Sunday, June 24, 2018
Business

PolitiFact: Cruz statement on jobs moving overseas under Obama is mostly false

The statement

Says President Barack Obama has "been presiding over our jobs going overseas for seven years."

Ted Cruz, March 13 on NBC's Meet the Press

The ruling

We will note that there is no single data source that provides specific numbers of jobs flowing overseas. We did find a couple of studies that touched on this subject; however, each has drawbacks.

One source of data is the National Organizations Survey, a pilot study of U.S. businesses and nonprofits described in a paper by Clair Brown of the University of California at Berkeley, Timothy Sturgeon of the Massachusetts Institute of Technology, and Connor Cole of the University of Michigan. The survey was conducted in 2010, meaning that it captured a snapshot in time, rather than a study of changes over time.

The survey found that about 23 percent of full-time employees worked at organizations that do international outsourcing, meaning that they either had such duties as sales, research, transportation and customer service handled by a part of the company based in another country, or by contracting with an overseas company to handle those tasks.

According to the study, about a third of full-time employees with large organizations worked for one doing international outsourcing; for smaller organizations, the rate was smaller, less than 10 percent.

That said, "for the typical U.S. employee's organization, the majority of costs continue to be in the United States," the authors concluded.

The other study does show changes over time, though it's worth noting that it was published by the Economic Policy Institute, a left-leaning group that has taken a hard line against the flow of American jobs overseas.

The Economic Policy Institute study found that between 2001 and 2013, a growing U.S. trade deficit with China "eliminated or displaced 3.2 million U.S. jobs," of which 2.4 million were in manufacturing. "These lost manufacturing jobs account for about two-thirds of all U.S. manufacturing jobs lost or displaced between December 2001 and December 2013," the paper concluded.

But while Cruz has a point that jobs have indeed been shifting overseas under Obama, there's a distinct problem with Cruz's contention: The way Cruz phrased it, it sounds like it started under Obama, and that simply isn't the case.

"Most of the advanced economies of the world have long moved into a new, postindustrial phase of development," Dani Rodrik of Harvard University's John F. Kennedy School of Government wrote in a November 2015 paper. "These economies have been deindustrializing for decades, a trend that is particularly noticeable when one looks at the employment share of manufacturing. … In the United States, manufacturing industries' share of total employment has steadily fallen since the 1950s, coming down from around a quarter of the workforce to less than a tenth today."

Indeed, in February 2003, the cover of a special issue of BusinessWeek magazine asked, "Is Your Job Next? A new round of globalization is sending upscale jobs offshore. They include chip design, engineering, basic research — even financial analysis. Can America lose these jobs and still prosper?"

That was about six years before Obama took office. In fact, when PolitiFact asked Margaret McMillan at Tufts University whether this pattern predates Obama, she emailed back, "Hell yes," followed by 12 exclamation points.

In fact, the decline in U.S. manufacturing employment between 1987 and 2015 started 22 years before Obama took office.

Cruz said that Obama has "been presiding over our jobs going overseas for seven years." While the pattern has been occurring under Obama, it is hardly new or unique to Obama. We rate the statement Mostly False.

Edited for print. Read the full version at PolitiFact.com.

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