'There is a shift in economic power that's going on and will continue. China just became the world's second-largest economy,' says David Wyss, chief economist at Standard & Poor's, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the U.S.
Take the example of DuPont, which wowed the world in 1938 with nylon stockings. Known as one of the most innovative American companies of the 20th century, DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 47 percent this year.
DuPont's work force reflects the shift in its growth: In a presentation on emerging markets, the company said its number of employees in the U.S. shrank by 9 percent between January 2005 and October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.
"We are a global player out to succeed in any geography where we participate in," says Thomas M. Connelly, chief innovation officer at DuPont. "We want our resources close to where our customers are, to tailor products to their needs."
While most of DuPont's research labs are still stateside, Connelly says he's impressed with the company's overseas talent. The company opened a large research facility in Hyderabad, India, in 2008.
Rising middle class
A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined.
"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institute and formerly the World Bank's chief economist for East Asia and the Pacific.
Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago.
The company would not say how many new U.S. hires it has made in 2010. But its latest new investments are overseas, including $240 million for three bottling plants in Inner Mongolia as part of a three-year, $2 billion investment in China. The three plants will create 2,000 new jobs in the area. In September, Coca-Cola pledged $1 billion to the Philippines over five years...."
The median of forecasts from analysts polled by Reuters was for a reading of 56.
Consumers’ labor market assessment worsened. The “jobs hard to get” index rose to 46.8 percent in December from 46.3 percent last month, while the “jobs plentiful” index dropped to 3.9 percent from 4.3 percent.
“U.S. consumers are still worried about high unemployment, housing market stagnation and the generally meager growth they’ve seen so far,” said Kathy Lien, director forcurrency research at GFT in New York.
A separate report on Tuesday showed the Standard & Poor’s/Case-Shiller composite index of 20 metropolitan areas declined 1 percent in October from September on a seasonally adjusted basis."
The Data and the Reality
By BOB HERBERT
I keep hearing from the data zealots that holiday sales were impressive and the outlook for the economy in 2011 is not bad.
Maybe they’ve stumbled onto something in their windowless rooms. Maybe the economy really is gathering steam. But in the rough and tumble of the real world, where families have to feed themselves and pay their bills, there are an awful lot of Americans being left behind.
A continuing national survey of workers who lost their jobs during the Great Recession, conducted by two professors at Rutgers University, offers anything but a rosy view of the economic prospects for ordinary Americans. It paints, instead, a portrait filled with gloom.
More than 15 million Americans are officially classified as jobless. The professors, at the John J. Heldrich Center for Workforce Development at Rutgers, have been following their representative sample of workers since the summer of 2009. The report on their latest survey, just out this month, is titled: “The Shattered American Dream: Unemployed Workers Lose Ground, Hope, and Faith in Their Futures.”
Over the 15 months that the surveys have been conducted, just one-quarter of the workers have found full-time jobs, nearly all of them for less pay and with fewer or no benefits. “For those who remain unemployed,” the report says, “the cupboard has long been bare.”
These were not the folks being coldly and precisely monitored, classified and quantified as they made their way to the malls to kick-start the economy. These were among the many millions of Americans who spent the holidays hurting.
As the report states: “The recession has been a cataclysm that will have an enduring effect. It is hard to overstate the dire shape of the unemployed.”
Nearly two-thirds of the unemployed workers who were surveyed have been out of work for a year or more. More than a third have been jobless for two years. With their savings exhausted, many have borrowed money from relatives or friends, sold possessions to make ends meet and decided against medical examinations or treatments they previously would have considered essential.
Older workers who are jobless are caught in a particularly precarious state of affairs. As the report put it:
“We are witnessing the birth of a new class — the involuntarily retired. Many of those over age 50 believe they will not work again at a full-time ‘real’ job commensurate with their education and training. More than one-quarter say they expect to retire earlier than they want, which has long-term consequences for themselves and society. Many will file for Social Security as soon as they are eligible, despite the fact that they would receive greater benefits if they were able to delay retiring for a few years.”
There is a fundamental disconnect between economic indicators pointing in a positive direction and the experience of millions of American families fighting desperately to fend off destitution. Some three out of every four Americans have been personally touched by the recession — either they’ve lost a job or a relative or close friend has. And the outlook, despite the spin being put on the latest data, is not promising.
No one is forecasting a substantial reduction in unemployment rates next year. And, as Motoko Rich reported in The Times this month, temporary workers accounted for 80 percent of the 50,000 jobs added by private sector employers in November.
Carl Van Horn, the director of the Heldrich Center and one of the two professors (the other is Cliff Zukin) conducting the survey, said he was struck by how pessimistic some of the respondents have become — not just about their own situation but about the nation’s future. The survey found that workers in general are increasingly accepting the notion that the effects of the recession will be permanent, that they are the result of fundamental changes in the national economy.
“They’re losing the idea that if you are determined and work hard, you can get ahead,” said Dr. Van Horn. “They’re losing that sense of optimism. They don’t think that they or their children are going to fare particularly well.”
The fact that so many Americans are out of work, or working at jobs that don’t pay well, undermines the prospects for a robust recovery. Jobless people don’t buy a lot of flat-screen TVs. What we’re really seeing is an erosion of standards of living for an enormous portion of the population, including a substantial segment of the once solid middle class.
Not only is this not being addressed, but the self-serving, rightward lurch in Washington is all but guaranteed to make matters worse for working people. The zealots reading the economic tea leaves see brighter days ahead. They can afford to be sanguine. They’re working.
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