I think that the shipping of US jobs overseas by large multinational corps is the main reason for the present very high US unemployment rates, the very high US underemployment rates, and the lower median income for the middle class. It is also probably the main reason for the tepid US real GDP growth. And it is one of the main reasons for the huge US Deficit and huge US Government Debt.
This shipping of US jobs overseas isn't just manufacturing jobs. It also is non-manufacturing technology jobs. And the shipping of all kinds of US service jobs overseas has also been growing substantially.
This offshoring trend isn't just due to lower labor costs, but also due to the substantial tax holidays given to US multinational corps by many countries all throughout the world.
But just when did the financially devastating offshoring of US jobs occur? Well, only 18% of this offshoring occurred before the Bush/Cheney Presidential years.
And this offshoring really accelerated starting in 2004, when the US Congress passed the foreign earnings repatriation legislation, making 85% of foreign earnings repatriated tax free for US federal income tax purposes, which resulted in an effective tax rate on these earnings of an amazingly low 5.25%, for a one-year period. And every Republican in the US Congress voted for this 85% tax free foreign earnings repatriation legislation. Because of this very favorable legislation, large multinational corps repatriated a huge $360 bil in the one-year window period allowed by this legislation.
Yeah, 82% of the shipping of US jobs overseas happened starting in the laissez-faire Bush/Cheney Presidential years. The Obama Administration, from the very start, attempted to sharply reduce this offshoring of US jobs by trying to close the related corporate tax loophole of tax deferral, but the Big Multinational Corps, and their Republicans shills in the US Congress, stopped them in their tracks.
Recently, the Democrats in the US Senate tried to pass legislation which would curb this awful offshoring trend by large multinational corps, and perceptively even took it a step further by providing tax incentives for multinational companies to Reshore or Backshore these jobs to the US. Every Republican in the US Senate voted against this critical legislation, thereby stopping it in its tracks. I find it interesting that on the top of page 2 of the Wall Street Journal on Wednesday, Sept 29th, there is a picture there where Republican Senators John Thune and Lamar Alexander are smiling profusely about being successful in stopping this critical legislation, and thus permitting US Big Corps to again trump the US unemployed. I find such an open display of elation at the plight of workers laid off by offshoring obscene. I am sure many unemployed and underemployed feel likewise.
So clearly, the financially devastating shipping of US jobs overseas is on the Republicans. 82% of it happened after Bush/Cheney took office. And since the Democrats were in control, they tried to substantially reduce offshoring, but were stopped in their tracks by Republicans.
Thus if offshoring is important to you as a voter in the Nov 2010 election, why vote against Democrats running?....they are nearly all very staunch opponents of shipping US jobs overseas. Instead, you would want to vote against Republicans running...they are the 100% supporters of Big Multinational Corps and their massive offshoring of US jobs, which played a major role in creating the 2000s Lost Decade and its many horrible financial aftershocks.
Let me show how I got to the only 18% of this offshoring happening before the Bush/Cheney years.
Here are the 30 companies that had Total Unremitted Foreign Earnings above $10 bil at the most recent fiscal year end (2009 and 2010) and at predominantly the end of the Clinton Presidential years, thus at the end of fiscal year 2000:
..............................FYE.........FYE
............................2009-10...2000(or closest date disclosed)
...........................In Billions of Dollars
GE............................84.0........15.0 (at Dec 2002)
Pfizer.......................42.5.........14.0
Exxon Mobil.............42.0.........14.0
JNJ...........................32.2..........9.5
Cisco Systems...........31.6..........0.4
Merck.......................31.2..........9.7
Procter & Gamble.....30.0..........8.8
Microsoft..................29.5..........0.0
Citigroup...................27.3..........1.5
IBM..........................26.0.........15.5
PepsiCo.....................21.9..........7.5 (Dec 2002)
Abbott Labs..............20.6..........2.4
Chevron...................20.5..........3.3
Coca Cola.................19.0..........3.7
Schlumberger...........18.0..........4.0
Bank of America........16.7..........1.1
Bristol Myers Squibb.16.5..........6.0
Hewlett Packard........16.5.........11.5
Goldman Sachs..........16.2..........0.2 (Nov 2002)
JP Morgan Chase.......15.7..........1.4
Eli Lilly.....................15.5..........5.2
Apache.....................15.3..........0.9
Amgen......................14.3..........0.4 (Dec 2002)
Walmart....................13.7..........1.0 (Jan 2002)
Oracle.......................13.0..........0.9
Medtronic.................12.4..........0.2
Google......................12.3..........0.0 (Dec 2004)
Dell...........................11.3..........4.1 (Jan 2003)
DuPont......................11.3..........8.9
Intel..........................10.1..........4.2
Total of these 30.....687.1.......155.3
And then to get to the 18%:
(in billions of dollars)
....................................................2009-10.......2000
Total of these 30...........................$ 687.1.......$155.3 (4.42 times)
Total of all cos...............................$1,600........$362 (4.42 times)
Plus Foreign Earnings Repatriated
........in 2005 85% tax free..............$..360
.....................................................$1,960........$362 = 18%
