Insourcing Created 6.4 Million American Jobs
March 24, 2004
Countries around the world are outsourcing their jobs to the United States in huge numbers, according to former chairman & CEO of Citicorp/Citibank Walter B.Wriston.
The number of jobs imported from abroad greatly exceeds the jobs exported overseas, as companies are attracted by the stable political environment, relatively low corporate tax rate and huge growth in American workers' productivity. For example,
- Honda increased its U.S. manufacturing last year by 15 percent.
- The drug maker Novartis is moving its huge world-wide research and development operation from Switzerland to Massachusetts.
- Texas is the beneficiary of a $500 million investment from Samsung to build a new semiconductor plant.
The Organization for International Investment (OFII) keeps track of the number of jobs that are outsourced by other countries. The OFII says foreign companies operating in America are creating more jobs than homegrown U.S. companies. According to the latest figures:
- Due to insourcing, some 6.4 million American jobs were created in 2001, up from 4.9 million in 1991.
- Some 34 percent of these imported jobs are in the manufacturing sector.
- The data shows that Ohio has imported 242,000 jobs; Indiana has attracted 163,000; and in Michigan some 244,000 jobs, about 6 percent of the workforce, are imported.
Exports by U.S.-based foreign companies now constitute about 22 percent of all American exports. In addition to the annual payroll of $350 billion for American workers, American investors benefit by owning 20 percent of the common stock of the largest of these foreign companies.
Thus, says Wriston, job-creating foreign investments are "win-win" situations for all concerned.
Source: Walter B. Wriston (Manhattan Institute), "Ever Heard of Insourcing?" Wall Street Journal, March 24, 2004.
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