real, estate, corporate, study, says, pollina, jobs

Offshore outsourcing slams U.S. real estate corporate industry, study says

30 Nov 2004 | (Survey)

Off-shoring jobs not only leaves a trail of unemployed Americans, it results in emptier office buildings and factories — reports “Top Ten Pro-Business States 2005: Keeping Jobs In America,” a new study by Pollina Corporate Real Estate.

REITs, building owners, brokers and developers are starting to feel the pinch.

“Every year the US real estate industry loses the equivalent of one-third of the Chicago CBD—53 million square feet of space is not occupied resulting in approximately $1.2 billion in lost rent—due to offshore outsourcing,” says Ronald R. Pollina, president of Chicago-based Pollina Corporate Real Estate and the study’s author. “And the trend is accelerating. Approximately 8,500 industrial facilities have been closed or significantly vacated during the past four years as blue collar jobs move to low wage markets across the globe.”

The Pollina study adds that millions of Americans are unnecessarily losing their jobs to cheaper overseas competitors. Why? Because the federal government and most states are not providing the training, capital investment, incentives and general positive business environment that business and industry needs to compete in the global marketplace. “While some overseas job losses are inevitable, a surprising number of jobs can be kept in the U.S. if we make the right efforts to work with businesses,” says Pollina, a real estate economist.

“Each job loss has a reverse multiplier effect on the local economy of between 1.5 and 1.7 jobs. This means that the impact of losing the 3 million U.S. manufacturing jobs that vanished between July 2000 and January 2004 could reach 5.1 million in total lost jobs,” says Pollina. “The long term, cumulative effect of off-shoring jobs is certain to impact the real estate industry on every level.”

“Keeping U.S. jobs requires a triage approach,” Pollina adds. “Governments must identify which jobs will move offshore no matter what, those that will stay, and jobs that can be saved by providing the right pro-business environment and economic incentives. Anyone who believes that we are only experiencing competition that in time will be overcome by superior U.S. ingenuity is not only arrogant, but foolhardy. They don’t understand the complexities of the international economic system.”

The Pollina Corporate list of the Top Ten Pro-Business States 2005 is headed by South Carolina. Virginia, South Dakota, North Carolina, Alabama, Wyoming, Georgia, Washington, Florida and Oklahoma follow it.

“The fact is no one in Washington, D.C., and few state officials are doing their jobs to retain high tech and manufacturing jobs,” says Pollina. “State and federal political leaders need to school themselves in what it takes for a business to survive and thrive in cutthroat global competition. To save U.S. jobs, government dollars must be directed to stimulate technology investment and worker training and address the layers of federal, state and local bureaucracy that stifle economic growth.”

“A company that can replace an aging factory with an efficient, automated plant is better positioned to keep its manufacturing jobs here, and the states that have provided assistance in this area have been more successful at retaining jobs for Americans,” says Pollina. “If a business weighs
whether to stay or ship jobs abroad, they are going to consider a state or region’s effective business tax rates, worker compensation laws, right-to-work laws, human resources, energy costs and infrastructure spending. State and federal officials must address these realties.”

Related Content: