US Job Creation in Foreign Lands

It's no secret that jobs in the US have been moving overseas.  However in this WSJ article US Job Creation in Foreign Lands they go onto explain a reason why which may not be that intuitive with people


From the article

• U.S.-based multinational corporations added 1.5 million workers to their payrolls in Asia and the Pacific region during the 2000s, and 477,500 workers in Latin America, while cutting payrolls at home by 864,000, the Commerce Department reported.
• The faster growth abroad was concentrated in emerging markets, such as China, Brazil, India and Eastern Europe, according to economists Kevin Barefoot and Raymond Mataloni, of the U.S. Commerce Department.
• "Judging by the destination of sales by affiliates in those countries," the economists wrote in a recent survey, "the goal of the U.S. multinational corporations' expanded production was to primarily sell to local customers rather than to reduce their labor costs for goods and services destined for sale in the U.S., Western Europe and other high-income countries."  This is the really important point that the emerging companies have huge growth potential with millions if not billions of people in foreign countries entering into a middle class where they can now afford the luxuries taken for granted by so many people here in the US
• The multinational companies, for instance, reduced capital-investment spending in the U.S. at an annual rate of 0.2% in the 2000s and increased it at a 4.0% annual rate abroad. Still, they allocated $2.40 in capital spending in the U.S. for every $1 spent abroad.  Again this data points out to no if not extremely slow growth in the US
• Much of the overseas investment and hiring by U.S. multinationals has been in the service sector and other industries outside manufacturing. Among U.S. multinational firms in manufacturing, about 60% of employment is still in the U.S. But the manufacturers cut their U.S. payrolls by 2.1 million in the 2000s and added 230,000 workers overseas.
• In all, U.S. multinational manufacturers employed 6.9 million workers in the U.S. in 2009 and 4.6 million abroad.

An underlining point to this data is the extreme need to overhaul to ad equated tax system.  The reason why...US multinationals are sitting on billions of dollars from overseas operations that they would have to pay additional tax on those profits.  I don't believe in the tax holidays that have taken place previously which is one of the reasons why I support an overhaul of the tax system where companies would not be double taxed.  As emerging markets continue to grow and US companies spend the capital and grow profits in foreign countries it will continue to look at foreign countries for investment as opposed to the US.