Posted on 04/26/2012 10:52:20 PM PDT by Steelfish
April 26, 2012 U.S. Firms Add Jobs, but Mostly Overseas
BY SCOTT THURM
Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.
Those companies, which include Wal-Mart Stores Inc., International Paper Co., Honeywell International Inc. and United Parcel Service Inc., boosted their employment at home by 3.1%, or 113,000 jobs, between 2009 and 2011, the same rate of increase as the nation's other employers. But they also added more than 333,000 jobs in their far-flung—and faster-growing— foreign operations.
The companies included in the analysis were the largest of those ...
(Excerpt) Read more at online.wsj.com ...
You can't create a “level playing field” by imposing more big government restrictions, all you can do is further mess up the market mechanisms. The result of restricting imports from China will mean higher prices in the United States with no rise in income. The only institutions that gain are the government and American manufacturers. It doesn't help the Economy, production costs will rise, if the tariff applies to raw materials and intermediate goods. This puts further pressure on the price level and causes American production to decrease.
We need to quit strangling American business, not start strangling foreign business. If we really want to level the playing field we should consider lowering the corporate tax rate, and disbanding the EPA and OSHA. Getting rid of the minimum wage would help as well, I know that's extremely unpopular, but it would decrease unemployment.
Adding foreign workers is not going to count in the GDP numbers, or the jobs added numbers. If you want to make American companies less profitable so they have to lay off American workers go ahead and use the powers of our Leviathan government to make them stop, but you won't like the side effects. Oil is a great example everyone understand we can't just cut off the supply of foreign oil, without lifting restrictions on domestic production. The same logic applies here.
Tariffs are not restrictions.
The United States of America had import tariffs most of our long, world-leading history.
It is now, that we no longer encourage our own manufacturing, that we are rapidly collapsing.
Of Course, but they get a lot of help from the Pubbies too. Anyone subject to the US Tax Code is taxed on WORLD WIDE income, regardless of whether that income is taxed elsewhere - it must be declared and returns filed. For an individual, the first 75k is not subject to US tax, after that, you enter the wonderful world of double taxation of income. The US is one of, if not the ONLY nation to do this. This is why US Corporations move HQ's offshore - it protects income from sources outside the US while still maintaining some operations in the US. It is also why a lot of expats [not me!] choose to renounce - the benefit of remaining a citizen is far overshadowed by the tax burden, especially when the dollar takes a nose dive which suddenly "doubles" my "US income" without me having any material advantage.
American manufacturing has never been more heavily saddled with government regulations, taxes, and Union workers contracts than they are now. American industry has had many fears of being put out of business by foreign firms, beginning in the 1800's with the rise of England as a manufacturing power. Well as you know, it survived. Given the changes in technology, America may not be the most cost effective producers of lower tech manufacturing. Firms can do better with high tech manufacturing and the service industry. I would point out that manufacturing is still 20% of our economy, and given the rise costs of production in China is expected to rise again. I always find it baffling at best when conservatives support big government solution to any problem.
Do we have too many restrictions in the US? Of course, and the should be eliminated. That wont solve the problem though. Not as long as we allow nations with less then dubious standard and Companies that operate within them to dump thier junk in our markets.
Will costs go up? Sure. But all we are doing now is getting cheap prices on cheap goods and effectively dumping our waste NIMBY ...
It also is clear that simply imposing a tariff on Chinese goods won't help America's Economy, especially in the short run. TANSTAAFL being immutable, it is the Chinese citizenry currently bearing those costs you mentioned.
The sad truth on the slave labor is like the sweatshops of the early industrial revolution, they do provide a better (only in the extreme relative sense of the word)existence than being out of work and starving to death. Our companies provide the cheapest foreign aid. It's thanks to American companies, among others, that wages and incomes have been rising in China. As the excess supply is employed the wage rises, but the adjustment process is slow.
They don't call it the dismal science for nothing.
Simple - add the cost "savings" of not doing "X" to the price of the product as a tarif. Once the junk coming from Asia is no longer competitive from a price aspect - quality will become the determining factor.
It also is clear that simply imposing a tariff on Chinese goods won't help America's Economy, especially in the short run.
Sure it will - people will no longer just buy the cheap junk (especially because the price will increase but the quality will still be crap!) - thus the trade balance will shift back home which increases GDP and employment.
It's thanks to American companies, among others, that wages and incomes have been rising in China.
I could care less about that. It is being done at the expense of domestic manufacturing and that is wrong. Make them play by the same rules that a domestic company must or they can dump thier junk in some third world shithole ... It is not the duty of the unemployed American worker to ensure that Apple makes a profit selling i-whatevers, produced with child and slave labour, with no regard for the environment.
Wrong. Where there are pro growth policies, there is growth. Growth is something the federal government and the Federal Reserve will not allow until the people get angry and demand it.
When it comes to screwing the average productive American, the RNC is in partnership with the DNC.
Ok, suppose we have a plant in China that makes widgets, employs slave labor and pollutes to high heaven. How do we calculate what % or level of tariff on Chinese widgets? Do we assume the only reason Chinese widgets are cheaper are do to those factors?
Sure it will - people will no longer just buy the cheap junk (especially because the price will increase but the quality will still be crap!) - thus the trade balance will shift back home which increases GDP and employment.
You are forgetting the income effect. As you have noted the price will rise on goods currently imported which will increase the trade balance. However consumer spending will also be effected in the opposite direction. That rise in price is not accompanied by any change in income. That leads to a decrease in purchasing power and effectively a lower income. It is also worth noting this effect will primarily effect the low income consumers currently buying the lower priced goods. If I go to buy a widget and find the price is $2.00 higher, that's $2.00 I'm not spending on other goods.
In the long run I can see the argument that a tariff that takes into account the externalities will put the market closer to its true equilibrium. However, in the short run, because those costs are not passed on to consumer, the consumers are benefiting at the cost of the Chinese who actually bear those non-monetary costs. There will be a cost to changing that even if it's the best thing. If the income effect is larger than the trade balance effect then GDP will not increase and unemployment will not decrease.
A start would be to estimate the amount saved via the blatent disrard of basic human rights & environmental standards. Use international cost averages as a base. Then add a hefty penalty on top of that for said disregard!
Do we assume the only reason Chinese widgets are cheaper are do to those factors?
Of course not - China is nothing but an example case.
That rise in price is not accompanied by any change in income.
On the (very) short term - yes. On the short to long term - no! Domestic companies, in order to take advantage of the more equal playing field, will hire workers to fulfill demand, this will reduce exports and increase consumer purchasing - both of which reflect positively on GDP.
That leads to a decrease in purchasing power and effectively a lower income.
You are confusing monetary inflation with higher prices. Purchasing power diminishes when more money is introduced into the market via fiat (or credit), something we have been doing for over 30 years.
If I go to buy a widget and find the price is $2.00 higher, that's $2.00 I'm not spending on other goods.
True. However, once the domestic market, with it's built in competition takes hold, that widget will become less expensive.
Will Tariffs "solve" our problems? Of course not. But they will help bring things back in line - AND - will stop rewarding countries such as China for thier abuses ...
The thought is correct and explains the reason for increase in foreign employment. Growth
The China bashers have an Ameracentric view on everything and fail to consider the fact that employees are needed to start a company foreign operations or to grow a company that is producing for foreign domestic markets.
American companies abroad produce for foreign domestic consumption and not just for export or export at all
Excuse me? "Where there is growth in demand, there is a growth in employment!", that statement is wrong? Please provide some empirical evidence of your assertion that this widely accepted axiom is untrue.
Where there are pro growth policies, there is growth.
That sir, is wrong. There is no such thing as "pro growth" policies. There is only absence (or lack) of gevernment interference.
Growth is something the federal government and the Federal Reserve will not allow until the people get angry and demand it.
That is a silly statement. The government and the Fed want growth so they can continue to borrow. They are becoming desperate because all the old ways of faking growth are failing and the private sector is not growing (due to too much government interference!)
What is the ultimate source of demand? What does the government say it is?
That sir, is wrong. There is no such thing as "pro growth" policies. There is only absence (or lack) of gevernment interference.
Wouldn't a policy of less government interference be a pro growth policy?
That is a silly statement. The government and the Fed want growth so they can continue to borrow.
Really? How much money have they borrowed in the last 6 or 7 years of near zero growth, compared to the previous years where there was growth?
Why has the Fed wrongly claimed for decades that economic growth and wage increases are the cause of inflation and that inflation is the number one enemy of the economy?
That is not a refutation of my assertion.
Wouldn't a policy of less government interference be a pro growth policy?
Should we be thankful when our assailant promises to hurt us less? Does the act of cessation of harm on the part of the assailant mean the assailant now wants our wellbeing?
How much money have they borrowed in the last 6 or 7 years of near zero growth, compared to the previous years where there was growth?
Define growth! If you mean REAL growth, i.e. an increase in production / spending that is NOT funded by deficit spending - we haven't "grown" in a very long time. If you mean what the government says is growth at any on specific point in time, then we already have a problem with definitions.
But to answer your question, far more than they should have, but we have been living on deficits for over 30 years!
Why has the Fed wrongly claimed for decades that economic growth and wage increases are the cause of inflation and that inflation is the number one enemy of the economy?
Because the Fed had to have a scapegoat for it's own policies! It is the incessant borrowing over the last 30 years that have resulted in MORE money in the system, the very definition of monetary inflation.
So, do you care to finally defend your assertion that my statement "Where there is growth in demand there is an increase in employment." is wrong?
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