Thursday, July 25, 2013

Is Multinational Employment Shifting Back To US Employment?

One of President Obama's talking points in his speech on the economy is that MNC's are bringing jobs back to the US.  The most recent data on this subject, which only includes 2011, does not support that claim.  Moreover, the data do not include foreign jobs that have US firms have outsourced to contract manufacturers who are not employed directly by US firms.  Its understandable that the president would like to focus attention on a few companies that have created jobs in the US.  However, his decision to do so suggests that he has no intention of changing the dynamic that has been underway for many years.  MNC's make employment decisions based upon how it impacts their firms.  Honda, for example, employs workers in the US to assemble cars in the US because it is less expensive than shipping assembled cars, and because it conforms to a quota system that limits the number of cars that it can ship into the US. Its good business for Honda to do so.  US firms also employ workers in international subsidiaries when it makes good business sense.  US policies have little to do with their decisions.

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