In the last decade, U.S.-based multinational companies have been on a hiring spree, adding over 2 million new jobs. They're just not adding them in the United States.
In the last decade, U.S.-based multinational corporations cut nearly 864,000 jobs in the United States, according to a new report from the Commerce Department's Bureau of Economic Analysis. At the same time, they added 2.87 million jobs outside the country, including 1.61 million jobs in Asia and the Pacific region.
Multinational companies are focusing their hiring largely in emerging markets, where economic growth has been faster than in other regions. China, which grew at an average 10.3 percent per year between 1999 and 2009, was the country that enjoyed the most job growth from U.S.-based multinational companies, with 691,100 jobs added, according to the report.
In India, where the economy grew an average 7.2 percent per year during that time frame, U.S.-based multinational corporations added 425,800 jobs. The U.S. economy, in contrast, grew an average 1.7 percent per year.
U.S.-based multinational corporations also added 532,300 jobs in Latin America, the study found. Economies in the region have been growing nearly four percent per year on average, according to the Conference Board.
"They're going abroad mainly to sell their products," said BEA economist Raymond Mataloni, who co-authored the report. "Most of the sales in these emerging markets are to local customers."
General Electric, one of the largest multinational corporations in the world, is one of the companies focusing its attention abroad. While GE has cut some 25,000 jobs in the U.S. since 2001, it has added 2,000 jobs abroad, according to data provided by GE. It's not just the company's labor force that's grown increasingly international. The company has become increasingly reliant on foreign sales in the last decade: GE's sales outside the U.S. grew from 35 percent of total revenue in 2001 to a projected 60 percent by the end of 2011.
And GE isn't the only American heavyweight with large international workforces. Microsoft, the computer hardware manufacturer, employs two-thirds more employees abroad than in the United States -- a difference of 36,000 employees -- according to its web site.
But the focus on hiring workers abroad may be detrimental to job creation at home, because job growth in the U.S. depends to a large extent on U.S.-based multinational corporations. These companies accounted for 19 percent of the U.S. private-sector workforce in 2007. And they've been even more important to U.S. economic growth, accounting for 41 percent of U.S. productivity gains since 1990 and 74 percent of the U.S.'s private-sector spending on research and development in 2007, according to a 2010 report by management consulting firm McKinsey & Company.
The McKinsey report said that multinational corporations' growing investments abroad may be "'the canary in the the coal mine' of the U.S. economy," warning of more international competition to come.
"The United States cannot rest on past success and assume it will win the intensifying global competition for corporate investment," the McKinsey report said. "It cannot take its multinationals ... for granted."