American Businesses Creating More Jobs Outside Of America Than Inside

DENVER - SEPTEMBER 02: Job seekers wait in line for a career fair to open on September 2, 2010 in Denver, Colorado. Hundreds of unemployed and underemployed Coloradans turned out for the event. The federal government will announce its monthly national unemployment figures on Friday. (Photo by John Moore/Getty Images)

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Robert Scott, chief economist for the Economic Policy Institute, but I think that’s a rather shallow analysis. Outside of cronyism and other sorts of convenient government/business incest, what’s good for American companies is what’s good for the American economy.

If American companies couldn’t cut overhead by outsourcing parts of their businesses to countries with cheaper labor pools and friendlier tax/regulatory environments how much more would the goods and services American citizens buy cost? How many more American jobs would be lost if these companies couldn’t hold down costs during time of recession?

The answer to both questions is “a lot.”

Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — just maybe not in your town. They’re hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute’s senior international economist.

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Scott.

I know that “corporate profits” is a dirty word in some circles, but profits mean healthy businesses. Healthy businesses mean jobs and commerce. Without these companies holding down overhead and turning a profit America would be worse off economically than it already is. And don’t forget, all the investors and pension funds, etc. that are invested in these companies have an interest in seeing profits as well.

But if the protectionist crowd that sees outsourcing as bad for America really want to fix things, then let’s cut America’s second-highest-in-the-world corporate tax rate. Let’s scale back some of the unnecessary and overbearing business regulation our federal and state governments have pushed onto American businesses. End laws that give unions unfair advantages over businesses (not to mention workers who don’t want to join the union).

If we want to keep these companies from moving part or all of their operations overseas then we should get the government and the unions to stop pushing them overseas.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • borborygmi

    Proud of you Rob, at least you didn’t call for everyone to make $10 a day. Of course there are American Jobs created on the import end dock workers, transportation etc. The comparison between how many import jobs gained vs manufacturing jobs lost would have to be made. The next question would be if you cut corporate taxes to the bone how much of that savings would go towards establishing American manufacturing jobs. Is it enough to offset cheap labor +shipping costs?

    • http://sayanythingblog.com Rob

      Why are you so concerned about manufacturing jobs?

      It’s that exact sort of myopic attitude that is so harmful to our economy. You want to see it manipulated with policy to reach some sort of desired outcome (manufacturing jobs in this case), but those manipulations actually make things worse.

      Jobs are jobs. If you want more jobs in America, then get government out of the way of those who create the jobs.

      • borborygmi

        Types of Job, Service ( low paying, except for gov’t), Medical (high paying need higher education), Technical (middle to higher pay need technical training at the very least and many won’t even look at you unless its 4 year higher ed), skilled labor (most of them in the manufacturing sector) farm machinery, pipe, wind energy, auto and most some sort of skill training middle to high pay.
        Now unless prices come down drastically a bunch of jobs in the service sector are not going to drive the economy. Now combine that with your anti higher ed, anti minimum wage and now anti manufacturing what kind of jobs are you looking to create.
        Woof mentions below about the tax shelters that many large corporations take part in. . If they already have tax breaks where is the translation into jobs? You can drop regulation but that brought about manipulation , think Enron, and way back monopolies which kept prices up by artificially controlling competition and supply. Profit is good but there is a fine line between profit and greed.

        • http://sayanythingblog.com Rob

          Job is a market like any other. The more jobs there are the more there is competition for workers and the higher wages go. Types of jobs are irrelevant. The economy will create the jobs needed to provide the goods and services in demand.

          If you want prosperity in America then get the government off the back of those who create the jobs. It really is as simple as that. Even if you were right about manufacturing jobs being more important than any other type (and you’re really not), what’d driving those jobs overseas?

          Big government and big labor.

          Fix those problems and the jobs will stay here.

          • borborygmi

            Labor costs are alot less over there. Couple that with minimun compensation, no workers comp, little if any workers rights, little if any control of enviromental toxins from manufacturing, and poor working conditions, yep it is alot cheaper over there. The labor pool is so large it is economical to uproot the factory and retrain workers instead of paying them more when they get uppity. If prices (which are most likely gov’t controlled ) were lowerered over here, if we decided workers safety isn’t a big deal, if we really didn’t care what we dumped into the air, water and land, manufacturing would come back. Is that really what you want people living and working under those conditions? Of course this is all relative and there really isn’t a way you can compare the work and manufacturing enviroments between the say China and the USof A

          • http://sayanythingblog.com Rob

            We could undo a lot of government regulation without it resulting in rampant pollution and worker abuses. But if that’s the fallacies you want to use to shield your rather vapid position from criticism, go right ahead.

            We live in a global economy these days. We can either recognize it and adjust or fail.

          • borborygmi

            Yes we can but we would never get down to the level that the competition is which does allow both so there would be no jobs coming back in the forseeable future. So the fallacies are on your side.
            One of the arguments for Nafta was that the if we bring them up to our standards then the playing field would be evened and we would see an increase of jobs in the US or a least a stoppage of bleeding of jobs overseas.. In the long run this will probably happen (at least 25-50 years) but it has cost us jobs in the US. in the short term.

          • http://sayanythingblog.com Rob

            The problem is that you’re basing your opinions on flawed economic thinking.

            You hear of outsourcing and only think of the jobs that aren’t here any more. You fail to recognize the stimulus of cheaper prices for goods, and the jobs those bring.

            Outsourcing is a net gain for the country.

          • borborygmi

            The jobs that replace will be lower paying in the retail or service sector. You may gain some in the import/transportation which will be higher pay. Making that sort of wage you either work two jobs or need two sources of income. Also alot of those positions carry no benefits, so now money has to go for insurances. Less money to spend means less discretionary so frills will be curtailed which would affect hospitality and entertainment industries. I would think that at the very least in the short run it will be a draw or loss but you will still get to by your undies for less money at Walmart.
            … It is funny that people complain about people in the gov’t produce nothing yet you could care less if the US produces anything.

          • http://pulse.yahoo.com/_4RKUEHF3NG2Z32RT4B5A3Y7HUE Kenny

            Except there is nothing wrong with the service sector. Service jobs tend to pay better and have better benefits.

            Ask an average parent if they would prefer their kid be a computer repairman, or pick wheat. Would a doctor be better, or someone who sews shoes together all day long? Mechanic or someone who pours metal into molds to make screws?

            The answer is pretty obvious.

            Most of the jobs that we whine that we “outsource” aren’t terribly glamorous or high end. And the idea that we’re replacing all our good jobs with McDonalds or Dollar Tree jobs doesn’t make sense even without the numbers that prove it wrong.

          • http://pulse.yahoo.com/_4RKUEHF3NG2Z32RT4B5A3Y7HUE Kenny

            Well, and how much less of that outsourcing would we have if it wasn’t for endless regulations and taxes in place? While most people look at someone making 10 dollars an hour, and see someone who costs a boss 10 dollars an hour…that’s not how business looks at it. They see someone who makes 10 dollars an hour, plus their contribution of social security, plus unemployment insurance, plus workman’s comp, plus benefits, plus regulations, plus paperwork, etc etc etc.

            Something the left never seems to get.

  • WOOF

    How American are these companies?
    “GAO, searching publicly available data filed with the Securities and Exchange Commission, determined that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors maintain subsidiaries in countries generally considered havens for avoiding taxes.”
    The tears of the business crocodiles, crying for shelter from taxes.
    Demanding the protection of American might.

    • http://sayanythingblog.com Rob

      Businesses have a duty to keep overhead as low as possible. If they can do so with tax shelters, good on them.

      We should lower taxes so that tax shelters are unnecessary.

      • WOOF

        This isn’t about shelters it’s the magic of listing profits at post office letterboxes overseas
        and expenses as domestic. Magically there is no US income.
        Don’t try that at home kids.

        The formula for becoming Ireland.
        “We should lower taxes so that tax shelters are unnecessary.”

        We should see that everyone pays their fair share.
        What would you bill Exxon for the warships in the Persian gulf?
        Exxon paid NO, Nada , ZERO tax in 2009.
        Halliburton for improving Iran’s nuclear industries.?

        • http://sayanythingblog.com Rob

          Exxon paid NO, Nada , ZERO tax in 2009.

          Well that’s not actually true at all.

          http://www.politifact.com/truth-o-meter/statements/2010/dec/10/bernie-s/bernie-sanders-filibuster-exxon-mobil/

          It’s hard to debate with you when you don’t actually know what you’re talking about.

          • WOOF

            Politifact article is camouflage.
            Trust us..
            “The company declined to provide documentation for this number”
            “These numbers are not necessarily totals actually paid ”
            Trust us.

          • http://sayanythingblog.com Rob

            It’s called privacy. Exxon is a private concern, and we don’t live in a dictatorship.

            But if that’s how you feel, go ahead and post PDF’s of your tax returns so we can all make sure you’re paying your fair share of taxes.

          • http://pulse.yahoo.com/_4RKUEHF3NG2Z32RT4B5A3Y7HUE Kenny

            Those two quotes are exceptionally dishonest Woof, as they do describe the numbers and analyze in great detail.

            “According to the 10-K, ExxonMobil remitted $6.3 billion in sales taxes, $110 million in state income taxes, and $1.5 billion in “other taxes and duties.” All told, the company’s tax liability according to its 10-K was $7.7 billion. (These numbers are not necessarily totals actually paid but derived using generally accepted accounting principles.) And that only counts taxes paid in the U.S. It paid an additional $70 billion-plus in taxes to foreign governments in 2009, $15 billion of which was for income taxes”

            “Still, while focusing on the negative-$156 million figure and saying that the company “paid zero in taxes” in 2009 was eye-catching, it is, at best, misleading. And it ignores the fact that the company paid hundreds of millions in state income taxes, sales taxes and other types of taxes. We can’t verify the company’s claim that its net tax was $500 million in 2009, but it’s incorrect for Sanders to say “paid zero in taxes.” We rate his claim False. ”

            And when it talks about the negative 156 million number:

            “For instance, the liberal Center for American Progress quoted Jeffers saying that the company’s tax figure for 2009 was heavily influenced by a holdover tax issue from 2008 that was technically recorded on its 2009 books. “ExxonMobil was required to bolster its pension plan by $3 billion when the market went down in 2008,” wrote CAP’s Sima J. Gandhi. “This overpayment reduced the amount of taxes owed in 2008, but the tax adjustment wasn’t made until one year later, which led to an overpayment and the refund in 2009.””

            So it was a refund from overpaying taxes the previous year, and therefore was something they deserved? Wow, way to go, Woof!

  • ellinas1

    Greece has no manufacturing jobs to speak of. Mainly service and public sector jobs.
    They are broke.
    Want to follow their example?

    • http://sayanythingblog.com Rob

      Greece is broke not because they have the wrong kind of jobs but because they have the wrong sort of political leadership.

      They should stop spending more money then they have. Then they wouldn’t be broke any more.

      • ellinas1

        It was conservatives like you that spent Greece to oblivion.

        • robert108

          You lie again, princess. Conservative Americans are not the spenders you commies are. Whatever greeks regard as “conservative” is not even remotely related to American conservatism. BTW, port is no conservative.

          • ellinas1

            Lentils cost $0.99 per pound, at the corner supermarket.
            Shelled walnuts cost $2.49 pound at the corner supermarket
            Nuts like you are a dime a dozen on SAB.

          • robert108

            the princess always gets her panties in a bunch when she gets smacked with the truth.

        • http://sayanythingblog.com Rob

          Greece’s problem was too much government. You may have called those responsible for that conservatives, but they were no proponents of limited government.

          • http://flamemeister.com flamemeister

            Simple as that.

          • ellinas1

            Nah! You don’t say!

          • ellinas1

            Rob Port says: “Greece’s problem was too much government”

            I say: No shit. You ain’t shitting me now, are you?

            What I said: ellinas1 4 hours ago
            “Greece has no manufacturing jobs to speak of. Mainly service and PUBLIC SECTOR jobs.
            They are broke”.

            You replied: Rob 4 hours ago in reply to ellinas1
            Greece is broke NOT because they have THE WRONG KIND OF JOBS but because they have the wrong sort of political leadership.

            And then the incomparable Mr Port says: Greece’s problem was TOO MUCH GOVERNMENT.

            PUBLIC SECTOR jobs are TOO MUCH GOVERNMENT sherlock.
            And you know why they had/have public sector jobs? Because the have no manufacturing base.
            They import more than they export, therefore no money left in the country.
            They have/had exactly what you are advocating for.

        • http://flamemeister.com flamemeister

          By definition conservatives cannot spend anyone into oblivion. It is quite possible for people who call themselves “Conservatives” to do so.

          • ellinas1

            By definition since the Reagan years the conservative motto was/is: “Starve the beast.”
            The beast being the government.
            Because if the “beast” was starved to death, them commie socialist tax and spend leftie Dumbocrats would have nothing to spend on their socialist programs.
            And starve the beast they did.

            PS: So we had no “real” conservatives in the US government (administration) ever.
            Because I don’t think anyone meets the criteria you set forth.

          • http://flamemeister.com flamemeister

            Yes ,,,,? Of course. ….? conservative ≠ Conservative conservative = fiscal restraint,
            Conservative = a political designation.

          • ellinas1

            That answers that.

          • borborygmi

            The old they couldn’t be real conservatives because real conservatives wouldn’t act that way.
            Neiman uses the same argument for Christianity. It is a flawless argument that can’t be refuted.

          • http://flamemeister.com flamemeister

            Not sure what you mean, but as I have commented elsewhere, the word conservative means, among other things, fiscal restraint. Conservatism with a capital “C” is a political label. There is equivocation going on here. “Spendthrift” simply is not part of the definition of “conservative.”

            It is not conservative to spend a country into bankruptcy.
            A Conservative can spend a country into bankruptcy. Unlikely, but possible.

            I know that this is simple-minded but, believe it or not, the difference has been confused in some comments on this blog.

      • ellinas1

        Greece must pay to import everything.
        Where are the money to pay for stuff is going to come from?

        • robert108

          Try producing value and shedding your dependency on other people’s money. I recommend personal freedom, personal responsibility, and a free enterprise economic system combined with minimal govt. Stop whining and get to work.

          • Neiman

            The fact is that liberals, wholly emotional beings, cannot agree because they cannot accept the reality that many people do not have what it takes, they/we will be failures in life for a variety of reasons and they insist that the State protect them from themselves. I agree with you, but I am only stating why liberals can never accept your point/rationale, their emotions will never allow it.

          • http://flamemeister.com flamemeister

            It’s arrested development, florid infantilism that gets more perverse with age.

          • Neiman

            I disagree: I don’t think we should arrest them or give their infants fluoride to drink or make them act perversely with old people. No, I am sorry you went too far!

          • http://flamemeister.com flamemeister

            Ever watch the movie Zorba the Greek? Might answer a few questions.

          • ellinas1

            Lima beans are a good source of protein.
            You should try them sometime.

  • tony_o2

    A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia’s middle class will equal those in Europe and North America combined.

    Other economists, like Columbia University’s Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.

    If you can manufacture the products in Asia with a better educated workforce, and then sell those products to a higher population of consumers, then what incentive is there to remain a U.S. company hiring U.S. workers? Maybe if we raise taxes (income taxes, healthcare taxes, cap-and-tax, etc.) they’ll stick around….. raising taxes is always the answer to our woes…..

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