Just business

According to the Wall Street Journal, multinational corporations

cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That’s a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.[1]

Apparently most companies are reluctant to discuss the trend, but “‘As a greater percentage of our sales have been outside the U.S., we have seen our work force outside the U.S. grow,’ says Jim Dugan, spokesman for construction-equipment maker Caterpillar, which has added jobs more rapidly abroad than in the U.S.”[2] And,

Jeffrey Immelt, GE’s chief executive, says these cuts don’t reflect a relentless search for the lowest wages, or at least they don’t any longer. “We’ve globalized around markets, not cheap labor. The era of globalization around cheap labor is over,” he said in a speech in Washington last month. “Today we go to Brazil, we go to China, we go to India, because that’s where the customers are.” . . .

At some companies, hiring to sell or make products abroad means more research or design jobs in the U.S. At others, overseas hiring simply shifts production away from the U.S.[3]

It’s what I’ve suspected for a while. Having fully exploited the U.S. workforce, having promoted a race to the bottom in workers’ wages, and having run the “Main Street” economy into the ground, the U.S. no longer plays as large a role in multinational corporations’ plans. They are effectively writing the U.S. off.

And whether capitalist libertarians blame taxes or wages or regulations, people in this country are “external” costs that don’t appear in multinational accounting. The point of being a multinational is to combine the advantages—be they reduced labor costs, lax regulatory environments, or access to customers—anywhere in the world to maximize return on investment. It is to gain independence of any government and of any group of workers.

The data also underscore the vulnerability of the U.S. economy, particularly at a time when unemployment is high and wages aren’t rising. Jobs at multinationals tend to pay above-average wages and, for decades, sustained the American middle class.[4]

But I guess in the conservative frame of mind, that’s just business.[5] It’s something to think about if your home is among the nearly two million that have been foreclosed upon,[6] or if you’re among the nearly 24 million who would be employed if we were employing people at the rate attained at the peak of the dot-com boom, or you are among the over 20 million whom the Bureau of Labor Statistics counts as unemployed or as saying they “want a job now.”[7]

  1. [1]David Wessel, “Big U.S. Firms Shift Hiring Abroad,” Wall Street Journal, April 19, 2011, http://online.wsj.com/article/SB10001424052748704821704576270783611823972.html
  2. [2]Wessel, “Big U.S. Firms Shift Hiring Abroad.”
  3. [3]Wessel, “Big U.S. Firms Shift Hiring Abroad.”
  4. [4]Wessel, “Big U.S. Firms Shift Hiring Abroad.”
  5. [5]Thomas Frank, What’s The Matter With Kansas? (New York: Henry Holt, 2004).
  6. [6]“U.S. foreclosures 2009-2010,” USA Today, April 13, 2011, http://www.usatoday.com/MONEY/usaedition/2011-04-14-Mortgage-settlements_ST_U.htm
  7. [7]Bureau of Labor Statistics, “Table A-1. Employment status of the civilian population by sex and age,” April 1, 2011, http://bls.gov/webapps/legacy/cpsatab1.htm

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.