Multinational Companies Account for nearly all US Industrial R&D and Manufacturing Wages
WASHINGTON– Today, the International Tax Policy Forum (ITPF), an organization focused on promoting research on international tax issues, released its annual scorecard on multinational companies and the US economy.
Based on the most recent available data, the report found multinational companies accounted for 95.6 percent of domestic industrial R&D, 93.4 percent of manufacturing wages, 79.3 percent of manufacturing employment, 75.8 percent of US exports, 42 percent of nonresidential private investment, 34.3 percent of private sector wages and 28.1 percent of all private sector employment. The scorecard also shows US employees of multinational companies are compensated at a rate 21 percent higher than the US average.
“When American multinational companies are able to win in global markets, good jobs and growth are created here in the US,” said John Samuels, Chair of the International Tax Policy Forum. “Multinationals support a majority of our nation’s industrial R&D, manufacturing employment, wages and exports. Their expansive and important contributions to the US economy should not be understated.”
“The paradigm continues to change: because so much potential for growth exists outside the United States, the competitiveness of a US company increasingly depends on its ability to operate near its customers,” said Matthew J. Slaughter, Dean of the Tuck School of Business at Dartmouth College and a member of the ITPF Board of Advisors. “More and more, good jobs in America are those connected to the global economy through international investment and trade. A clear understanding of the data in this scorecard should be a guide to business and policy leaders alike.”
The foreign activities of US multinational companies are associated with increased US employment, research, and exports. The data show total employment among US multinationals’ foreign affiliates increased by 2.3 million workers between 2010 and 2014, while total employment among US parent companies increased by 3.8 million workers over the same period.
The report also explains the world economy is growing faster than the US economy – with shares of global GDP outside the United States increasing from 79 percent over the 1990-9 period to 84.5 percent in 2016.