In his speech on Wednesday, President Obama said:
This year, we are off to our strongest private-sector job growth since 1999. And because we bet on this country, foreign companies are, too. Right now, more of Honda’s cars are made in America than anywhere else. Airbus will build new planes in Alabama. Companies like Ford are replacing outsourcing with insourcing and bringing more jobs home.
Is it true that foreign companies are “betting†on the United States, and that American multinationals are returning jobs here in large numbers?
The most recent Bureau of Economic Analysis data available on multinational companies’ employment in the United States is for 2011, unfortunately. But those data do show that the total number of people working for American affiliates of foreign companies rose 3.3 percent that year, up to 5.6 million workers from 5.4 million in 2010. That rate of increase was higher than that for total American private industry employment that year, which was 1.8 percent.
Even so, total employment at these American affiliates of foreign companies had fallen sharply during the recession, and so its 2011 level was about the same as it was in 2002 through 2008, when the population was smaller.
Source: Bureau of Economic Analysis.As for American multinational companies (like Ford, which Mr. Obama cited), their employment in the United States actually stayed flat from 2009 to 2011 while they hired in large numbers abroad. From 2009 to 2011, domestic employment at these American companies was 22.9 million, while the number of employees abroad rose to 11.7 million from 10.8 million.
As a result, the share of employment at these American companies that is based at home has been shrinking, to 66.3 percent in 2011 from 79 percent in 1989:
Source: Bureau of Economic Analysis.None of those employment numbers will capture work contracted out to other companies, of course (e.g., Taiwan-headquartered Foxconn does a lot of manufacturing for American companies like Apple).
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