Fewer U.S workers employed by foreign companies

Sep 27 2006 by Nic Paton Print This Article

The number of U.S workers employed by foreign companies has dropped by nearly 10 per cent in the past six years, raising fears that America could be losing its edge in the global competition to generate jobs.

A report by the Organization for International Investment found the number of workers in the U.S employed by foreign companies dropped by 2.4 percent in 2004 to 5.12 million, marking the fourth consecutive annual decline.

Since hitting an all-time high of 5.66 million workers in 2000, foreign company hiring of Americans had fallen by 9.6 percent.

That four-year performance contrasted with a 43.1 per cent surge in the six years from 1994 to 2000, said Associated Press, which obtained a copy of the report ahead of its official publication.

The drop since 2000 is being attributed to a number of factors, including an extended period of weak job growth following the 2001 recession and increased productivity in manufacturing, which meant more output could be produced with fewer workers.

Todd Malan, OII president, said the decline also pointed up the need to ensure the U.S remained an attractive place for foreign companies to put their operations, something he said could not be guaranteed.

If Congress, as has been suggested, made the federal review process for foreign takeovers more cumbersome, that would further harm the investment climate in the U.S.

"The United States can't assume global companies will always continue to invest and employ people here," he said.

"The challenge for policymakers is to ensure our nation remains a competitive location for investment," he added.

Even with the declines in recent years, foreign companies still employed 4.5 per cent of the private industry workforce and in manufacturing was an even higher 11.8 per cent.

That represented jobs that paid $63,428 in average compensation in 2004, one-third higher than all U.S. companies paid, the report said.

In a separate report on Tuesday, the U.S lost its top ranking in a survey of the most economically competitive countries, falling to sixth place, with the top spot in the index by the World Economic Forum taken by Switzerland.