Foreign hiring may be good for U.S.

Alisa Roth Mar 24, 2010
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Foreign hiring may be good for U.S.

Alisa Roth Mar 24, 2010
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Steve Chiotakis: We hear a lot of rhetoric coming out of Washington claiming companies doing business overseas costs us jobs at home. But a study out today from Dartmouth College and the Business Roundtable suggests it may be time to rethink that idea. Marketplace’s Alisa Roth reports.


Alisa Roth: The researchers used data from the Commerce Department to see what happens here in the U.S. when companies expand their reach overseas.

Matt Slaughter is a professor at the Tuck School of Business at Dartmouth. He wrote the study. He says the analysis turns the common wisdom upside down:

Matt Slaughter: On average, when companies are hiring more people in foreign markets, when they’re undertaking more capital investment in their foreign affiliates, they tend to do more hiring, more capital investment back in the U.S. as well.

For example, when a company creates jobs, it may also hire more support staff at home. And money that’s made in foreign markets can be reinvested back in the U.S.

Slaughter says the Commerce Department data doesn’t say what kinds of jobs multinationals create in the U.S. But one thing is clear:

Slaughter: They tend to then be able to pay workers good wages.

An average of 19 percent higher than domestic companies, in fact.

Slaughter says we should think about all this as the economic recovery continues. He says we need to create jobs that are capital and export-intensive — precisely the kinds of jobs that come out of multinational firms.

I’m Alisa Roth for Marketplace.

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