victoriayhul: Making Money Jobs

History will record 2010 as the year Washington became "business friendly."

Not that it was all that unfriendly before. Some would say the bailouts of Wall Street, AIG, GM, and Chrysler were about as friendly as it can get. In addition, Washington gave windfalls to drug companies and health insurers in the new health bill, subsidies to energy companies in the stimulus package, and billions to domestic and military contractors.

But for corporate America it still wasn't friendly enough. Before the midterm elections, Verizon CEO and Business Roundtable chair Ivan Seidenberg accused the president of creating a hostile environment for investment and job-creation. In the midterms, business leaders overwhelmingly threw their support to Republicans.

So the White House caved in on the Bush tax cuts for the wealthy, and is telling CEOs it will be on their side from now on. As the president recently told a group of CEOs, the choice "is not between Democrats and Republicans. It's between America and our competitors around the world. We can win the competition."

There's only one problem. America's big businesses are less and less American. They're going abroad for sales and employees. That's one reason they've showed record-breaking profits in 2010 while creating almost no American jobs.

Consider one of most popular Christmas products of all time -- Apple's iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone whose wholesale price is around $179.00 to determine where the money actually goes.

Some shows up in Apple's profits, which are soaring.

About $61 of the $179 price goes to Japanese workers who make key iPhone components, $30 to German workers who supply other pieces, and $23 to South Korean workers who provide still others. Around $6 goes to the Chinese workers who assemble it. Most of the rest goes to workers elsewhere around the globe who make other bits.

Only about $11 of that iPhone goes to American workers, mostly researchers and designers.

Even old-tech American companies made big money abroad in 2010 -- and created scads of jobs there. General Motors, for example, is now turning a nice profit and American investors bullish about its future.

That doesn't mean GM will be creating lots more blue-collar jobs in America, though. 2010 was a banner year for GM's foreign sales -- already two-thirds of its total sales, and rising. In October, GM became first automaker to sell more than 2 million cars a year in China. The company is now making more cars in China than in the United States.And GM has just signed a deal with its Chinese partner to try to crack India's potentially huge auto market.

Meanwhile, back home in the U.S., GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all GM's U.S. suppliers have also cut their payrolls.

It's much the same even for America's biggest retailers. 2010 wasn't an especially good year for Walmart in the United States. Its third-quarter sales fell, as U.S. shoppers continued to hold back.

But Walmart International is contributing mightily to its bottom line. Its UK business, Asda, will be adding 7,500 new jobs next year. Walmart is also doing well in Japan and Brazil, and hiring like mad in both countries.

So when President Obama tells American CEOs our biggest challenge comes from abroad, you've got to wonder. The leaders of American business are already abroad, and doing quite nicely.

Just after the midterm elections, the President's chief economic advisor, Larry Summers, told a group of top U.S. CEOs that the election was partly a "rejection of elites... that were seen as more citizens of Davos than of their countries." American CEOs, Summers warned, should "think very hard about their obligations as citizens of this country."

Yes, they're citizens. But first and foremost they're CEOs. And CEOs have to show profits - wherever those profits come from. Under American-style capitalism, profits matter. Jobs don't.

2010 was the year Washington became even more "business friendly." The result has been more and better jobs -- but not in America.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

Hello, everybody. As we close the books on one year and begin another, I wanted to take a moment today to wish you a very Happy New Year and talk a little bit about the year that lies ahead.

At the start of 2011, we’re still just emerging from a once-in-a-lifetime recession that’s taken a terrible toll on millions of families. We all have friends and neighbors trying to get their lives back on track.

We are, however, riding a few months of economic news that suggests our recovery is gaining traction. And our most important task now is to keep that recovery going. As president, that’s my commitment to you: to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class. That’s my resolution for the coming year.

Still, even as we work to boost our economy in the short term, it’s time to make some serious decisions about how to keep our economy strong, growing and competitive in the long run. We have to look ahead -- not just to this year, but to the next 10 years, and the next 20 years.

Where will new innovations come from? How will we attract the companies of tomorrow to set up shop and create jobs in our communities? What will it take to get those jobs? What will it take to out-compete other countries around the world? What will it take to see the American Dream come true for our children and grandchildren?

Our parents and grandparents asked themselves those questions. And because they had the courage to answer them, we’ve had the good fortune to grow up in the greatest nation on Earth.

Now it’s our turn to think about the future. In a few days, a new Congress will form, with one house controlled by Democrats and one house controlled by Republicans -- who now have a shared responsibility to move this country forward. And here’s what I want you to know: I’m willing to work with anyone of either party who’s got a good idea and the commitment to see it through. And we should all expect you to hold us accountable for our progress or our failure to deliver.

As I’ve said since I first ran for this office, solving our challenges won’t be quick or easy. We have come through a difficult decade, one of new threats and new trials we didn’t expect when it began. But a new year and a new decade stretch out before us. And if we just remember what America is capable of, and live up to that legacy, then I’m confident that we are poised for a period of progress -– one in which our economy is growing, our standing in the world is rising, and we do what it takes to make sure America remains in the 21st century what it was in the 20th: the greatest country in the world. Thanks for listening. And Happy New Year. ####

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Photos: Manuel Balce Ceneta / Associated Press (lone worker vents hot air from the Capitol); Cheryl Senter / Associated Press (Ayotte); Carolyn Kaster / Associated Press; Associated Press.

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Thursday, January 6, 2011

Making Money Jobs

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