American companies are hiring overseas, where sales are surging and the pipeline of orders is fat.
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well.
The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute’s senior international economist. “There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Scott. American jobs have been moving overseas for more than two decades.
In recent years, jobs have become more sophisticated. Think semiconductors and software, not toys and clothes. And now many of the products being made overseas aren’t coming back to the United States.
Demand has grown dramatically this year in emerging markets like India, China and Brazil. Meanwhile, consumer demand in the U.S. has been subdued. Despite a strong holiday shopping season, Americans are still spending 3 percent less than before the recession on essential items like clothing and more than 10 percent less on jewelry, furniture, electronics, and big appliances, according to MasterCard’s SpendingPulse. “Companies will go where there are fast-growing markets and big profits,” says Jeffrey Sachs, globalization expert and economist at Columbia University. “What’s changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out.”
With the future looking brighter overseas, companies are building there. “There is a shift in economic power that’s going on and will continue. China just became the world’s second-largest economy,” says David Wyss, chief economist at Standard & Poor’s.
To survive in this global economy, one must be well-versed in math, science, technology and pick up a foreign language such as Mandarin. Potential employees have to be resilient and change with the times. Those who forsee the changes and prepare in advance are the winners! My philosophy has always been the following: if you can’t beat them beat them at their own game!