Another Supposed ‘Jobs’ Bill That Won’T Create Jobs


Just weeks before the elections and days before members of Congress left Washington, Senate Democrats and the president made one last desperate attempt to show voters that this Congress is purportedly serious about creating jobs.

The “Ending Offshoring Act” was yet another “jobs” bill, a description that has been applied to virtually every piece of major legislation since President Obama took office. First, there was the trillion dollar economic “stimulus” bill that passed in February 2009. Then there was the $26 billion bailout for state governments — that was also described as a “jobs” bill. And just recently, the president signed a $30 billion measure that would increase the federal government’s reach into community banks in a supposed effort to create jobs.

But over the course of the roughly two years since President Obama has taken office, the unemployment rate has risen from 8.1 percent in February of last year to 9.6 today, and over three million jobs have been lost.

Like the previous “jobs” measures, the offshoring bill would not really create jobs or put more people to work. In fact, it would do the opposite by imposing even more punitive taxes on those who create jobs.

Their measure would target U.S. corporations that do business abroad. While the bill purports to provide a temporary payroll tax holiday for multinational U.S. employers that hire a new worker in the United States, the business must prove that the employee is replacing an employee who had been performing a similar job abroad. Few would qualify. Then, in order to make up for the revenues lost by this tax holiday, the measure would raise taxes on multinational businesses. Specifically, it would disallow tax deductions associated with the expansion of business operations overseas and limit tax deferral of income U.S. multinational companies earn abroad by selling products in the United States.

Business is not a zero-sum game. When a company gives a job to a worker in one place, it doesn’t mean that a worker lost a job somewhere else. Indeed, the overseas operations of American companies support and create jobs right here.

According to the McKinsey Global Institute, the research division of the consulting firm, America’s multinational companies account for 19 percent of all private-sector jobs in the United States, 25 percent of all private wages, 48 percent of total export goods, and 74 percent of nonpublic research and development spending.

These companies are creating jobs both at home and abroad. McKinsey found that from 1988 to 2007, foreign employment among U.S. multinational corporations rose to 10 million from 4.8 million. During that same period, those companies increased employment in the U.S.: from 17.7 million to 22 million jobs.

If companies are punished for creating jobs overseas — as the Ending Offshoring Act would do — there may be fewer jobs created in the U.S. After all, if higher taxes hurt a company’s growth, it will have a hard time creating jobs anywhere.

Moreover, if the U.S adds to the corporate tax burden, which is already among the world’s highest, companies may send even more jobs overseas as they move their operations out of the country.

As the Wall Street Journal noted on Sept. 26, “CEO Steve Ballmer has warned that if the president’s plan is enacted, Microsoft would move facilities and jobs out of the U.S.”

For the past year-and-a-half, Congress and the administration have been pushing “jobs” bills that have not created jobs. All the while, Congress has refused to provide certainty to businesses and individuals which it could do by extending the tax rates that will expire at the end of the year.


Judy Whitehouse 6 years, 3 months ago

I apologize for bluntness, but Senator Kyl, you remain poor Jonny one-note. It's time to think outside your box.


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