Multinationals: Are they good for America?

This is from Michael Perelman's blog ( A U.S. economist) Often multinationals are defended as the great engines of the global economy and good for everyone. There have always been some critics but they have often been marginalized. These snippets show how multinationals have cut back employment in the U.S. even as other companies have increase employment. It is not that they have no capital to invest as the article shows. It is invested elsewhere where profits are greater.

The Role of Multinationals in the U.S. Economy

Michael Mandel, (very) late of Dollars and Sense, may have returned to his roots, questioning the role of the multinationals, although suggesting that they have the potential to contribute to an economic recovery. He notes that the 150 U.S.-based nonfinancial multinationals cut more than 2 million jobs between 2000 and 2005, while they are hoarding more than $500 billion in cash.

A header describes the role of the multinationals as “exporting jobs, not goods.”

Mandel, Michael. 2008. “Multinationals: Are They Good for America?” Business Week (28 February): pp. 41-51.

41: “the top 150 U.S.-based nonfinancial multinationals, which include the likes of Hewlett-Packard, Pfizer, eBay, and Sara Lee, had more than $500 billion in cash and short-term investments at the end of 2007.”

41: “Figures collected by the Bureau of Economic Analysis suggest the multinational sector has in some ways been a drag on the U.S. economy since 2000. From 2000 to 2005, the last year for which full data are available, U.S. multinationals cut more than 2 million jobs at home, even as employment in the rest of the private sector grew — and there’s no sign the trend has significantly reversed.”

Are Multinationals good for America

It seems that the multinationals have lots of money to invest. It seems that a lot of their investment since 2000 has been overseas given the reduction in jobs in their U.S. plants. The decline in the U.S. dollar makes U.S. exports cheaper so that may help a bit but even so U.S. labor will no doubt be battered even more as capital can move easily around the globe looking for the cheapest labor.

Mandel, Michael. 2008. "Multinationals: Are They Good for America?"
Business Week
(28 February): pp. 41-51.

41: "the top 150 U.S.-based nonfinancial multinationals, which include
the likes of
Hewlett-Packard, Pfizer, eBay, and Sara Lee, had more than $500 billion
in cash and
short-term investments at the end of 2007."

41: "Figures collected by the Bureau of Economic Analysis suggest the
multinational
sector has in some ways been a drag on the U.S. economy since 2000.
From 2000 to
2005, the last year for which full data are available, U.S.
multinationals cut more
than 2 million jobs at home, even as employment in the rest of the
private sector
grew -- and there's no sign the trend has significantly reversed."