The Final State of the Union
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Summary:
Austan Goolsbee, Chairman of the Council of Economic Advisers, discusses a new report on the positive impact of direct investment by foreign companies on the U.S. economy.
Today, President Obama released a statement on the United States Commitment to Open Investment Policy. The CEA also released a report on the benefits of foreign-based companies investing in the United States (known more formally as “Inbound Foreign Direct Investment”).
Our report highlights how the Administration’s open investment policy allows foreign-based companies to grow and expand their businesses across the country. These companies are building new facilities, investing in research and development, and growing warehouses, sales offices and service centers—creating millions of high-quality, well-paying jobs for American workers. These firms paid out wages and other forms of compensation that averaged more than $71,000 per U.S. employee in 2008, as compared to average earnings of $54,000 for full-time annual workers in the economy as a whole.
The U.S. continues to receive the most foreign direct investment of any country in the world. In 2010, U.S. inbound foreign direct investment rebounded sharply and increased by 49 percent from the economic crisis level it reached in 2009. This investment is particularly important to the U.S. manufacturing sector. In 2008, the U.S. affiliates of foreign corporations employed 13 percent of the entire manufacturing workforce in the United States. And over 42 percent of the US affiliates’ total value-added production in 2008 was concentrated in the U.S. manufacturing sector.
Last week, the President’s Council on Jobs and Competitiveness put forward a set of ideas for accelerating private sector job growth, and one of their recommendations was further promoting foreign direct investment. Additionally, the Administration launched the SelectUSA Initiative to facilitate additional investment, reconfirming the federal government’s commitment to an open investment climate.
To compete for the best jobs and to develop the industries of the future, the U.S. will continue to pursue an open investment climate to attract businesses to build, develop and expand their companies across the nation.
To read our full report, click here.
Austan Goolsbee is the Chairman of the Council of Economic Advisers.
