As debt buyers we always pay close attention to employment statistics because of the close correlation between credit card charge offs and the unemployment rate. Basically high unemployment leads to high charge-offs and a large amount of inventory available for purchase (see this post for further explanation). A recent Wall Street Journal article adds credence to our presumption of continued high unemployment for the foreseeable future.
One More Reason For Continued High Unemployment
According to a recent Wall Street Journal article, multinational corporations employ a fifth of the American workforce. That in and of itself is not bad but the fact is that they have been cutting back jobs at home while creating jobs over seas.
Data from the U.S. Commerce Department shows that in 1990’s multinationals added 4.4 million jobs in the U.S. and 2.7 million jobs overseas. Contrast that with 2000’s in which multinationals CUT 2.9 million jobs from the U.S. and added 2.4 jobs abroad.
Economist and former advisor to George W. Bush is very concerned. He states, “for every one job that U.S. multinationals created abroad…they created nearly two U.S. jobs in their [U.S.-based] parents. That was true in the 1990s, it is no longer.”
This is quite a shift that should continue to keep unemployment at a relatively high rate for years to come.