So Who’s Adding Jobs In America?
From a study conducted by the Rhodium Group:
The authors of the report, Daniel H. Rosen and Thilo Hanemann of The Rhodium Group, estimate that Chinese firms in the United States have already created more than 10,000 American jobs. But despite an overall effective U.S. screening policy for inward investment, political interference threatens to divert legitimate and potentially beneficial investment deals.
Surging Chinese investment has triggered populist anxieties in the United States, just as Americans once feared economic domination by Japan. “Japanese investment in the United States during the 1980s was as controversial as China’s,” the authors say, “but in the following years, U.S. affiliates of Japanese companies invested hundreds of billions of dollars in the United States, and today employ nearly 700,000 Americans.”
Hyundai directly employs 4,000 people in the US, and indirectly employes 45,000 people when you add the dealership employees. Nissan employs 8,000 people in Tennessee alone. Nissan uses primarily US made parts in its cars and has three manufacturing facilities in the US. The company’s main design center is in the US as well. Faced with stiff import duties, China recently built a $1 billion Texas steel pipe manufacturing plant that employes 650 people. Foreign direct investment accounts for 5% of all private jobs in the US.
Meanwhile domestic multi-national companies have been trimming domestic jobs. From a recent Wall Street Journal article by David Wessels:
“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.”
Beezer here. Who knows all the dynamics involved here? My take is that US multi-national corporations (MNCs) are picking the relatively low hanging fruit offered by the developing Far East countries, primarily China and India. In the US, the MNC existing capacity is more than sufficient to supply domestic demand, particularly the lower demand caused by the financial meltdown three years ago. Because of this existing capacity, the US recovery underway is slow when it comes to hiring. Profits are skyrocketing but they don’t seem to be spurring much in the way of US jobs. At least not yet.