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American Multinational Corporations

What are multinational corporations? Since 1977, the Bureau of Economic Analysis has tracked U.S.-headquartered multinationals through legally mandated surveys that collect and publicly disseminate operational and financial data. It tracks all multinational companies headquartered in the United States. The BEA defines a U.S. multinational company as any U.S. enterprise that holds at least a 10% direct ownership stake in at least one foreign business enterprise.

There was a wonderful blog called the fourteenth banker, an anonymous writer, and he or she wrote about the financial services industry from the inside.  At one point he/she quoted Harold Meyerson of the Washington Post who pointed out that “the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies’ revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power – the equilibrium that Henry Ford famously recognized when he upped his workers’ pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism – has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits.”

Congress and the President have not addressed the impact that multinational corporations have had on our economy, and especially on our workforce. Unfortunately, as long this country’s policymakers continue to focus on piecemeal solutions to our broken economy, we will continue to bleed jobs.

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