America is losing out in the race to attract good jobs. Matthew Slaughter of Dartmouth’s Tuck School of Business and Laura Tyson of Berkeley’s Haas School of Business point out that multinational firms (which pay higher wages than non-multinationals) increased employment in America by 24% in the 1990s. But since then they have been cutting back on jobs in America. They have moved dull repetitive tasks abroad, and even some sophisticated ones, too. The proportion of the employees of American multinationals who work for subsidiaries abroad rose from 21.4% in 1989 to 32.3% in 2009. The share of research-and-development spending going to foreign subsidiaries rose from 9% in 1989 to 15.6% in 2009; that of capital investment rose from 21.8% in 1999 to 29.6% in 2009. In HBS’s survey, alumni reported that when their firms had to decide whether to do something in America or elsewhere, America lost two times out of three.But wait, folks, it ain't all bad:
This relative deterioration in America’s business climate has coincided with a spectacular rise in the incomes of the sort of people who read the Review.