With the typical opening line one can expect from Huffington Post, the author questions why American companies aren’t hiring:
“Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?
Actually, many American companies are – just maybe not in your town.”
They basically write the same article once a week, criticizing US multinational corporations for hiring overseas, expanding overseas, outsourcing all while not expanding their ranks here in the US. I’ve seen some articles go so far as to practically want legislation to force companies to hire Americans. They question why US multinationals are sitting on so much cash while not hiring Americans. What never quite comes across in the liberal media, but is painfully obvious to me is that – there is NO CORRELATION at all. They are hiring because the future revenue growth is coming from emerging markets, NOT the US for many firms. Often times, these markets mandate a certain level of “local manufacturing” or headcount in order to sell there. If a company needs headcount to expand in a particular locale, they will hire. If they don’t, they won’t. Multinationals are leaving hoards of cash earned overseas without repatriating it because they don’t want to pay a massive tax bill that their competitors from foreign countries don’t pay. They aren’t hiring in the US for a multitude of reasons – productivity is up, the revenue outlook here is flat, healthcare reform is crippling to business, and more. This is the reality, so now, what are you going to do about it?
- Assess your situation – realistically – While it may seem tough to envision, your job may be relatively easy to outsource. Even if you’re going some sort of engineering services, legal function, reading X-Ray results or in a hot programming outfit, within years, there may be an English speaking equivalent willing to work for a fraction of your bloated salary to do the same thing – and work twice as hard doing it. This is the reality of a flattening world that the real-time internet and global competitive forces have brought upon us. Is your job really air-tight?
- Broaden Your Skill Set – Instead of maintaining the status quo and staying in “comfortable” jobs and avoiding pesky new assignments, go for those new experiences. Get a professional certification. Get a Six-Sigma Black Belt, Get an MBA, Do Something more than slow and steady. The more your company spends on you now and the more you broaden your skill set, the tougher it will be to let you go later. And you’ll have much more success networking and landing something later should the need arise. For people who have remained complacent and not broadened their skill set in recent years, it’s especially difficult to land a job once out of work.
- Target Future Growth Industries, not Yesterday’s Glory Days – If you have a choice between internal job opportunities or even if you’re jumping jobs or industries, tend to lean toward cutting edge technology, even if it’s at the expense of a lower salary, title, whatever. There are a lot of opportunities in old-world industry still, but the growth just isn’t there. Energy, Green-tech, biotech, social media – these industries are all exploding. If you can land something there and stay on the cutting edge and in-demand, you may look back fondly at the sacrifice you made in passing on a promotion in your same dinosaur industry or family owned business (when you’re not part of the family!). Think strategically, not tactically.
What Are You Doing to Stay In Demand?
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“Often times, these markets mandate a certain level of “local manufacturing” or headcount in order to sell there”
What markets mandate that? I only know of Brazil.
“healthcare reform is crippling to business”
How exactly has healthcare reform been “crippling” to business?
My employer has stated to us employees that the reform is not having substantial financial impact. Most of the reform hasn’t happened yet and most of it doesn’t impact employers who already provide insurance.
A couple companies made a big stink about how it would cost them a lot of money but that was all due to losing one specific government subsidy that they’d been getting.
Darwin Reply:
December 30th, 2010 at 7:42 pm
@jim, Always a pleasure…
“What markets mandate that? I only know of Brazil. ”
– In pharma and biotech, it’s numerous countries with more headed in that direction. Try utilizing stability data from the US, EU or other source country to file a drug change in Mexico. Nope, have to conduct locally. Try selling a biotech in China. Nope – gotta form JV with, partner with one of the 6 state-sponsored entities or build a plant. Russia starting to demand local packaging; likely to move forward to formulation; the list goes on. Countries are starting to catch on and realize that if multinationals want to sell in their countries, if they wanna play? They gotta pay. This requires hiring in those locales.
“How exactly has healthcare reform been “crippling” to business?”
Healthcare “reform” is problematic from so many standpoints, I can’t list them out here. Here’s a 10 month old article I penned before all the provisions were even fully understood; just the tip of the iceberg – http://www.darwinsfinance.com/health-care-reform-bill-criticism/
Without parsing through every detail, just the notion that multinationals DON’T have to contend with this in other countries makes it a net loser. It’s going to bankrupt the country; whole other post there.
” losing one specific government subsidy that they’d been getting.”
See, this is the typical liberal media getting to you. Do you know why this “subsidy” even exists? It’s bc publicly traded corporations are paying for drugs for seniors that would otherwise be in the Medicare system costing taxpayers even more money. They could just kick them out, but they continue to pay. It was a deal that the govt broke by rescinding.
Elliott Reply:
January 3rd, 2011 at 11:41 am
I read that article 10 months ago, and I can’t believe you actually typed “See, this is the liberal media getting to you” with a straight face after referencing an article that aped Fox news so faithfully.
Darwin Reply:
January 3rd, 2011 at 11:50 am
@Elliott, Do you understand the context of the retiree prescription drug benefit these companies are providing and why the tax deduction was enacted? Please go back and understand the history, the concept and the agreement – which was then flipped by Obama.
Elliott Reply:
January 4th, 2011 at 11:08 am
I think it’s pretty clear that the specifics of a prescription drug benefit were not the point of my reply. The irony of the claim of objectivity implicit in the phrase “See, this is the liberal media getting to you” being made in the midst of such a partisan argument was.
US companies are at a disadvantage globally because of the high cost of health care. If a US company hires a US worker they have to pay the cost of health insurance. If a US company hires a worker in England, Canada or many other countries the cost of health care is picked up by the government of those countries. Wouldn’t the US companies be a lot more competitive globally if the US government paid the entire cost of health care? That would make health care in the US a non factor if deciding to hire a US or foreign worker.
The only major “cost” I’ve heard of here is that the US government stopped subsidizing retiree prescription drug costs for those companies that had been paying retiree prescription drugs after medicare part D was enacted. The cost of the reform therefore is the end of a subsidy. Yes that subsidy was part of the law and the law has now been changed to stop that subsidy.
Anyone talking about “the liberal media” is clearly exposing their own bias.
Wait. Actually the governmnet is still subsidizing retiree drug benefits. Its simply now taxing that subsidy benefit.
Copied straight out of a left wing nut job liberal media website :
“Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits – including the subsidies – from their taxable income.
The new law allows companies to only deduct the 72 percent they spent.”
In other words: The company spends $100 on drugs for a retiree. The government then gives the company a $28 handout. The companies would then deduct the $100 as an expense on their taxes even though the government paid $28 of it. Now the companies can only deduct the $72 that they actually spend themselves and the $28 subsidy from the government is no longer tax free.
I found one source that said that “Overall, more than 3,500 companies offer drug benefits to 6.3 million retirees. ” and they estimated a cost of $233 per retiree. So thats about $1.5 billion total lost corporate subsidy nationwide spread across 3500 companies.
Not exactly “crippling”.
Darwin Reply:
January 3rd, 2011 at 4:13 pm
@jim, What is crippling is the healthcare law overall. This is just one small part of the overall monstrosity. To the point of this drug “giveway” you speak of, it’s really quite ironic. These companies are paying the drug costs for retirees that would otherwise have to be covered under the government system, thus saving the government money (and costing companies and shareholders money since corporations are paying instead). When companies were considering pulling their drug funding for retirees years ago, the government agreed to allow them to deduct; now the government went back on that promise. Do you think the billions of dollars in writeoffs from US blue chips to account for the change were fabricated? This is real equity that has left the system due to this change. So, yes, it is measurable and it is significant. Billions of dollars.
As far as impact elsewhere, take a look at the article I linked to and others. It’s a complete disaster. It will bankrupt the country unless significantly altered or repealed altogether.
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