courts of appeals of the United States to apply the exceptions described in paragraph (2) to specific circumstances have led to extensive confusion and a lack of consistency— throughout the judicial branch of the Federal Government and Federal agencies; and among patent practitioners…
  • Many judges of the United States Court of Appeals for the Federal Circuit and of various district courts of the United States have explicitly expressed the need for more guidance with respect to the meaning of section 101 of title 35…”

“Under this Act, and the amendments made by this Act, the state of the law shall be as follows:

(A) All judicial exceptions to patent eligibility are eliminated.

(B) Any invention or discovery that can be claimed as a useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, is eligible for patent protection, except as explicitly provided in section 101 of title 35, United States Code, as amended by this Act, as described in subparagraphs (D) and (E) of this paragraph.”

The statements describing what the bill will do sound good at first reading, but the “devil is in the details” of subparagraphs (D) and (E), as well as the amendments to Section 3 of the bill – Patent Eligibility.

This bill was reviewed in detail during weekly Zoom meetings held by US Inventor for several weeks after the bill was introduced in June.  These reviewers included retired judges, patent attorneys, and inventors.  As a result of this intensive review, US Inventor released a policy paper, titled “PERA Starts by Making Nearly All Inventions Implemented in Software Patent Ineligible:” 

“PERA abrogates all judge-made exceptions, including the abstract idea in its preamble (however,

not in the law), yet it introduces new exceptions disqualifying entire swaths of technology as ineligible for patent protection. An invention is ineligible if:

‘‘(B)(i) Subject to clause (ii), a process that is substantially economic, financial, business, social, cultural, or artistic, even though not less than 1 step in the process refers to a machine or manufacture.’

Nearly any invention can be categorized as economic, financial, business, social, cultural, or artistic. Most inventions implemented in software are claimed as a process. This extraordinarily broad language means that inventions implemented in software are ineligible for patent protection right from the starting gate.” 

According to the U S Inventors end of the year report, “The Patent Trial and Appeal Board (PTAB) has cancelled claims in 84% of the 2,500+ patents reviewed since 2011 and most inventors do not have a half a million dollars necessary to fund a legal defense.”

This is why US Inventor policy paper states, “PERA Must Remain a Vehicle for Section 101 Debate.

Judge-made law regarding Section 101 eligibility is severely restricting U.S. innovation, allowing our adversaries like China as well as others to take the lead in global innovation. This is severely damaging U.S. national and economic security.

Congress must fix Section 101 correctly. The influence of powerful lobbies must be leveled by arguing the merits of the legislation openly and transparently in Congress.

The authors of PERA must provide a clear and sound public policy justification for making such huge swaths of technologies ineligible for patent protection where there are no similar restrictions in other countries.

Once Congress agrees to a public policy position on Section 101, then the words of PERA must be precisely defined to ensure that the policy is effectuated in legislation, leaving no ambiguity for judge-made law to override it.”

The paper concludes, “For the foregoing reasons, US Inventor opposes PERA as written, but PERA should not die. It presents a valuable opportunity to initiate open and transparent debate in Congress so that the U.S. public policy regarding patent eligibility can be properly formed, and legislation can be crafted to effectuate that public policy.”

If you support patent rights you can sign the Inventors’ rights Resolution here.  You can also join US. Inventors as a supporting member here.  If you have the time, you can also attend US Inventor’s first annual conference in Washington, D.C. on October 19-21, 2023 to celebrate years 10 years of work.  There are over twenty confirmed speakers, and the plan is to bring you an event full of presentations, panel discussions, and plenty of networking opportunities. The tickets include access to all presentations, discussions, and informative opportunities, as well as access to event receptions, breakfasts, and dinner.  More Details and Register: www.usinventor.org/usi-conference

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Southern California Fall Trade Shows Feature Made in America

August 22nd, 2023

Southern California offers two trade shows this fall for manufacturers to locate processes and sources to make their products.

The first show is the Design-2-Part Show, which is the region’s largest design and contract manufacturing trade show.  It features only American manufacturers; no reps or distributors are allowed to exhibit.  This makes it the most efficient place to meet hundreds of high-quality American suppliers of custom parts, stock parts, and manufacturing services. Over 300 service categories will be represented at this show.  From design and prototypes to production, finishing, and assemblies — you will find the answers you need at this show at the Ontario Convention Center in Ontario, CA. 

I will be at this show on Thursday, September 14th doing booth duty for the rubber molder we represent, Century Rubber Company. 

When:         September 13th & 14th, 2023

Hours:         Wednesday 9:30 am – 3:00 pm

Thursday 9:30 am – 3:00 pm

Where:        Ontario Convention Center

Ontario, CA

Cost:  Free Admission

Register here

The second show is the Anaheim Electronics & Manufacturing show to be held September 27th & 28th at the Anaheim Convention Center in Anaheim, CA.  

This show will feature hundreds of companies exhibiting including reps and distributors.

  • Telecom Manufactures
  • Defense Contractors
  • Plastic and Rubber Molders
  • Medical Device Companies
  • Electronics OEM’s
  • Bio-Pharma Device Manufactures
  • Sports Products Developers
  • Coil Winding
  • Machine Shops
  • Castings
  • Sheet metal fabrication
  • 3D printing…. and More

I will be attending the show on Thursday, September 28th to walk the show and give a presentation at 1:00 PM on “How to Select the Right Processes and Sources for Your Products”

Pre-register here and a Free parking voucher will be sent to you prior to the show.

Join our reception. September. 27th, 5-7 pm for munchies , drinks, and more! Converse and commingle whether you are an Exhibitor or Attendee stop in, enjoy. 

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How Could we Reduce Inflation and Balance Foreign Trade & the Federal Budget?

August 1st, 2023

We are now nearing the end of the second year of high inflation, and many are wondering why has it been so hard for the Fed to kill inflation.  Could the Fed improve the efficiency of its inflation fighting and avoid causing a recession? Could it do so in a way that balances both foreign trade and the federal budget?

“Yes” is the answer given by one of my fellow members of the Coalition for a Prosperous American, John R. Hansen, PhD, Economic Advisor, The World Bank (retd.) and Founding Director of Americans Backing a Competitive Dollar (ABCD), He wrote me that he believes the Fed could do all of this plus fulfill its mandate of economic growth with stable prices more successfully – and brighten the future for all Americans, both now and for generations to come with only a small policy tweak.”

He explained that “each of America’s ten recessions since the late 1950s has been preceded by inflation and significant increases in the Fed Funds Rate (FFR). Higher interest rates and tighter credit obviously increase costs and reduce demand for American goods resulting in inflation. Reduced demand reduces both output from U.S. producers and growth. By increasing the cost of doing business, higher Fed interest rates force businesses to reduce output and fire workers, leading to recessions.”

In his opinion, “today’s Fed faces a key challenge because when the Fed raises the Fed Funds Rate, inflows of foreign-source money dilute the Fed’s efforts to reduce the availability and increase the cost of capital. This makes it harder for the Fed to control inflation. Also, excessive stocks of domestic credit tend to reduce the Fed’s ability to raise banks’ lending rates by normal margins.

He added, “When foreign speculators buy up dollars, they raise the dollar’s exchange rate. This makes foreign goods cheaper than those produced in America, destroying demand for American products both here and abroad. U.S. producers find it increasingly difficult to compete with foreign-made goods and many may go out of business.”

Dr. Hansen has developed a solution to moderate inflows of foreign money to make the Fed’s traditional inflation-fighting tools more effective. — a Market Access Charge (MAC) “on any purchase of U.S. dollar financial assets by a foreign entity or individual. As a one-time charge, the MAC would discourage short-term investors, overseas private investors, and return-sensitive official investors such as sovereign wealth fund managers from excessive speculation and trading in U.S. dollar assets.”

He believes that the Fed “can efficiently and effectively use the MAC as a tool to fix the undervaluation of foreign currencies against the dollar. Implementing the MAC could eliminate the U.S. budget deficit, sharply reduce the threat of future debt-ceiling crises, and increase resources available for important industrial policy initiatives, especially those related to national security such as chip manufacturing.”

Furthermore, he wrote that “implementing the MAC would markedly increase the Fed’s ability to control inflation with higher interest rates and tighter monetary policies. With the MAC in place, the Fed’s efforts would no longer generate the massive inflows of foreign-source money inflows that today are triggered by high U.S./foreign interest rate spreads.”

The MAC would be a small fee that would be collected by U.S. banks on all foreign-source money seeking entry to America’s financial markets. The fee, which would be adjusted periodically to eliminate the spread between higher average U.S. interest rates and lower average foreign interest rates, would sharply reduce the speculative gains of foreign-source money. Last year, $90 trillion worth came into America’s capital markets, which was about four times GDP!

Dr. Hansen’s latest calculations indicate that “a 2% MAC charge – about half the spread between U.S. and foreign interest rates that is drawing in foreign cash and making U.S. goods and workers too pricy to compete internationally – would generate about $1.8 trillion of new net revenues per year out of the pockets of foreign speculators – enough to eliminate the U.S. budget deficit and to allow America to start paying down its largest-in-the-world national debt.”

Such revenues would have fully covered the $1.4 trillion deficit for FY2022 with $400 billion left over to support important services, cut taxes, and/or pay down the national debt. Fewer Fed interest rate increases would lower the cost of borrowing for the government. Implementing the MAC tomorrow might not save America from defaulting on its debt this year, but doing so would greatly improve America’s fiscal position, sharply reduce the risk of a recession, stimulate economies of scale, reduce inflation, and reduce America’s growing debt.

Here are a few of the many benefits that America would enjoy if Congress were to approve this trade policy initiative – a policy based on 21st century realities, not 18th century theories.

  1. Reduce the incentives of foreign countries like China and Japan to manipulate the value of their currencies against the dollar.
  2. Increase domestic and foreign demand for Made-in-America goods, thereby creating at least 3-5 million well-paying middle-class jobs, mainly in manufacturing and associated sectors.
  3. Trigger domestic and foreign investments in American manufacturing that would increase output and productive efficiency.
  4. Generate about ten times as much Government revenue per year as import duties on merchandise trade currently generate. And unlike import duties, the MAC would be paid by foreigners, not by people living in America.
  5. Be far more effective than tariffs in reducing overall U.S. trade deficits with countries like China. Tariffs can be evaded rather easily with a large number of widely known tricks like shipping through third countries, rebranding, and under-invoicing.
  6. Make it possible for the U.S. Government to implement important national security, infrastructure, environmental protection, and social investments without raising taxes or increasing the public debt.
  7. Reducing America’s debt service burden would further increase the Government’s ability to invest in high priority programs such as skills training, childcare, and other initiatives that would help the average American and increase America’s productivity without increasing the public debt.
  8. By implementing the MAC, America could roughly double its current rate of economic growth. The MAC would stimulate domestic production and exports while reducing our excessive dependence on imports.

Dr. Hansen and the Coalition for a Prosperous America believe that the MAC would be sufficient to discourage foreign inflows of investment with no material impact on foreign direct investment in factories and other directly productive activities. The MAC or something like it is urgently needed. Implementing the MAC would greatly improve America’s fiscal position, sharply reduce the risk of a recession, stimulate economies of scale, reduce inflation, and reduce America’s growing debt.  Our top priority today should be to protect our national security to remain a free country to ensure the well-being and safety of our children and grandchildren in the future.  

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What Would be The Benefits of the ONSHORE Act of 2023?

July 12th, 2023

The COVID pandemic proved that we cannot rely on imports of products needed to protect the health and welfare of Americans. Offshoring of manufacturing left the U.S. vulnerable to supply chain disruptions. We cannot defend our country if the products needed by the military and defense industry become unavailable because of being sourced offshore, especially in China. It’s time for all Americans to wake up to the dangers of being dependent on other countries for manufacturers goods, especially one that has become a threat to our country.

Strengthening domestic manufacturing capabilities, especially for industries of the future, is critical for economic and national security. We must forge a new path by rebuilding American manufacturing to win the international competition for good jobs, sustained economic growth, and rebuild a strong, secure domestic supply chain if we want to remain a free country.

I am glad to see that Congress is finally paying some attention to this need:  On June 8, 2023, Senator Mark Kelly (D-AZ), Senator JD Vance (R-OH), and Senator Tom Cotton (R-AR) introduced S.1915 – ONSHORE Act of 2023, a bipartisan bill to boost domestic manufacturing and strengthen supply chains that will help bring critical supply chains back to America by assisting communities of all sizes with the site development needed to attract manufacturing facilities. 

The joint press release states: “The U.S. faces a shortage of shovel-ready sites with the necessary infrastructure and workforce for companies to quickly begin construction on new manufacturing facilities. The ONSHORE Act creates a Critical Supply Chain Site Development Grant Program within the Economic Development Administration, which would assist communities, including small towns and tribal communities, with site development to attract manufactures from critical industries to build new facilities in their area.” 

Senator Vance stated, “As our nation takes the necessary steps to reshore critical supply chains and spur innovation, everyone in America should reap the rewards This bill would deploy capital broadly to ensure the foundations of tomorrow’s industry and growth are laid in underdeveloped regions. If enacted, it will deliver good-paying jobs, build vibrant communities, and strengthen supply chains—in Ohio and around the country.” 
 
Senator Kelly stated, “As we work to bring manufacturing supply chains for critical industries from microchips to critical minerals back to America, we have to maximize this opportunity by making sure there are enough sites with the infrastructure and workforce needed for new facilities. For a lot of small towns and tribal communities, the biggest barrier to attracting investment is the cost of getting sites ready for development. We’re working to fix that, which will boost manufacturing and create good-paying jobs in every corner of our states and the country.” 
 
Senator Cotton stated, “We cannot rely on other countries like China for our essential technologies. The technologies of tomorrow should be tested, researched, and made in America. This legislation will help make the necessary investments in our communities to make that possible.”

So far, the OSHORE ACT has received enthusiastic support from the International Economic Development Council (IEDC), the Global Business Alliance, the Greater Phoenix Economic Council, the Arizona Commerce Authority, and JobsOhio..

Nathan Ohle, President & CEO of IEDC said, “The ONSHORE Act will provide communities with essential resources to aid in attracting supply chain manufacturers. Economic developers across the U.S. will welcome this new initiative and IEDC urges the swift passage and implementation of the ONSHORE Act.”

Nancy McLernon, president & CEO of the Global business Alliance, said, “Site readiness is a critical consideration for international companies planning major investments in the United States… and urges all Senators to support this measure and other policies that make it easier to invest in America.”  

Chris Camacho, President & CEO of the Greater Phoenix Economic Council said, “The availability of shovel-ready sites with the necessary infrastructure and skilled workforce is a crucial factor in attracting companies to invest in Greater Phoenix and bolster U.S. supply chains. This program ensures that strategic mega sites and regionally impactful locations are properly prepared for new industrial investment. With enhanced site-readiness, the United States will be better equipped to compete globally, foster the growth of critical industries, and ensure the production of essential products domestically.”

Sandra Watson President & CEO, Arizona Commerce Authority, said, “We applaud Senator Kelly for leading on this important legislation. This ONSHORE Act will significantly strengthen U.S. competitiveness for new manufacturing opportunities, bringing more jobs and investments to Arizona.”

J.P. Nauseef, JobsOhio president and CEO, said, “I applaud the introduction of the ONSHORE Act, which will help Ohio and the rest of the United States more fully capitalize on this generational opportunity by expanding the number of sites that are ready to support major development projects.”

I can see that basic infrastructure, such as road access or water and power utility hookups, is an important factor affecting where a new manufacturing facility is built, but there are so many abandoned manufacturing sites throughout the country that I question the need for the Economic Development Agency’s Critical Supply Chain Site Development Grant Program. There are also large retail stores, such as former K-Mart stores, that could be converted to manufacturing sites by remodeling and changing zoning. The redevelopment of these sites would provide good opportunities to revive the industrial base of states hard hit by offshoring, such as Michigan, Ohio, and North and South Carolina.

In my opinion, there is a greater need for a new type of Small Business Innovation grant program to fund establishing manufacturing plants to manufacture components and systems that are no longer made in the U.S. because of being offshored to China and other Asian countries.  This type of grant would also provide new industrial investment, including in rural and tribal communities, and regions with high unemployment.  These companies would help position the U.S. to compete against adversaries like China, boost domestic manufacturing, and build resilient supply chains. 

Priority for receiving such a grant should be given to proposals that would manufacture critical components and systems needed by our military and defense industrial base.  Semiconductors and batteries are not the only critical products that need to be onshored/reshored.  Components such as capacitors, resistors, inductors, transformers, connectors, and flex circuits also need to be returned to being made in the USA.

This kind of investment will better position the U.S. to compete against international competitors like China and the European Union and ensure more critical products are made in America.  

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Congress Must Stop Abuse of De Minimis Imports

June 20th, 2023

When you order a product online without country-of-origin information being provided, the product may be sent directly to you by a company in a foreign country.  If the product is under $800 in value, it isn’t inspected by Customs & Border Protection (CBP) and no duties or tariffs are charged. How does this happen?

A White Paper, titled “Trade and Tariffs” on the website of the Coalition for a Prosperous America explains: “De minimis imports are the gateway for every fly-by-night foreign vendor to ship directly into the United States. When a package receives de minimis treatment, it arrives without the need of a customs broker or bond, without paying any tariffs or taxes, and without meaningful possibility of regulatory oversight.” [“de minimis” is Latin for “too trivial or minor to merit consideration.”]

The de minimis rule was added as Section 321 to the Tariff Act of 1930…The 1938 Congress set low-dollar thresholds for three different importation scenarios, assigning a $5 threshold for bonafide gifts and personal effects travelers brought with them, and a $1 de minimis for any other situation…There are three types of import situations covered by De minimis:

  1. ‘Bona fide gifts’ mailed to Americans from their friends and family abroad
  2. Articles accompanying travelers from abroad for household use
  3. A “catch all” anything else provision to ensure no undue burden was spent.”

The law’s opening line states its purpose: “to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected.” It was meant to serve as an administrative tool to ensure that customs officers aren’t forced to do assessments on low-value goods which would end up costing the government more money than they would generate.”

“ For regular imports, the law requires importers to provide Customs & Border Protection (CBP) an advance manifest of the incoming cargo describing it. But de minimis shipments, including millions of e-commerce packages, typically arrive with no advance information. The information scrawled on the packages is often incomplete and unverifiable. CBP has to process a whopping 2 million of these shipments daily and does not have the capability to detect and seize illicit and dangerous goods.” Goods eligible for de minimis treatment enter the U.S. free of duties and taxes.

For most of Section 321’s history, the lowest threshold of $1 only rose to $5 by the 1990s. However, de minimis was increased to $200 by Congress in 1994, and in 2015, Congress raised the de minimis threshold to a whopping $800 after intense lobbying by express consignment companies like FedEx and UPS and e-commerce sites like Amazon and eBay. In comparison, China’s de minimis is 50 yuan, which is less than $8 USD.

The CPA paper states, “The predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs. Our permissiveness is also causing lawlessness at the ports, allowing a tidal wave of counterfeit and dangerous goods to flood in.”

Not only are U.S. companies and workers subjected to a new level of job-destroying competition but dangerous illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection.

In 2022, the U. S. had a trade deficit with China of $382.9 billion up from $353.4 billion in 2021, but down from a high of $418.2 billion in 2018. The question is:  If de minimis imports were counted, wouldn’t they increase our trade deficit with China?

The answer is “yes.”  On May 15, 2023, Jeff Ferry, CPA’s Economist, released an analysis that found that the impact of de minimis on the U.S. economy is large and getting larger.  Key findings were:

  • “Our new estimate puts de minimis China revenue last year at $187.9 billion.
  • The uncounted imports increase the actual 2022 U.S. goods trade deficit by 16% from $1.19 trillion to $1.38 trillion, representing some 8.3 million lost U.S. jobs.
  • De minimis imports are deeply damaging to U.S. manufacturing industry and U.S. brick and mortar retailers.
  • With the incursion of Chinese-owned retailers like Shein and Temu into the U.S. market, we may be witnessing a historic shift away from U.S.-owned e-commerce giants like Amazon.”

CPA has been urging Congress to fix the problem of de minimis by lowering the threshold back to $9 ($5, but adjusted for inflation). The good news is that some Senators and Congressional Representatives have listened to CPA’s statement of the problem and introduced bills that would partially rectify the problems caused by de minimis.

On Thursday, June 15, 2023, U.S. Representatives Earl Blumenauer (D-OR) and Neal Dunn (R-FL) introduced  the Import Security and Fairness Act in the House.  U.S. Senators Sherrod Brown (D-OH) and Marco Rubio (R-FL) introduced a companion bill of the same name into the Senate. The purpose of the bills is “to stop China and Russia from exploiting the de minimis threshold and require Customs and Border Protection (CBP) to collect more information on de minimis shipments.”

While these House/Senate companion bills don’t reduce the dollar value of de minimis, they restrict what countries are allowed to ship de minimis shipments.  The Blumenauer/Dunn House Act states:

‘‘(1) IN GENERAL. —An article may not be admitted free of duty or tax under the authority provided by subsection (a)(2)(C) if the country of origin of such article, or the country from which such article is shipped, is—

‘‘(A) a nonmarket economy country (as such term is defined in section 771(18)); and

‘‘(B) a country included in the priority watch list (as such term is defined in section 182(g)(3) of the Trade Act of 1974 (19 U.S.C.32242(g)(3))).”

According to an article titled, “Is China a Non-Market Economy?” datedApril 2, 2019  by Daniel Griswold and Danielle Parks of the Mercatus Center at George Mason University,  “The US Department of Commerce currently labels 11 countries as NMEs: Belarus, Georgia, the Kyrgyz Republic, the People’s Republic of China, the Republic of Armenia, the Republic of Azerbaijan, the Republic of Moldova, the Republic of Tajikistan, the Republic of Uzbekistan, the Socialist Republic of Vietnam, and Turkmenistan. In the past, some countries designated as NMEs were then converted to market economies (MEs), such as Poland (1993), Russia (2002), and Ukraine (2006).” This means that imports from China would not be admitted free of duty or tax.

With regard to the priority watch list or “Section 182 of the Trade Act of 1974…requires the U.S. Trade Representative to identify countries that deny adequate and effective IP protections or fair and equitable market access to U.S. persons who rely on IP protection.” China is the county that most flagrantly violates U. S. Intellectual Property rights, so is most certainly on the watch list.

On Wednesday, June 14, 2023 Senators Bill Cassidy, (R-LA), Tammy Baldwin (D-WI) and JD Vance (R-OH) introduced the De minimis Reciprocity Act of 2023 “to stop Communist China and other countries from abusing U.S. trade laws that allow small dollar imports into the U.S. duty free.”

Senator Cassidy’s press release states, “The bill would bar Chinese exports from entry via the expedited “de minimis” channel and reduce the threshold for duty-free imports into the U.S. to an amount that matches the threshold our trade partners use, ensuring reciprocity and increasing transparency at our borders.”

Additionally, “The De Minimis Reciprocity Act would also:

  • Exclude untrustworthy countries from using the ‘trusted’ de minimis channel. 
  • Only allow express carriers to facilitate de minimis imports into the U.S. to help better at stop counterfeits and fentanyl at the border.
  • Require more information on every package entering the U.S.
  • Use the revenue proceeds to establish a fund for reshoring industry from China.” 

While China may be the most egregious in taking advantage of de minimis shipments, we also have trade deficits with India, Vietnam, South Korea, and many other countries.  I am sure that uncounted de minimis shipments from these other countries would increase our trade deficits for those countries also.   I personally would like to see a much simpler bill that incorporates CPA’s recommendation of reducing de minimis shipments to $9 for every country.  In my opinion, this is the only fair, long-term solution.    

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Economic Indicators Report Reveals a Shrinking Middle Class

May 23rd, 2023

A long-time acquaintance of mine, Charles Shor, contacted me recently to inform me that he had founded a new non-profit organization, Blue Collar Dollar Institute.  Charlie has been a long-time reader of my blog articles, and we share a common concern — the shrinking middle class.  We also shared the same opinion of the main reason for the cause of the shrinking middle class:  the loss of higher-paying manufacturing jobs by American manufacturers outsourcing manufacturing to foreign countries, particularly China. 

We agreed that the problem is, “By offshoring much of our manufacturing base, the United States has developed a dependency on importing consumer goods, amassing debt in the private and public sectors, and relying on critical goods from abroad in times of crisis such as pandemics and wars.”

We both feel that the middle class is in trouble.  “The Blue Collar Dollar Institute aims to understand how the United States’ decision to subsidize foreign manufacturing is decreasing the size of our middle class, increasing the amount of Americans in poverty and catapulting forward the wealth in both the top 5% and foreign competitors.”

The Institute’s Mission Statement is: “The Blue Collar Dollar Institute believes that the United States cannot offer a middle-class lifestyle to a large majority of Americans without possessing a strong and vibrant manufacturing sector.  Our non-partisan mission is to research data, inform the public, and advocate for policy in order to help strengthen US manufacturing and goods-producing sectors. 

Prior to founding Blue Collar Dollar Institute, Charlie’s original foundation, The Charles Shor Foundation, collaborated with  Dr. David Perkis, Purdue Center for Economic Education, Krannert School of Management, to prepare a 200-page Economic Indicators Report.

Charlie encouraged me to contact Dr. Perkis, and we had a long conversation when I connected with him last week.  He explained that the report’s purpose “is to provide a picture of the economic and social wellbeing of the United States in comparison to five other industrialized nations:  China, Japan, Germany, South Korea, and Singapore… Special attention is given to the manufacturing sector due to its perceived ability to offer high paying jobs and to create additional jobs in communities.”

One of the most serious facts the report reveals is: “Since 1945, the percentage of jobs in manufacturing, construction, and mining has dropped from 40% to 14%, eliminating some of the highest paying jobs for high school graduates.”

The result is: “The dreams of Americans obtaining the basics of a middle-class lifestyle, such as owning a home, sending their kids to college, and obtaining affordable housing, have become more and more out of reach for the average household.”  I’ve seen this in my own family as my two adult children have not been able to buy homes in San Diego, CA.

The results of the research revealed that “Although the United States is still the world leader in total output, it has some dubious distinctions in comparison to the other countries of this study.” The other countries are China, France, Germany, Japan, South Korea, and the United Kingdom.  In comparison to these countries, the United States has:

  • The least amount of trade as a share of GDP
  • The largest trade deficits
  • The highest level of adult wealth
  • The most significant wealth inequality
  • The highest level of health care spending (without the best outcomes).
  • The largest level of military spending
  • The lowest GDP share of manufacturing

Needless to say, I only had time to read through the first 40 pages of the lengthy report, so I will only point out some key findings related to manufacturing and trade issues.

As I have written previously in my books and blog articles, the U.S. has trade deficits since 1976, so it was no surprise to me that the report states: “From 1992 – 2019, deficits in manufactured goods have totaled $16.3 trillion (2010 USD), with the bulk of the deficit occurring since 1992 ($15.5 trillion). Since 1992, our largest deficits in manufactured goods have been with China ($4.6 trillion) and Japan ($2.5 trillion).”

Another noteworthy point is “The United States is still the world leader in output as measured by Gross

Domestic Product (Figure 1). In 2019, GDP measured $21.4 trillion USD, compared to $14.4 trillion from its next closest rival, China.”


I’ve long said and wrote that manufacturing jobs are the foundation of the middle class, and if we lose sufficient manufacturing jobs, we will lose the middle class. The loss of middle-class jobs in the U.S. is demonstrated by the fact that “the United States is no longer the leader in average income ($62 thousand USD). That distinction belongs to Singapore ($101 thousand USD).” The result has been “Income inequality in the US has increased significantly over the past 50 years (Figure 10). Income growth for the lowest 60% of income earners fell from the late 1990s through 2015.”

This may be due to the fact that the percentage of jobs in producing goods went down from 39% in 1964 to 15% in 2019, while the percentage of jobs in services increased from 62% in 1964 to 85% in 2019.  The average non-supervisory wage of goods jobs was $944/week I 2019, while the services wage was $699. However, service jobs in retail paid even lower in 2019 —$594/week.

With regard to budgets and deficits, “Except for a four-year period at the end of the Clinton administration, the United States has run a national budget deficit every year since 1970…The governments of Japan and the US carry the most debt…Japan has managed to accumulate the largest government debt as a percentage of GDP, totaling 232% (Figure 22). The United States is a distant

second carrying debt just over 100% of GDP…However, total government debt does not tell the whole story as some may be owed to a country’s own citizens while some will be due to foreign entities. For

instance, of Japan’s 232% debt, 208% is owed to domestic entities with a small portion due overseas (Figure 23). Within our comparison group, the United States government maintains the greatest holdings of debt to foreigners (37%).” 

As I have written in previous articles, there is a relationship between budget deficits and trade deficits.  When a country is buying more imports than selling exports, this produces less revenue for the government, so the country goes into debt to pay its expenses.  We lost 5.8 million manufacturing jobs between 2000 and 2010, and have only added back 1.2 million manufacturing jobs from reshoring and Foreign Direct Investment.  If these manufacturing workers had to get service jobs, they would be receiving lower wages and thus paying lower taxes.  In addition, the higher percentage of workers being paid lower wages for a service job results in their paying less taxes, again reducing the government’s revenue.

The report also mentions the benefits of manufacturing for a town, region, state, and the country as a whole.  This is because

1) “Most goods can be traded anywhere in the world, creating more exports and

generating income from overseas, whereas services are typically limited to

local markets.

2) Manufacturing positions create more additional jobs in the local community

than do service oriented positions. This is the multiplier effect of manufacturing.”

The report explains, “Job multipliers indicate how many total jobs will be created within a region due

to a new position in a particular industry.”  The job multiplier effect for manufacturing jobs ranges from 2.2 to 4.0, whereas the multiplier effect for service jobs ranges from 1.3 to 1.9.

The goals of the Blue Collar Dollar Institute to have strong manufacturing, construction, and mining sectors would help middle-class households have a prosperous life in the following ways: 

  • “By creating high-paying jobs for individuals without a college education. 
  • By selling more products overseas than we buy overseas, bringing net funds into the country. 
  • By making our nation less dependent on foreign countries for critical goods in times of crisis such as pandemics and wars, thus reducing risk for the average American.”

I look forward to continuing my discussions with Dr. Perkis to explore ways in which Industry Reimagined 2030 can collaborate to achieve the goals we have in common, such as adding 5 million middle-income manufacturing jobs and $1 trillion to the economy by 2030.

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