The problem: Big business doesn't care about American well-being
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President Obama is slamming Mitt Romney for heading companies that were 鈥減ioneers in outsourcing U.S. jobs,鈥 while Romney is accusing Obama of being 鈥渢he real outsourcer-in-chief.鈥
These are the dog days of summer and the silly season of presidential campaigns. But can we get real, please?
The American economy has moved way beyond outsourcing abroad or even 鈥渋n-sourcing.鈥 Most big companies headquartered in America don鈥檛 send jobs overseas and don鈥檛 bring jobs here from abroad.
That鈥檚 because most are no longer really 鈥淎merican鈥 companies. They鈥檝e become global networks that design, make, buy, and sell things wherever around the world it鈥檚 most profitable for them to do so.
As an Apple executive told the聽New York Times, 鈥渨e don鈥檛 have an obligation to solve America鈥檚 problems. Our only obligation is making the best product possible.鈥 He might have added 鈥渁nd showing profits big enough to continually increase our share price.鈥
Forget the debate over outsourcing. The real question is how to make Americans so competitive that all global companies 鈥 whether or not headquartered in the United States 鈥 will create good jobs in America.
Apple employs 43,000 people in the United States but contracts with over 700,000 workers overseas. It assembles iPhones in China both because wages are low there and because Apple鈥檚 Chinese contractors can quickly mobilize workers from company dorms at almost any hour of the day or night.
But low wages aren鈥檛 the major force driving Apple or any other American-based corporate network abroad. The components Apple鈥檚 Chinese contractors assemble come from many places around the world with wages as high if not higher than in the United States.
More than a third of聽what you pay for an iPhone聽ends up in Japan, because that鈥檚 where some of its most advanced components are made. Seventeen percent goes to Germany, whose precision manufacturers pay wages higher than those paid to American manufacturing workers, on average, because German workers are more highly skilled. Thirteen percent comes from South Korea, whose median wage isn鈥檛 far from our own.
Workers in the United States get only about 6 percent of what you pay for an iPhone. It goes to American designers, lawyers, and financiers, as well as Apple鈥檚 top executives.
American-based companies are also doing more of their research and development abroad. The share of R&D spending going to the foreign subsidiaries of American-based companies rose from 9 percent in 1989 to almost 16 percent in 2009, according to theNational Science Foundation.
What鈥檚 going on? Put simply, America isn鈥檛 educating enough of our people well enough to get American-based companies to do more of their high-value added work here.
Our K-12 school system isn鈥檛 nearly up to what it should be. American students continue to do poorly in math and science relative to students in other advanced countries. Japan, Germany, South Korea, Canada, Australia, Ireland, Sweden, and France all top us.
American universities continue to rank high but many are being starved of government funds and are having trouble keeping up. More and more young Americans and their families can鈥檛 afford a college education. China, by contrast, is investing like mad in world-class universities and research centers.
Transportation and communication systems abroad are also becoming better and more reliable. In case you hadn鈥檛 noticed, American roads are congested, our bridges are in disrepair, and our ports are becoming outmoded.
So forget the debate over outsourcing. The way we get good jobs back is with a national strategy to make Americans more competitive 鈥 retooling our schools, getting more of our young people through college or giving them a first-class technical education, remaking our infrastructure, and thereby guaranteeing a large share of Americans add significant value to the global economy.
But big American-based companies aren鈥檛 pushing this agenda, despite聽their huge clout in Washington. They don鈥檛 care about making Americans more competitive. They say they have no obligation to solve America鈥檚 problems.
They want lower corporate taxes, lower taxes for their executives, fewer regulations, and less public spending. And to achieve these goals they maintain legions of lobbyists and are pouring boatloads of money into political campaigns. The Supreme Court even says they鈥檙e 鈥減eople鈥 under the First Amendment, and can contribute as much as they want to political campaigns 鈥 even in secret.
The core problem isn鈥檛 outsourcing. It鈥檚 that the prosperity of America鈥檚 big businesses 鈥 which are really global networks that happen to be headquartered here 鈥 has become disconnected from the well-being of most Americans.
Mitt Romney鈥檚 Bain Capital is no different from any other global corporation 鈥 which is exactly why Romney鈥檚 so-called 鈥渂usiness experience鈥 is irrelevant to the real problems facing most Americans.
Without a government that鈥檚 focused on more and better jobs, we鈥檙e left with global corporations that don鈥檛 give a damn.
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