(Analysis) As US multi-national companies (MNCs) increasingly shelter their offshore revenue from the IRS, they are continuing a trend of betting against the US economy. The US Commerce Department’s BEA released data on April 18 summarizing their activities – both domestic and overseas, through 2011. Many of its highlights indicate further erosion of confidence among MNCs in the US economy, and a desire to produce where labor is in a weaker position to bargain.
The BEA data release shows that employment by US MNCs in the US increased a meager 0.1% in 2011, whereas employment overseas by MNCs increased 4.4%. The release suggests that US MNCs are choosing to employ more overseas because of a large compensation difference between domestic and overseas employees – the average compensation paid by US MNCs for a domestic employee is $70,682, compared to an average compensation of $41,689 overseas. The trend by US MNCs to employ more overseas is contributing in part to the growing inequality of income here in the US, as large profits taken from MNC operations overseas accrue to a small, but very wealthy, minority.
Workers and their families here locally can express their unhappiness with US MNCs by patronizing locally-owned shops. An initiative is underway this very week in WNY to promote local restaurants.