The Homa Files

Punch line: Corporate profits are up. Stock prices are up. But, companies aren’t hiring.

Here’s one theory of the case… they are — but not in the U.S.

Excerpted from AP, Where are the jobs? For many companies, overseas, Dec 29, 2010

Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — they’re hiring overseas, where sales are surging. Sales in international markets are growing at least twice as fast as domestically. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

The trend helps explain why unemployment remains high in the United States, even though companies are performing well and the stock market is booming.

But the jobs are going elsewhere. American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S.

In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes.

“Companies will go where there are fast-growing markets and big profits.”

With the future looking brighter overseas, companies are building there, too.

• Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment.
• DuPont — known as one of the most innovative American companies of the 20th century –now sells less than a third of its products in the U.S.
• Coca-Cola — of Coke’s 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.

Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. He says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society. He exhorted business leaders to find a way to link growth with job creation at home.

Other economists, like Columbia University’s Sachs, say multinational corporations have no choice, especially now that the quality of the global work force has improved. Sachs points out that the U.S. is falling in most global rankings for higher education while others are rising.

Full article:
http://www.google.com/hostednews/ap/article/ALeqM5iFY0R9agrMVljqtaB6ccsILSKd3Q?docId=771fbe245e624cbd95ab5a49122dd701

Thanks to SMH for feeding the lead

This entry was posted on January 4, 2011 at 6:30 am and is filed under Employment - Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.