Americans should not hold their breaths for multinationals to add more jobs in the U.S. — in fact, they are still shedding them in a relentless drive for efficiency.
In an article for USA Today, MarketWatch's Howard Gold
noted that U.S. employers have created almost 10 million jobs in recent years, but few of them have come from big multinationals like IBM, Pfizer and Hewlett-Packard.
Moreover, he noted, Commerce Department data show that multinationals, which account for one of every five jobs in the nation, actually slashed their U.S. head count by a net total of 875,000 jobs from 1999 through 2012.
"What they all have in common is a laser focus on the bottom line. That's why nearly half of all Americans don't believe the recession is over and many don't think their jobs are secure," Gold wrote.
For example, Caterpillar has cut 2,800 U.S. jobs since 2008 while hiring 8,000 in Asia. IBM has taken a machete to its U.S. workforce, cutting it from 105,000 to 83,000 since 2009, according to union estimates, even as Computerworld reported IBM now has 112,000 workers in India, compared with 6,000 in 2002. And Cisco Systems' U.S. workforce has been unchanged since 2009 while it has added 8,000 foreign jobs, he explained.
John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, said multinationals move jobs overseas because they need to manufacture and sell products in countries that have higher GDP growth than the U.S. does, such as India and China.
The multinational job cuts have come in both low-wage and higher-paying jobs, according to Gold.
A Harvard Business Review study estimated multinationals pay 25 percent more than the national average compensation.
"Because most giant multinationals are public companies, they're under pressure from Wall Street, hedge funds, and activist investors," Gold wrote.
While the August unemployment data showed a slight decline in the jobless rate, The New York Times
noted the figures obscured a bigger problem.
"A growing number of people — many in their prime working years — have simply given up on landing a job. . . . The Labor Department reported that the overall unemployment rate dropped slightly to 6.1 percent in August. But that improvement was mostly a result of Americans dropping out of the labor force, not of their finding work," The Times stated.
"The situation helps explain why so many ordinary Americans remain doubtful about the recovery, now in its fifth year."
took a much more optimistic view of the jobs picture, however, noting that economists expect the U.S. to bounce back in September with a 200,000-plus net gain in jobs. And they predicted the disappointing August results would be revised higher.
"August was definitely a blip," Ryan Sweet, a senior economist at Moody's Analytics, told MarketWatch. "All signs point to much stronger job growth."
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