I’m convinced that we are in the midst of a jobless economic recovery: the stock market is up, people with money are spending it and corporations are making big bucks. But where are the jobs?
Ah, not in the USA. And this trend started years ago and is now picking up speed in what is a global economy. And we’re not going to turn back the clock. But folks, we’re in deep doo-doo, with unemployment and underemployment at levels way north of 10 percent, with American multinational companies investing in facilities and people just about everywhere but here, and with an education system that is failing to produce the skilled workforce necessary to compete in today’s economy.
And this isn’t just the rant of a pajama-clad citizen journalist. Here’s an excerpt from a really interesting and informative article on The Huffington Post, “Job Market Booming Overseas For Many American Companies“:
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.
American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated – think semiconductors and software, not toys and clothes.
Consider a company like Coca-Cola:
Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke’s 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.
The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years.
When I started working for BFGoodrich in 1970, one of the first articles I wrote for one of the company publications was titled “The Myth of the Multinational Corporation.” The point, as best I can recall, was that strong and profitable American companies regardless of where they were doing business would be good for the American economy, American workers and American stockholders and investors.
Well, it hasn’t turned out that way — especially from the standpoint of jobs, those high-quality, good paying ones that you used to find in Akron and elsewhere. And about the time I was typing — remember typewriters? — my article the CEO of Firestone, John Nevin, was warning that we were pissing away our manufacturing base and that the USA would not prosper as a nation of burger flippers.
This is a crisis facing all of us in the USA — and part of the problem is tied directly to our failed educational system. Here’s from The Huffington Post article:
Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.
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.
“We are not fulfilling the educational needs of our young people,” says Sachs. “In a globalized world, there are serious consequences to that.”
Yep, serious consequences — and deep doo-doo.