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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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