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Globalization of jobs

from David Ruccio

Once upon a time, the cheerleaders of globalization, like Matt Slaughter, could claim that “for every one job that U.S. multinationals created abroad. . .they created nearly two U.S. jobs in their [U.S.-based] parents.” As the following graph shows, that’s no longer the case. 

source

Over the past decade, U.S. multinational corporations—like General Electric, Caterpillar, Microsoft, and Wal-Mart—have been hiring abroad while cutting jobs at home.

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: 4.4 million in the U.S. and 2.7 million abroad.

In all, U.S. multinationals employed 21.1 million people at home in 2009 and 10.3 million elsewhere, including increasing numbers of higher-skilled foreign workers.

The ability of multinational corporations to shift production and jobs when and where they want—shrinking employment at home and abroad while increasing productivity or hiring everywhere or cutting jobs at home while adding them abroad—undercuts the position of U.S. workers and undermines the usual neoclassical dogma concerning the benefits of globalization.

All they’re left with is the argument that globalization makes consumer goods cheaper in the United States—which only works if anyone is left with a job to buy those goods.

  1. merijnknibbe
    April 20, 2011 at 9:00 am

    There is a little bit more to the graph.

    – Between 2003 and 2007, the number of jobs in the USA as well as in the rest of the world increased.

    – After 2007, the number of jobs in the USA declined with no less than 1,5 millions (7 to 8%), while the number of jobs in the rest of the world was more or less stable.

    – After the dot com bubble the same pattern is visible: a loss of 3 million jobs in the USA while the number in the rest of the world was stable.

    This means that we have to change the text: if we look at the situation after 2000 (not after 1999) the job loss in the USA was not 2,9 millions but 4 million, increase in the rest of the world was not 2,4 million but about 1,8 million.

    The differences are larger than implicated by the text. And there has been a very substantial net job loss (while the total number of jobs in the USA was stable in this period,somebody probably has calculated the number of jobs in ‘the rest of the world’ but I do at the moment not know about that). When it comes to jobs, multinationals have become much less important in the USA.

    Also, the number of jobs of USA multinationals seem to react much stronger to downturns than those of other companies (which might indeed wel be because of their multinational character)

  2. Alice
    April 20, 2011 at 10:04 am

    So which idiots was it that ran the US jobs market into the ground?

    Let me guess? Free market republicans looking after their rich mates. How do you do that?
    a) Step one – you turn bank managers into gods and give them the freedom to invest and bank anayhwre they like, and let companies go where they like and pay as little tax as they want.

    b) sit back and watch them make huge profits in the global economy, divert said profits to no tax jurisdictions, whilst the middle classes and lower classes in the US lose their jobs and their economy is crashed into a brick wall, head first.

    Nice one and we dont have to think too long about why inequality has gone through the ceiling in the US do we?. Because some have done very nicely out of free markets ideas.

    Freedom is just another word for no tax to pay.

  3. August 21, 2013 at 9:43 am

    it is my wish one day that America will once again sit atop these charts and hopefully one day soon our government realizes that we need to start domesticating our labor force once again. outsourcing of all of our work is changing how Americans are coming up and are you getting more lazy and more lazy by the minute!

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