What Doesn’t Destroy Jobs

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Democrats have gotten emotionally tied in a knot because they think U.S. companies are shipping all our jobs overseas, thereby jacking up the U.S. jobless figures. That’s the real reason for our staggering unemployment, they claim. Yet foreign affiliate activity “tends to complement, not substitute for key parent activities in the United States…” according to a study published by the Business Roundtable and the United States Council Foundation. The central role of U.S. multinational companies in underpinning U.S. economic growth and job creation is even more important today as the United States seeks to address the challenges presented by the current economic environment. Strong multinational U.S. companies that are able to compete effectively in foreign markets will be better positioned to help lead America out of recession,” the study said.

The worldwide operations of U.S. multinationals “are highly concentrated in America in their U.S. parents, not abroad” in their foreign affiliates….Foreign-affiliate activity tends to “complement, not substitute” for, key parent activities in the U.S. “such as employment, worker compensation, and capital investment.” Parent U.S. multinationals employed more than 21.7 million U.S. workers (versus 9.5 million at affiliates). That’s 19.1 percent of the total private-sector payroll.

Sure, America has lost some jobs to workers abroad. But what is either unperceived or unacknowledged by the Obama wizards is that hundreds of foreign companies are investing in America and in our workers. It’s called “insourcing.” Matthew J. Slaughter, professor of management at the Tuck School of Business at Dartmouth, says insourcing companies are equal to18 percent of all exports. “They pay an average of $73,000 per worker…They are knowledge intensive…and are precisely the kind of companies we need growing in the United States.”

So, what are barriers to their growth? Slaughter says foreign CEOs tell him U.S. business taxes are too high. The statutory business tax rate—at 35 percent—is one of the highest in the world. During the past decade, foreign direct investment (FDI) swelled by 82 percent to more than $325 billion. This resulted in insourcing of 5.3 million American jobs, or close to 5 percent of the nation’s workforce. That’s more jobs than Obama said he would create or “save” with any subsidized project.

As Andrew Liveris, CEO of Dow Chemical, said recently in an NPR interview, typifying many business leaders, “At stake is whether new jobs and industries take root in this country or somewhere else. In the United States, I not only have high taxes. Right now I have more regulations coming at me that are not fact-based, not science-based, not data-based. I actually don’t know what my costs are going to be in the next five years…uncertainty around the healthcare bill…uncertainty in the energy policy….”

Meanwhile, Obama–off-base as usual–dumps the blame for unemployment on industrial America.

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  • StephenD

    We need to encourage businesses to stay here or start up here (foreign businesses). To my simple mind, the easiest way to do that is removing the obstacles. These are defined by the businesses themselves. Taxes should be consumer based and flat with each INDIVIDUAL paying something like 22%. You want/need something? Pay 22% tax on it. Regulations should be as minimal as possible to safeguard the welfare of the public. Competition should be open across the board from state to state and country to country with the only restriction (see Regulations) to protect the public which can include tariffs and taxes on foreign companies/countries. I bet it wouldn’t take too much effort to see folks from around the globe once again vying for a piece of the American Pie.

  • mrbean

    Unquestionably, today’s crisis is complex, and to identify its cause is not easy. But the opponents of the free market are not interested in identifying the cause. Their aim since day one has been to silence the debate and declare the matter settled: we had a free market, we had a financial crisis, and therefore, the free market was to blame. The only question, they would have us believe, is how, not whether, the government should intervene. And when you look across the American economy, what you see is that the freer parts, like the high-tech industry, are the most productive, and the more controlled parts, like the automotive, banking and housing industries, are in crisis. Is this evidence that we need more government intervention or more freedom? A free market creates more jobs than can ever be filled,

  • tramky

    Of course Joe can't get another job. All the other clothing manufacturers have brought in the same machine, so Joe's skills are now outmoded & obsolete–his years of experience are now worth nothing in the employment marketplace.

    Joe worked with fabric and has no skills or abilities that will let him now become a design engineer to design a 'better machine.' Yeah, right.

    Of course, this happened when Joe was 55, so he is now unemployable. He is overqualified on the one hand, has no useful skills on the another hand, and is now too old to hire because, well, he's now old and will likely be ramping up on health problems, so no employer wants him loading down their group health plan with likely illness and health problems coming up as he ages. Nope, Joe is done, 10 or 12 years short of Social Security retirement.

    Ever wonder why the guys you see with cardboard signs with the phrase 'God bless!' on street medians at stoplights all look like they're in their late 50s?

    • Lady_Dr

      Listen tramky, Joe could learn to become a design engineer, or he could use his knowledge of textiles and clothing construction to become a salesman, or teach courses like textiles and sewing to younger workers or students in a trade school. He could also go in a totally new direction. With a computer, or even a library card (many libraries have no time limits on their computers until the schools let out), he could learn almost anything. That same library card could open all sorts or doors to him.

      I know because I've done it. I suggest you ask some of those guys at the stoplights – they are either pessimistic liberals like yourself or lazy bums who may be alcoholic, drug users (not addicts, just users) or whatever. And if the government is willing to give them a hand-out why should they bother to work – especially when you have instilled in them the idea that "government owes me".

  • CisscoKidd

    As Affirmative-Action is currently the hot fashion trend when it comes to the employment arena in the United States (as has been for the last 40 years as well), if and when jobs are created–just who is going to be earmarked for those jobs? As everybody knows, Affirmative-Action is based on racial preference. That is, when it comes to employment and educational opportunities in the United States, minorities receive special preferences for those opportunities under Affirmative-Action. The white man does not receive any preferences whatsoever with Affirmative-Action. El nada, numero zilcho, del cero. Because of Affirmative-Action, the subject of jobs and job creation has become something that is basically laughable these days. What a scam! Not only that, the Affirmative-Action scam has become a normal and accepted element of society. Which means, racial preference has become a normal and accepted element of society. I have a feeling this may not be what equality is all about.

  • Ghostwriter

    Ironically enough,I watched "60 Minutes" last night and surprisingly they ran a story similar to what your saying. In some ways,it's veiled criticism of the Obama Administration's economic policies and what they did to this country. It's not often you see that sort of thing on the network news.