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Employment
is not the point
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TNCs: Employment is not the point
Susan George
TNI
Every year the United Nations Conference on Trade and Development
[UNCTAD] publishes the World Investment Report. This document
invariably supplies a wealth of information concerning Transnational
Corporations - at least if the reader is armed with a pocket
calculator and prepared to do hundreds of sums herself. UNCTAD's
authors supply no totals. Perhaps they fear that doing so might
make certain facts too clear.
It
is particularly instructive to examine the changes taking
place among the world's top 100 firms. UNCTAD annually classes
these engines of globalisation from 1 to 100, ranked according
to their "foreign assets".
By
comparing the data of the 1998 Report [figures for 1996] with
that of the 1995 Report [figures for 1993], one learns that
during this period, the top 100 firms increased their sales
by almost a quarter, without creating a single job in global
terms [in fact, with 63.592 fewer employees].
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The
world's top 100 firms
[in billions of US $ sales and in number of jobs]
|
| Year
|
1993
|
1996
|
%
Change
|
| Sales
|
$
3.335
|
$
4.128
|
+
24%
|
| Jobs
|
11.868.873
|
11.805.281
|
-
0,5%
|
|
|
|
|
Naturally, one must point out that the 100 corporations appearing
on UNCTAD's list are not identical from year to year, so the
above figures are not strictly speaking comparable. The wave
of mergers and acquisitions also makes comparisons hazardous.
Furthermore, several huge Japanese trading companies are always
prominent on the lists yet supply a insignificant number of
jobs [commonly 8-10.000] considering their sales volume. So
it is useful to leave them out; then to examine the figures
sector by sector for the companies that appear on the lists
in both the 1995 and 1998 Reports:
|
Sector
|
Number
of TNCs concerned
|
Changes
in sales 1993-1996, %
|
Changes
in employment 1993-1996,%
|
|
Automotive
|
11
|
+
25
|
-
3
|
|
Petroleum
|
11
|
+
21
|
-
28
|
|
Electronics,
computers
|
16
|
+ 16
|
0
|
|
Food,
beverages, tobacco
|
9
|
+ 20
|
+ 0.5
|
|
Chemicals
|
6
|
+
24
|
-
15
|
|
Pharmaceut's
|
4
|
+
34
|
+
3
|
|
Metals,
mining
|
3
|
+
12
|
-
13
|
|
Total
|
60
|
+
21
|
-
6
|
Clearly,
these transnationals have been rapidly shedding employees, particularly
in petroleum and chemicals and despite impressive sales gains.
A slight increase in employment [1/2 percent] is registered
in the food/beverages category because fast-expanding, fast-food
firms McDonald's and Pepsico hired 41% and 15% more employees
respectively between 1993-1996.
For
these 60 giant corporations, productivity also grew phenomenally.
Each one of their employees, from the CEOs to the janitors,
was responsible on average for
$241.000 in sales in 1993 but for $312.000 worth in 1996 -
a rise of nearly 30%.
Despite this great leap forward in worker productivity, the
figures make clear that the largest TNCs still find their
staff too expensive, especially in their home countries. UNCTAD
divides employment provided by the top 100 TNCs into two categories:
"local" [in the TNC's country of origin, all of
them rich developed countries] and "foreign" [in
all other countries, whether developed or "emerging"].
The displacement of jobs from the "local" to the
"foreign" in the space of only four years is striking.
|
|
Changes
in employment between 1993-1996
|
| Top
100 TNCs |
Change
in number of jobs
|
Change
in % terms
|
Jobs:
local
|
-
927.344
|
-
14%
|
| Jobs:
finance |
+
863.752
|
+
17%
|
|
|
Naturally, the same caveats on strict comparability as those
mentioned above apply here; nor do UNCTAD's figures allow
one to say exactly where the 14% of "local" jobs
went. Still, as nearly a million jobs were lost in the "home"
countries and even though some of the growth in "foreign"
employment may have occurred in the rich countries, it is
reasonable to assume that many of the local jobs migrated
to places where salaries and benefits are well below those
of the home countries.
With
more than four trillion dollars in sales worldwide as of 1996,
the top 100 transnational corporations now represent over
15% of Gross World Product. This they do while employing fewer
than twelve million people worldwide [although UNCTAD says
they provide one to two jobs indirectly for every person employed
directly]. Nowhere, except in small states like Singapore
or Hong Kong, do TNCs employ directly more than one percent
of the available workforce. In recent years, around three-quarters
of all so-called "investment" has been devoted to
mergers and acquisitions, not to "greenfield" investment;
"M and As" almost invariably result in thousands
of job losses as newly merged companies restructure in an
attempt to increase shareholder value. The conclusion is inescapable:
It is time to recognise that, at least for the giant firms,
TNC investment is negatively related to employment.
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References
1.
World Investment Report 1998, United Nations, New York and
Geneva, November 1998
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