US multinationals (MNCs) cut their workforces in the
US by 2.9m during the 2000s while increasing employment overseas by 2.4m,
new data from the US Bureau of Economic Analysis show. In the previous decade, MNCs added 4.4m in the
US and 2.7m overseas. However, the MNCs have also become increasingly dependent
on revenues from overseas.
Worldwide employment by US MNCs
decreased 4.1% in 2009, to 31.3m workers, with
declines in both the United States and abroad. Employment in
the United States by US parent companies decreased 5.3%, to 21.1m workers, which mirrored the
change in total private-industry employment in the United
States. The employment by US parents accounted for almost
one-fifth of total US employment in private industries. Abroad,
employment by the majority-owned foreign affiliates of US MNCs decreased 1.5%, to 10.3m workers.
Sales by US parent companies
decreased 15.9% in 2009, to $7,819bn. Sales by their majority-owned foreign
affiliates decreased 10.9%, to $4,885bn.
Employment in the United States by US parent companies accounted for 67% of the
worldwide employment of US MNCs in 2009, down from 68% in 2008. The US-parent
share of the worldwide capital expenditures of US MNCs in 2009 was 73%, which
was unchanged from 2008.
In 1989, 79% of employment in
MNCs was in the United States.
Employment in the US by
foreign-based multinationals accounted for about 4.7% of all private industry
employment in 2009. They cut 500,000 jobs in 2009 to 5.2m. The overseas firms'
US workforces rose by 5% between 1997 and 2002, then flattened out between 2002
and 2007 and then fell by 7.1% in the two following years.
A key factor in the increase in
overseas employment is that MNCs are increasingly reliant on overseas sales.
Two-thirds of the revenues of
Hewlett-Packard (HP) and Microsoft come from overseas and Apple said
yesterday that international sales accounted for 59% of the last quarter’s
However, the gains are also being
made at home.
US manufacturing's first-quarter
growth rate was the strongest since 1997.
US exports jumped almost 17% in 2010
and almost half of the US economic growth since the recession ended in mid 2009
is export-driven, a unique situation since 1945.
Commerce Department estimates that exports account for 1.4% percentage points of
the US economy’s 3% expansion since the end of the recession. The
Commerce Department also reports that exports now amount to 12.8% of the
total US output - - the largest share on record.
Bloomberg says the
US will control 28% of global wheat exports this year, up from 18% in 2010, the
US Department of Agriculture (USDA) says. With prices averaging
about $8 a bushel this quarter and the next, the most in three years, farms will
earn $94.7bn, according to analysts’ forecasts compiled by Bloomberg and a
USDA estimate. North Dakota’s jobless rate was 3.6% in March, compared
with 8.8% nationally.
McKinsey Global Institute says MNCs
account for 23% of US private-sector output and 48% of its exports of goods.
The Wall Street Journal says
Microsoft cut its head count globally last year, but over the past five years,
it added more jobs in the US (15,300) than abroad (13,000). About 60% of
Microsoft's employees are in the US. Between 2005 and 2010, General
Electric cut 1,000 workers overseas and 28,000 in the US.
At the beginning of the 2000s,
Oracle had more workers at home than abroad; at the end of 2010, 63% of its
employees were overseas. The company said it still does 80% of its R&D in the US
Theodore H. Moran, nonresident senior
fellow at the Peterson Institute for International Economics in Washington DC
and the Marcus Wallenberg chair at the School of Foreign Service in Georgetown
in a 2009 paper (pdf): "Today US multinational
corporations concentrate more than 70% of their operations here in the United
States, constituting the most technology-intensive and productive segment of the
American economy and offering higher wages and benefits than other companies as
a result. They now conduct more than three quarters of all US private-sector
Using the US economy as the base for
integrating their global operations, which includes engaging in outward
investment, strengthens the domestic operations of US MNCs and allows them to
generate more exports (and thus more higher-paying, export-related jobs) than
firms that do not engage in outward investment. Making it more difficult to
engage in outward investment would not strengthen the US economy. Quite the
contrary, placing obstacles in the way of US multinationals’ global operations
would leave them and their suppliers, their workers, and the communities where
their US facilities are located worse off and less competitive in the world