Globalizing Private Sector, Government Overwhelmed by Corporate Money
Robert B. Reich

President Obama believes government has a vital role in creating good jobs in America. Mitt Romney and Newt Gingrich say American business will create good jobs here if their taxes are lowered and regulations eased.

The facts are on the president's side. U.S. corporations are increasingly global, with less and less stake in America. According to the Commerce Department, American-based global corporations added 2.4 million workers abroad in first decade of 21st century while cutting their American workforce by 2.9 million.

Apple Inc. employs 43,000 people in the United States but contracts with more than 700,000 workers abroad. It makes iPhones in China both because wages are low there and because its Chinese contractor can quickly mobilize workers from company dormitories at almost any hour of the day or night.

American companies are also creating good high-tech jobs abroad. The National Science Board warns that the U.S. is quickly losing ground in research. China's share of global R&D now tops ours. One big reason, according to the NSB: American firms nearly doubled their R&D investment in Asia over the last decade.

That's because China has been pouring money into world-class research centers designed to lure American companies. China has a national strategy to create the technologies and the jobs of the future, with the help of American corporations. And it has the biggest consumer market in the world, to which every American company wants access.

American companies are happy to play along because it's profitable for them. An Apple executive told the New York Times, "We don't have an obligation to solve America's problems. Our only obligation is making the best product possible." He might have added, "and show profits big enough to continually increase our share price."

If Apple or any other big American company can make it best and cheapest in China or anywhere else, that's where they'll do it. Don't blame them. American corporations are in business to make profits and boost their share value, not to create good American jobs.

But here's the political problem. In case you hadn't noticed, American firms have huge clout in Washington. They maintain legions of lobbyists and are pouring boatloads of money into political campaigns. After the Supreme Court's decision in Citizens United v. Federal Election Commission, there's no limit.

Their clout extends to the Obama White House. The president's own Council on Work and Competitiveness is chaired by Jeffrey Immelt, CEO of GE, and is full of CEOs of other big American corporations.

Like the others, GE has been creating more jobs outside the United States than in it. A decade ago, fewer than half of GE's employees were non-American; today, 54 percent are. And like others, GE has also been shifting more of its research to China. It recently announced a $500 million expansion of its R&D facilities there on top of a $2 billion initial investment.

Not surprisingly, the council's recent report calls for lower corporate taxes and fewer regulations. The report -- endorsed by Republican House Speaker John Boehner -- could have been written by any Republican candidate.

Previously the council has called for repeal of the anti-corporate-looting provisions enacted by Congress in 2002 in response to Enron, arguing they impede growth and hiring.

Lower corporate taxes and fewer regulations won't bring good jobs to America. They might lower the costs of production here, but global companies can always find even lower costs somewhere else around the world.

Global corporations -- wherever they're based -- will create good jobs for Americans only if Americans are productive enough to summon them. Yet a large and growing portion of our workforce isn't equipped to be productive.

We're hobbled by deteriorating schools, unaffordable college tuitions, decaying infrastructure, worsening health (along with rising health-care costs) and declining basic R&D. All of this is putting us on a glide path toward even lousier jobs and lower wages.

Yet big American corporations aren't lobbying to fix any of this. They can get what they need globally, and they're designed to make profits rather than create good jobs.

So who represents the American workforce in Washington? Who is lobbying for a national strategy to create more and better jobs here? The answer is no one. Organized labor represents fewer than 7 percent of private-sector workers and has all it can do to protect a dwindling number of unionized jobs.

Republicans like it this way, and for three decades have been trying to convince average working Americans that government is their enemy. Yet corporate America isn't their friend. Without bold government action on behalf of our workforce, good American jobs will continue to disappear.

 

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Globalizing Private Sector, Government Overwhelmed by Corporate Money | Politics

 

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