Open a Call Center in India, Then Hire in the US to Support It
It’s become the ultimate political football: tossing around invectives about how big corporations are sending too many jobs overseas…and now the American public has turned against free trade agreements because they think it kills jobs. We are losing millions of dollars in farm and export business as a result, and places like Colombia are giving up, and making deals to buy wheat and other products from Europe instead of the US.
An op-ed in the WSJ by William S. Cohen disputes this myth with real facts. Anyone who thinks it’s as simple as one job goes there one is lost here is still living in Detroit circa 1980. We are a global economy, and things that happen there affect what happens here. For example, for every job that is done in India, in a call center, nearly two better paying jobs are created here. That’s because more skilled marketing, advertising, scientific and engineering jobs result when the calls are made overseas.
When a firm hires lower cost labor at their foreign subsidiaries, according to a study by Dartmouth’s Tuck School of business, businesses need to expand their US operations to support the overseas workers. Between 1991 and 2001, employment at these foreign subsidiaries rose by 2.8 million, while jobs at the parent companies in the US rose to 5.5 million jobs. It makes sense, though this fact would never be uttered by a politician, since it’s too complicated. It’s easier just to beef about big corporations.
October 15, 2010 @ 2:14 pm
You should be more careful with your articles. This one is sheer nonsence. It indicates foreign job GAINS OF 2.8 million but U.S. job increases TO 5.5 million. What was the U.S. job base 5,499,999 ?
October 15, 2010 @ 2:59 pm
Here is the exact text, you’re right that I erred in semantics.
“Between 1991 and 2001, employment at foreign subsidiaries of US multinationals rose by 2.8 million jobs; during that same period, employment at their parent firms in the US rose by 5.5 million jobs.”