American Companies & Globalization

American Companies & Globalization


    American companies working with International companies are rumored to believe it is hurting the U.S. economy by outsourcing jobs to other countries because of cheaper labor.   Contrary to widely held public opinion, the expansion of offshore manufacturing and other activities by U.S. based multinational businesses benefits the domestic economy, and has not played a significant role in overall job losses, according to a report released by Manufacturers Alliance/MAPI, a manufacturing trade organization.
    According to the report, titled "Globalization Complements Business Activity in the United States," by MAPI Chief Economist Daniel J. Meckstroth, the growing trend by U.S. based multinational manufacturers to establish offshore manufacturing affiliates, often in fast growing economies such as India and China, benefits those companies and the U.S. economy as a whole in a number of ways.   Besides lowering product costs to consumers, globalization increases income and profits to U.S. multinationals and stimulates demand for products and services from U.S. companies, it also creates demand for more U.S. management and research jobs, and it makes it economically feasible for U.S. manufacturers to offer products and services that would not otherwise be available.
    U.S. based multinational companies, which tend to be among America’s biggest, have long helped strengthen the U.S. economy.   The many channels of these contributions are well documented and researched.   American companies first and foremost, U.S. multinationals enhance the American economy through capital investment, exports, research and development, and by supporting good paying American jobs.   Their ability to strengthen the U.S. economy is enhanced, not reduced, by their global engagement.
    U.S. parent companies perform large shares of America’s productivity enhancing activities that lead to high average compensation for American workers.   In 2008,...