Multinational Corporations, in Collusion with Government, Offshore American Jobs

Big U.S. Firms Shift Hiring Abroad

Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization

April 18, 2011

David Wessel, Wall Street Journal Commentary - U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy. [They are also using cheap prison labor rather than high paid union workers].

The companies 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 [see graph below].

The data … 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. …

While small, young companies are vital to U.S. economic growth, big multinationals remain a major force. A report by McKinsey Global Institute … estimates that multinationals account for 23% of the nation's private-sector output and 48% of its exports of goods.

These companies are more exposed to global competition than many smaller ones, but also more capable of taking advantage of globalization by shifting production, and thus can be a harbinger of things to come.

With Jobs Czar under Fire, New Data Confirm Offshoring Trend by Multinational Corporations

April 19, 2011

The Lookout - In January, the White House appointed Jeff Immelt (pictured), the CEO of GE, as its "jobs czar," charged with finding solutions to America's unemployment crisis. Three months later, despite some positive signs, employment rates have barely budged, Americans are more pessimistic about the economy than they've been in a while--and Immelt is under fire amid news that GE reportedly paid no taxes this year.

And some new jobs data may not help things. The Wall Street Journal reports (sub. req.) that during the last decade U.S. multinationals reduced their domestic workforce by 2.9 million, according to Commerce Department figures. During the same period, those same companies increased their overseas workforce by 2.4 million. (Here's a chart that nicely lays it out.) As recently as the 1990s, things were different: Multinationals were adding jobs both domestically and overseas.

Worse, Immelt's own company may be a case study for the shift. As we've reported, the number of workers employed by GE in the United States fell from around 162,000 in 2000 to 134,000 in 2009.

When President Obama named Immelt to chair the President's Council on Jobs and Competitiveness, he said the GE leader "understands what it takes for America to compete in the global economy."

But some observers have expressed frustration at what they see as the White House's complacency on jobs. Last month, Christina Romer, the former chair of the White House Council of Economic Advisors, publicly slammed the Obama administration for what she called "shameful" inaction.

A coalition of progressive groups led by Russ Feingold, the former Democratic senator from Wisconsin, recently seized on the news of no taxes from GE to launch a campaign aimed at ousting Immelt from the jobs czar post.

U.S. multinationals are a crucial player in the economy. They employ about 20 percent of all American workers, and, according to the McKinsey Global Institute, account for 23 percent of the country's private-sector output. Since they're more exposed to global trends, they often point the way toward where the economy is going.