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India has only 0.6% jobs from US firms

July 30, 2005 14:06 IST

India and China together account for only 1.6 per cent of total employment of American multinationals by way of outsourcing, the government's figures have revealed, dispelling notions spread by critics of offshoring that the two countries are swallowing American jobs.

In 2003, US MNCs employed 344,000 workers in China, up from 252,000 in 2000. They employed 131,000 in India, up from 71,000 in 2000.

However, combined, India and China amounted to just 1.6 per cent of the total employment of US multinationals.

Latest figures released by the US Commerce Department show that by contrast, Canada was home to more than three times as many workers for US multinationals as China.

The United Kingdom was home to about nine times as many workers as India.

Also, for each job in low- or mid-wage countries in 2003, US companies employed more than 10 workers at home.

The author of the report, Raymond Mataloni, said the numbers 'don't provide a lot of support for the notion that massive offshoring is going on.'

He noted that 74 per cent of all output by multinationals was produced in the US in 2003.

That was down from 78 per cent in 2000 but, viewed over a longer period, it has not changed much. In 1977, multinationals produced 75 per cent of their total output at home.

Joseph Carson, an economist at Alliance Capital Management LP, said that manufacturing employment fell at US plants and their foreign affiliates in 2003.

This suggests that outsourcing is not the only trend at play in multinational behaviour.

The increased use of technology and improved productivity is also damping employment, he said.

From 2000 to 2003, employment by US multinationals rose 193,000 or 2.4 per cent, to 8.4 million at affiliates abroad. During that period, US employment by American multinationals declined 2.2 million, or 9.1 per cent, to 21.7 million.

Low- and mid-wage nations amounted to a relatively small outpost for US multinationals.

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Number of User Comments: 1

Sub: what about outsourcing to TCS,Wipro,Infy?

This is a total blind article in my view. The concern in the US is not just about MNCs outsourcing work to their own development ...

Posted by Shyam


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