Made in the USA? Not anymore: Levi's and Etch A Sketch are just two of the many 'American' products that are now made overseas. How will the increasing outsourcing of jobs affect workers and the economy in the U.S.?

• Author: Kahn, Joseph
• Position: Cover Story

Since it was founded by a German immigrant who began outfitting gold miners in San Francisco 150 years ago, Levi Strauss and Company has turned out more than 3.5 billion of the sturdy denim jeans that have become an American icon right up there with Coca-Cola, Hollywood, and baseball.

Across the country from Levi's headquarters in San Francisco, workers in Bryan, Ohio, a town of 8,000 in the northwest corner of the state, produced another American classic for 40 years: Etch A Sketch, a toy that has been entertaining children for generations.

And 200 miles away, in Chicago, Radio Flyer Inc. has been manufacturing its little red wagons for more than 80 years.

Now, however, neither Levi's nor Etch A Sketch is actually made in the U.S., and soon, metal Radio Flyers won't be either.

Three years ago, executives at Ohio Art, the makers of Etch A Sketch, decided to shut its U.S. plant and move manufacturing to China. Last fall, Levi's announced it was closing its remaining factories in the U.S. and Canada and shifting the work to suppliers in 50 countries in Asia, the Caribbean, and Latin America. And in March, Radio Flyer announced plans to move production of its metal wagons from Chicago to China, where its tricycles and scooters are already made. (Manufacturing of plastic wagons will remain in Wisconsin.)

Levi Strauss, Ohio Art, and Radio Flyer are examples of the many American companies--from small manufacturers to giants like Boeing and Microsoft--that are outsourcing jobs overseas, to countries where labor and other costs are lower than in the U.S. Since 2001, the U.S. has lost nearly 3 million factory jobs.

But it's no longer only manufacturing jobs that are moving (or being created) overseas. Technology has made it easier for many types of jobs to be located almost anywhere. As a result, thousands of software development and call-center jobs, for example, have moved abroad.

PAINFUL ADJUSTMENTS

Many economists argue that globalization benefits Americans by lowering prices on everything from health care and iPods to shirts and socks at Wal-Mart, and by allowing companies to use the money they save from outsourcing to create other higher-skilled, better-paying jobs in the United States; at the same time, they say, the countries gaining jobs benefit from stronger economic growth and greater stability.

But the experience of workers at Levi's, Ohio Art, and soon, Radio Flyer, shows that outsourcing can be painful for those directly affected by...