Corporate 'Consensus' on Offsourcing, Inversions


America’s corporate media have generally displayed a zombie-like loyalty to the doctrines of “free trade” and unfettered corporate globalization, including the offshoring of US jobs from devastated American factory towns to low-wage, high-repression nations.

But when an editor at America’s most influential newspaper, the New York Times — a paper that has long championed globalization in both its news coverage and editorially — declares that a national consensus exists on the “right” of US corporations to seek out poor nations where they can freely impose misery-level wages, it perhaps signals that major-media coverage of corporate globalization is becoming downright delusional.

Thus we read a Sept. 14 Times article by Jeffrey Sommer, purporting to analyze the controversy over US firms staging “inversions” to avoid US taxes. Sommer takes elite media’s fawning support of globalization to hallucinatory heights by making the flat-out claim that a broad national consensus—including most American citizens — exists on the “right” of US firms to relocate jobs:

“At this stage of globalization … most American consumers, investors and politicians have tacitly accepted that if a company is profitable, doesn’t violate the law and produces appealing products and services, it can operate wherever and however it likes. …”

Certainly, there is no disputing Sommer’s all-too obvious assertion that large-scale investors and corporate CEOs unanimously embrace the unrestrained “right” to abandon the US in relocating production to potentially more profitable low-wage nations. Further, large corporate donors have forged a solid pro-globalization mentality at the highest levels of both parties. In 2012, Republican candidate Mitt Romney avidly “offshored” jobs to repressive low-wage nations like China and defended these practices. Democratic President Barack Obama, although pounding Romney on this issue, had jettisoned his own fierce 2008 anti-“free trade” positions by ramming through three NAFTA-style trade deals in 2011. Obama even declared, “as a general proposition, companies need to have the freedom to relocate.”

However, Sommer very significantly neglects the fact that Democratic members of Congress have adopted a combative stance in challenging “free-trade” agreements dating back to NAFTA in 1993 to the current proposed Trans-Pacific Partnership.

Meanwhile, Sommer’s blithe claim about “consumers”— which inevitably translates into a majority of Americas” –illustrates the yawning canyon between the perspectives of the journalistic elite and the majority of Americans.

First, Sommer and other elite journalists are far more conservative than the victims (real and potential) of corporate job relocations. Ordinary Americans understandably worry about the impact of corporate globalization on their job security and earnings:

• Fully 48% of major US corporations’ production is now occurring outside the US, according to economist Jeff Faux in his 2012 book, The Servant Society.

• Top US firms slashed 2.9 million jobs in the US during the 2000-10 period, while expanding their employment abroad by 2.4 million.

• Even as the US recovers from the Great Recession, median household income of $51,900 was 8% lower than in 2007.

• New jobs are paying substantially less than those lost during the Recession. According to “the US Conference of Mayors, the average annual wage of jobs lost in 2008-’09 was $61,637, but the average wage of job gains through the second quarter of 2014 equaled $47,171.

Second, Sommer’s claim of “consumer” acceptance of job relocation is countered by virtually every major poll of American voters on globalization. These polls show opposition to job relocation intensifying, and spreading to more affluent professionals. To cite just a few of the polls with similar outcomes:

• A 2014 poll poll for the Alliance for American Manufacturing, a group of domestic manufacturers, shows that “65% of voters consider outsourcing as the reason for a lack of new manufacturing jobs.”

• Most directly addressing Sommer’s claim of consumer acceptance of corporation’s unfettered right to relocate jobs, a 2007 Gallup poll showed fully 77% of Americans opposed the offshoring of jobs to foreign nations.

“The US public is nearly unanimous in its support of requiring that both labor (93%) and environmental standards (91%) be included in trade agreements,” according to the Chicago Council on Global Affairs in discussing its poll. In ranking the importance of possible foreign policy goals, 76% of Americans gave the top rating to “protecting the jobs” of the country’s workers, according to the same poll.

• A WSJ/NBC News poll reported on Oct. 2, 2010, showed “83% of blue-collar workers agreed that outsourcing of manufacturing to foreign countries with lower wages was a reason the US economy was struggling and more people weren’t being hired; no other factor was so often cited for current economic ills.” 

Along with contending majority support for the right of corporations to relocated jobs, the Times’ Sommer also found “intriguing” the controversy over corporate “inversions” (relocating their headquarters overseas in order to reduce their US tax burdens). Bounding ahead from his false premise, Sommer wondered why Americans would grouse over these moves which lower corporate taxes if they accepted the relocation of jobs (which of course they don’t).

Sommer approvingly quoted a business professor who stated,

“Corporate executives have a fiduciary responsibility to do the best for their shareholders that they can.Under these circumstances, it’s reasonable to expect them to explore whether their shareholders would benefit.”

Taxpayers, however, do not find the consideration of such moves “reasonable.” With even President Obama inexplicably arguing that it may be time to lower the corporate tax rate now at 35% (while now speaking out against inversions as “unpatriotic), relatively few Americans may know that the effective tax rate on US corporations is at a historic low of just 12.6%, among the lowest for advanced nations.

But even lacking specific data or contradictory messages on corporate taxes and offshoring from a Democratic president, the public is outraged by the sight of corporations abandoning America to gain lower tax rates. The Campaign for America’s Future reported:

An August poll highlighted by Americans for Tax Fairness found that “Over two-thirds of likely voters disapprove of corporate inversions, including 86% of Democrats, 80% of Independents and 69% of Republicans.”

For David Newby, chair of the Wisconsin Fair Trade Campaign, the polling on both corporate offshoring and tax “inversions” reinforce what he has heard in conversations with the public, and entirely contradict Sommer’s assumptions about popular assent to corporate operations outside the US. Further, they show the potential for the Democrats to adopt a compelling message of economic populism [astutely discussed by David Moberg in In These Times’s October 2014 issue] for the 2014 mid-terms.

“Most people feel that it is simply basic decency for corporations to refrain from abandoning the workers from whom they drew their profits, and turn their backs on the community which provided them with support and infrastructure for decades,” Newby said. “Most people feel strongly that corporations have a responsibility to their workers, the communities where they operate, and the nation.”

As for inversions, he said, “Most people think that it ought to be called exactly what it is: tax evasion, aimed at escaping the common costs of the communities in which they operate.”

Roger Bybee is a Milwaukee-based writer and University of Illinois visiting professor in Labor Education. Email

From The Progressive Populist, November 1, 2014

Blog | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2014 The Progressive Populist
PO Box 819, Manchaca TX 78652