WHERE ARE OUR JOBS? OVERSEAS, THAT'S WHERE...

The strategy isn't restricted to just the largest American companies. Entrepreneurs, whether in technology, retail or in manufacturing, are now hiring globally from the start.

Anywhere, USA--  If you read our last post about the Stop the Lies campaign, you know damn well that corporate profits are up. Stock prices are up. So where are the American jobs?  Why isn't anyone hiring?

Actually, many American companies are hiring — just not here where you and I live.  They are hiring overseas, where unskilled labor costs are low, sales are surging and the pipeline of supply and demand is high.

More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.6 percent last month, even though companies are performing well.  All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute (EPI) says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent.

One thing is very clear:  There's a huge difference between what is good for American companies versus what is good for the American people.

American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes. 

NAFTA hasn't helped American workers

According to a November 2003 article from the EPI, The high price of 'free' trade:  NAFTA's failure has cost the United States jobs across the nation, 78% of the net job losses under the North American Free Trade Agreement were relatively high-paying unionized manufacturing jobs.  Since the agreement was signed in 1993, the rise in the U.S. trade deficit with Canada and Mexico through 2002 caused the displacement of production that supported 879,280 U.S. jobs.  Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana and California were significantly affected by these job losses. For example, in Ohio, TAA and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico. 

And now, many of the products being made overseas aren't even coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Slow economy has subdued consumer demand in America

Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 18 percent less than before the recession on furniture, and 10 percent less on electronics, according to MasterCard's SpendingPulse.

With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the U.S. Caterpillar stock is up 64 percent this year.

"There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy," says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.

Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 48 percent this year.

DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.

"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs."

This should clear up the fact that just because you have an American born corporation, their commitment is not always with the American people.  It's with the global wealthy elite, where the profit is and to it's shareholders who have the disposable income to invest in their company.

International growth is leveling the playing field

A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.

Most experts believe that all of the growth over the next 10 years is happening in Asia. Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. Kent is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.

Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.

If our economy is left up to a GOP House and large global corporations, the American middle class is doomed to suffer.  We will experience higher unemployment and economic stagnation because of anti-American corporate ethics.  Chasing the bottom line and higher profits are the only thing that matters to them.  Plus, supporting congressional lawmakers who govern to make their business lives easier and more profitable at the expense of American working families has become the new status-quo.  It truly is a vicious cycle and one that must end if the American middle class is to survive.