Innovation Files has moved! For ITIF's quick takes, quips, and commentary on the latest in tech policy, go to

Should Multinationals Have to Report Jobs in the U.S.?

An article in today’s Washington Post takes many U.S. multinationals to task for wanting on the one hand tax incentives to create jobs and on the other refusing to report their breakdown of jobs here and overseas. Indeed, while all companies in the United States are required by law to report the number of jobs they have to the U.S. government, that data is by law also protected and is only revealed in aggregate (e.g., jobs in particular industries), not by individual firm.

While it might be useful to know this data by firm, there is a very good reason why many multinational firms don’t want to report it: American politics is so broken that any company that is creating more jobs overseas than here at home is immediately branded as an anti-American, selfish corporation that puts profits ahead of people.  Remember John Kerry’s “Benedict Arnold corporations” from 2004?  Who wants this kind of grief for doing what your shareholders (and customers) are demanding?

The ultimate in this kind of thinking is to fall prey to the dangerous illusion that the U.S. can have a thirving economy without healthy large multinational corporations located here and employing people here. My colleague Ron Hira succumbs to this view when he is quoted in the article as saying, “should you listen to the kind of advice these companies have about how to grow the economy when their record and their model indicates they’ve cut jobs? … Or should we talk to people who actually do create jobs in the United States?” To be sure, not every idea companies propose is the right one, and certainly there are good ideas that they would do well to support, but to say that just because companies are moving jobs offshore that we should no longer listen to them for policy ideas of how to get them to not move jobs offshore is frankly ludicrous. One of the problems is that we have not been listening enough to multinational companies. For many have been saying for years how we need to boost the R&D tax credit, invest more in science and technology, boost support for science and engineering educaiton, etc. But Washington has largely ignored their advice.

If we take the view that as a nation we can be indifferent to the health of large multinational corporations, especially their establishments in the United States, we are largley kissing our economic future goodbye. You can’t build a powerhouse economy on pizza parlors and barber shops. Yet all too many people would have economic policy focus on these good old fashioned, red-blooded, mom and pop, “Main Street” companies but they disregard the reality that the vitality of these firms is almost 100 percent dependent on the mulitnationals making investments in America.

A bit like a guy who loses his girl friend because he stops being interesting and then blames her for leaving, too many now blame corporations for making what are essentially rational decisions. American corporate taxes are among the highest in the world. Our public investment in research and development, reserach universities, workforce training and infrastruture lag many other nations. We all too often lay down or turn the other cheek when it comes to foreign unfair trade practices that unfairly induce multinationals to create jobs there. What do you expect companies to do in this situation. To be sure, companies could and should take a longer view of how to innovate and raise productivity and not be so quick to take the low cost path in India or China.  But fundamentally absent us changing, our corporate girlfriend will continue to see more in the other guy.

And so back to the job numbers. If they report job numbers that show that companies are adding jobs outside the U.S. we blame them. No wonder they don’t want to report jobs data.

Its time for pundits, policy makers and other folks to wake up and smell the coffee.  If you are the governor of New York or Texas you don’t call your corporation that is headquartered there a “Benedict Arnold” for moving a factory to another state or another nation. You fight harder to make your state more competitive so the next time a decision like this gets made you will be the benefactor. So rather than blame the girlfriend for leaving us, let’s look in the mirror, lose some weight, find some new clothes, get a new attitude and turn off the TV. In other words, blaming companies for moving jobs offshore gets us nowhere. What gets us somewhere is taking the hard steps to make America competitve again,and that is not just cutting taxes or streamlining regulations, as important as that is, its also expanding public investment and  developing a real national innovation and competitiveness strategy.

Image Credit: Bill Bradford

Print Friendly, PDF & Email