Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Joe Guzzardi The hoax of overseas jobs

Print
Font Size:
Default font size
Larger font size

Joe Guzzardi

Posted: Saturday, August 20, 2011 12:00 am | Updated: 10:39 am, Sat Aug 20, 2011.

The claim first made more than 10 years ago and repeated by Republican and Democratic administrations that corporate offshoring would increase domestic employment turned out to be one of the most painful hoaxes ever perpetrated on American workers

Matthew Slaughter, a Dartmouth College Tuck School of Business professor and an economic adviser to George W. Bush, touted the universally accepted globalism mantra that, " ... for every one job that U.S. multinationals created abroad ... they created nearly two U.S. jobs in their (U.S.-based) parents." Today, Slaughter admits his error. In the meantime unemployed, indebted and foreclosed Americans pay the price for the federal government's folly.

Despite President Obama's ongoing rhetoric to the contrary, few well-paying jobs will be created near term. U. S. corporations find it more lucrative to do business overseas.

Here's the evidence: According to a report issued July 27 by Moody's Investor Services, U.S. non-financial corporate cash holdings rose to $1.24 trillion at the end of 2010, with nearly half of the total on deposit abroad. Apple Inc., Microsoft Corp., Cisco Systems Inc., Pfizer Inc. and Google Inc. held the largest amounts of cash. The huge sums reflect the growing strength of major corporations' international operations.

Based on a Moody's internal survey, the agency concluded: "We believe companies will keep this cash outside the U.S. as they pursue international acquisitions, invest in their own overseas operations or await tax breaks on overseas earnings they bring back to the U.S."

Instead of broad-based hiring, major corporations hoard cash, slash domestic payroll and add to their overseas staff. According to the U.S. Department of Commerce, during the 2000s these companies cut their U.S. work forces by 2.9 million while increasing employment overseas by 2.4 million. Compare that to the 1990s when large corporations added 4.4 million domestic jobs versus 2.7 million abroad.

Compounding the unemployment problem is that GE, Wal-Mart, Cisco, Oracle and dozens of others pay little, if any, federal income tax. Consider the software giant Microsoft, which just released its fiscal fourth quarter statement that reflected record sales of nearly $17.4 billion, a 30-percent increase in after-tax profit and a 35-percent gain in earnings per share. On a $6.3 billion profit, Microsoft paid only 7 percent in taxes, or a meager $445 million. Microsoft's foreign earnings make up 68 percent of its overall income.

According to Microsoft's IRS filings, over the past six years the company's pre-tax profits booked overseas nearly tripled to $19.2 billion in the fiscal year just ended, from $6.8 billion in the year ended June 2006. During the same four-year period, its U.S. earnings have dropped to $8.9 billion from $11.4 billion. High on the list of reasons for Microsoft's shrinking tax bill is that it channels global sales earnings through the low-tax havens of Ireland, Puerto Rico and Singapore.

To end offshoring and thereby restore American job opportunities, strong federal intervention is required — something light-years away given the insidious link between Silicon Valley campaign donations and Capitol Hill. A September 2010 effort failed when Senate Republicans blocked the Creating American Jobs and Ending Offshoring Act that included two amendments that would ensure that Americans are first in line for any domestic jobs. Currently, no similar legislation is pending.

Joe Guzzardi retired from the Lodi Unified School District in 2008. He lives in Pittsburgh, Pa. Contact him at guzzjoe@yahoo.com.

More about

More about

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

Recent Comments

Posted 5 hours ago by Angie McDaniel.

article: Letter: U.S. suffers from total lack of…

Nice spin attempt there Mike. "Where have I said that ALL cops should be punished? Punished for what and how?" You support lo…

More...

Posted 7 hours ago by Angie McDaniel.

article: Letter: Leaders to blame for police dea…

Yeah, you can start by reading the original post before commenting with unintelligible information. The Constitution does not give American…

More...

Posted 21 hours ago by Shane Marcus.

article: Knights of Columbus annual crab feed

What kind of crab? There is more than one kind...

More...

Posted 21 hours ago by Angie McDaniel.

article: Letter: Leaders to blame for police dea…

Ed, stay on point. No one asked you to provide the top ten most dangerous jobs. I don't remember the last time an iron worker was threatene…

More...

Posted 21 hours ago by Shane Marcus.

article: Census: Young adults face higher povert…

You really cannot compare 1980 with 2014. Those were the Regan years, and although he wasn't perfect he never disrespect to the office (Co…

More...

Video

Popular Stories

Poll

Vote on the biggest local story in 2014: See poll below

It has been an eventful year in Lodi, from the antics of a wild turkey named Tom Kettleman to the announced closure of the General Mills plant. What do you see as the biggest story of the year?

Total Votes: 348

Loading…

Your News

News for the community, by the community.

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists