Customer call centers and educated workers outsourced overseas.
Corporate profits have increased, Dow Jones above 11,500, stock prices are up and the job market remains stagnant with an average 414,000 in weekly initial jobless claims.
Even as the job market appears to be gaining strength or flattening, overseas jobs are more abundant as U.S. jobs are still moving overseas.
Of the 15,000 people hired by Caterpillar Inc. in 2010, more than half were outside the United States. UPS is also hiring more overseas workers. The reason is that the companies are seeing international sales grow twice as fast as in the domestic market.
The tendency toward overseas hiring explains why U.S. unemployment remains at a high of 9.8 percent as of last month, even though companies are doing better than they were a year ago. There are nearly 9 million people receiving some form of unemployment benefits. All but just 4 percent of the U.S.’s 500 largest corporations reported profits in 2010, and the stock market has nearly reached its highest point since the financial collapse of 2008.
Revived profitability has led to more hiring overseas. According to the Economic Policy Institute, a think tank based in Washington, DC, American companies created less than 1 million domestic jobs this year but 1.4 million overseas jobs. Had those 1.4 million jobs been in the U.S., and the country’s unemployment rate would sit at 8.9 percent, said the institute’s Robert Scott.
“There’s a huge difference between what is good for American companies versus what is good for the American economy,” Scott said.
American jobs have been going overseas for decades, but now the jobs are for technology and consumer electronics, not clothing and toys. Demand for those more sophisticated products is also growing in emerging and heavily populated markets.
At the same time, consumer spending remains low in the U.S.
“Companies will go where there are fast-growing markets and big profits,” said Jeffrey Sachs, an economist at Columbia University. “What’s changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out.”