Furniture

Policy

This section reviews relevant policies that impact the furniture industry at the state, national and international levels. Policy focus areas include the labor market (ranging from workforce development to health and safety), industrial development, economic development and international trade.

Overview

Over the past two decades, the North Carolina furniture industry has faced difficult production location decisions. Lower production costs abroad make global manufacturing attractive to many companies. Foreign countries are strengthening their capabilities and increasing their hold on various segments of furniture manufacturing, particularly after China's entrance into the World Trade Organization (WTO) in 2001. Several Southeast Asian countries, notably Vietnam and Malaysia, are emerging as new leaders in household wood furniture production.

The U.S. furniture industry is trying to increase the competiveness of U.S. production, in part by enacting tariffs and quotas. With the help of the American Home Furnishings Alliance, the nation's largest trade organization for home furnishings firms, the furniture industry is trying to increase communications and help create policies that will protect domestic manufacturing and retain local jobs while ensuring continued international competitiveness (1).

State-Level Policies

Workforce Development

While the surge in outsourcing and streamlined manufacturing methods have reduced costs for companies and in many ways made production more efficient, it has dramatically cut the number of domestic jobs in traditional manufacturing sectors. Programs to help workers enhance and re-interpret their skills are vital in helping North Carolina workers stay competitive and remain effectively employed in the growing and changing furniture industry.

Worker training is a key focus of the government, companies, educational institutions, and several independent programs as they strive to help North Carolina workers stay competitive in a growing and changing industry. Various programs are geared towards enhancing and especially re-interpreting worker skills into different contexts to remain effective and employed.

Government Assistance: State and federal governments have allocated funding for unemployment benefits and retraining programs in North Carolina, specifically to assist displaced textile and furniture workers. In 2002 and 2003, more than $4 million was awarded to the South Piedmont and Western regions of North Carolina through the National Emergency Grant and other subsidies. The grants assisted approximately 2,666 total workers by supplementing existing re-employment programs with job search assistance, job development, basic skill training and career counseling. The grants were part of the secretary's discretionary fund and were awarded based on the requests of state and local workforce investment boards (2).

Sector-Based Development Programs: In North Carolina, the workforce development system, recently rebranded from JobLink to NC Workforce, is an important support program for the unemployed. Local Workforce Career Centers and a new website (NCWorks Online) seek to connect job seekers with employers.

Community College Curriculums: Community college curricula have traditionally been instrumental in helping workers further their educations and upgrade their skills, especially at institutions such as Fayetteville Technical Community College, Catawba Valley Community College, and NC State Furniture Manufacturing and Management Center. However, funding and low student interest have reduced or eliminated many of these programs. After 65 years, N.C. State graduated its last group of students with a furniture focus in the spring of 2013, citing cuts in funding, reduced enrollment, and diminishing appeal of the furniture industry for students (3).

The North Carolina Community College System is another important resource for unemployed workers to pursue higher education and upgrade their skills. The fact that traditional manufacturing industries have not been creating many new jobs makes it necessary for workers to re-interpret their skills to remain relevant in other industries. The New and Expanding Industry Training Program (NEIT), the first of its type in the nation, is available to companies who are creating new jobs in North Carolina, operates through community colleges to provide customized job training.

Company Retraining Support: Companies also provide support to retrain workers and help laid-off workers find new opportunities. For example, Thomasville, a subsidiary of Furniture Brands International, supports and endorses the retraining programs offered by the government and offers outplacement services for workers. Thomasville believes that it is important to continue to maintain working relationships so that they can rehire workers as soon as the opportunity is available (4).

National Policy

Safety & Environmental Regulations

The Consumer Product Safety Commission dictates a number of standards that require company compliance in order to protect users from unreasonable injury (5). These include flammability standards for mattresses and upholstered furniture, limits on lead content in furniture paints and varnishes, and safety labeling for hazardous substances. The CPSC also has strict regulations regarding children’s furniture, especially with guardrails and safety labeling requirements for bunk beds, toddler beds, and cribs.

The federal government must approve the use of pesticides and toxic substances such as dyes and flame-retardants used in the furniture manufacturing and packaging processes (5) Further, they monitor and limit formaldehyde in composite wood products, including plywood, particleboard, and high-density fiberboard, to curb the release of harmful emissions (5). The Lacey Act, enforced by the U.S. Fish and Wildlife Service, was amended in 2008 to curb illegal logging and sourcing across borders (6).

Programs have been created to increase accountability and reward attention to environmental sustainability in furniture manufacturing. For example, the Business and Institutional Furniture Manufacturers Association’s rigorous “level” certification program assesses a company’s commitment to sustainability from multiple perspectives (7). The certification takes into consideration the product, the facilities, and the organization itself and scores these categories in terms of materials used, energy and atmosphere implications, human and ecosystem health, and social responsibility. Companies are awarded a level 1 through 3 conformance mark for their practices, and some NC companies, including Bernhardt, have been recognized.

International Policies

Trade

Anti-dumping violations for furniture have been enforced against China, Vietnam, and South Africa over the past ten years. Dumping is the act of a manufacturer in one country exporting a product to another country at a price below what it charges in the home market, or below its costs of production. Under U.S. law, anti-dumping duties are imposed by the Department of Commerce when foreign merchandise is sold in the U.S. at less than fair value, and when the International Trade Commission (ITC) rules that an industry was materially injured because of the imports. Among recent anti-dumping rulings are the 2008 rulings against China, Vietnam, and South Africa on innersprings, and the 2005 ruling against wooden bedroom furniture from China. Both cases resulted in extra duties charged on the items (8).

Softwood lumber dispute: The U.S. and Canada had a long-running trade dispute about softwood lumber “stumpage” fees collected for harvesting Canadian government owned timber. Softwood lumber is a key input into furniture, and the U.S. considered the below-market fees as constituting an unfair subsidy. The US collected anti-dumping and countervailing duties, but in 2006 an agreement between the two countries settled the issue. Under the agreement, Canada would voluntarily collect an export tax or reduce export volumes during periods of weak lumber prices for up to 9 years (8).

References

1. American Home Furnishings Alliance. "About AHFA". Retrieved March 11, 2014.
2. Pruet, E. (2002, April 2). “National Emergency Grant Will Aid Dislocated North Carolina Workers." Washington, DC: Department of Labor.
3. Combs, H. (2013, Feb. 25). N.C. State drops furniture focus as need fades away. Furniture Today. Retrieved March 14, 2014.
4. Tilley, T. (2004). Personal Interview. November 19, 2004 (Full Text).
5. National Center for Standards and Certification Information. (2012, revised 2013). A guide to United States furniture compliance requirements. Retrieved March 14, 2014.
6. U.S. Fish and Wildlife Service. (2008). Amendments to the Lacey Act.
7. Business & Institutional Furniture Manufacturers Association [http://www.bifma.org]
8. U.S. Department of Commerce. (2009). “U.S. Department of Commerce Industry Report Furniture and Related Products NAICS Code 337. ”