What Is That Giant Sucking Sound?

It is hard to believe almost 20 years have passed since Texas businessman Ross Perot shared a stage with Bush the Elder and a smiling Bill Clinton during the 1992 presidential debate (video below). Perot was there to argue against NAFTA and other "free" trade agreements that would send American jobs overseas. That was unacceptable as far as Perot was concerned. He told Americans that the "giant sucking sound going south" they were hearing was the sound of their jobs going to Mexico. Bill Clinton just kept smiling.

Fast forward to 2011. What is that giant sucking sound we hear today? The Wall Street Journal's David Wessel recently described the big whoosh in Big U.S. Firms Shift Hiring Abroad.

U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy.

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 trend highlights the growing importance of other economies, particularly in rapidly growing Asia, to big U.S. businesses such as General Electric Co., Caterpillar Inc., Microsoft Corp. and Wal-Mart Stores Inc.

There are a couple of interactive flash graphics you can look at here. Be sure to look at the one showing that of General Electric's 287,000 workers, 154,000 work overseas (53.7%). This is interesting in light of the fact that GE CEO Jeffrey Immelt is the head of the President's Council on Jobs And Competitiveness. In 2004 (to pick a year) GE employed 307,000 workers, 142,000 of whom worked abroad (46.3%). The WSJ reports that GE gets about 60% of its business overseas.

 
Jeffrey Immelt and Barack Obama in Mumbai, India. You probably didn't know that Immelt's job is to increase India's jobs and competitiveness — just kidding

Here's my favorite part of David Wessel's report.

Some on the left view the job trend as reason for the U.S. government to keep companies from easily exporting work overseas and importing products back to the U.S. or to more aggressively match job-creating policies used in some foreign markets. More business-friendly analysts view the same data as the sign that the U.S. may be losing its appeal as a place for big companies to invest and hire...

[My note: see my post Invest In America? Why Bother?]

The Commerce Department's summary of its latest annual survey shows that in 2009, a recession year in which multinationals' sales and capital spending fell, the companies cut 1.2 million, or 5.3%, of their workers in the U.S. and 100,000, or 1.5%, of those abroad.

Some on the left? Do mean old radicals like conservative Dallas businessman Ross Perot? Does this mean that anyone who opposes jobs fleeing the U.S. is some kind of communist? You can clearly see how the debate on offshoring has shifted between 1992 and now. You've got to be Karl Marx, Eugene Debs, or Chris Hedges to oppose Americans being sold down the river now.

We've got two videos. In the first Wessel talks about the offshoring data. In the second, Ross Perot refers to the "giant sucking sound" in 1992.

 

 

Comments

[sharonsj]

Do not forget that every time a Democratic senator tried to introduce a bill taking away tax credits for companies that outsource, the Republicans would vote it down.

Do not forget that the Republicans voted down taking away tax credits and subsidies from the big oil companies (despite the oil companies making billions in profits and paying no taxes).

It's the Republicans who love spending money on war and refuse to cut the defense budget, and won't tax the rich--thereby helping to create the deficit. Yet it's the Republicans who now say the rest of us have to make sacrifices, lose our jobs, or pay more in taxes to pay down the deficit.

But I can't blame everything on the Republicans when the Democrats are either complicit or too cowardly to stand up for the rest of us. A pox on all their houses.