The Success of U.S. Companies Abroad Supports Good Jobs at Home

New government data show that U.S. companies that operate around the world employed 29.3 million Americans in 2019, accounting for more than 22% of U.S. private sector employment. Average compensation earned by American workers at these American-based multinational companies (MNCs) was $82,700 — 20% higher than compensation earned by workers in other U.S. private businesses.

The success of U.S. MNCs is driven by an American workforce, and the economic benefit is felt here at home.

• These companies conduct most of their activity in the U.S. and two-thirds of their global workforce are American workers.
• Fully 75% of the value added from their worldwide activities was produced in the United States in 2019.
• U.S. MNCs made $739 billion of their capital investments in the U.S., representing 78% of their worldwide capital expenditures.
• American companies with global operations also did $350 billion of research and development in the U.S., accounting for 86% of their worldwide R&D and more than 70% of all R&D by U.S. businesses.

The contributions of U.S. MNCs to U.S. jobs and the U.S. economy are substantially greater than suggested by these statistics since their many thousands of U.S. suppliers create millions of additional jobs across all industries and in businesses of all sizes.

As the Bureau of Economic Analysis noted last year, in 2018 — the first year following the 2017 tax act that modernized the U.S. corporate tax system to provide more competitive tax rules for American companies — employment, value added, and investment in plant and equipment of U.S. MNCs grew faster in the United States than abroad.

Data for 2018 and 2019 combined show these trends are continuing and that U.S. MNCs are expanding their domestic activities at a faster rate than their foreign activities: employment, capital expenditures, value added, and R&D all grew faster in these companies’ U.S. parent operations than in their foreign affiliates since enactment of the 2017 tax act.

When U.S. companies expand abroad, they create good jobs at home. For every 100 jobs a U.S. company adds abroad, research suggests the company will increase its U.S. jobs by 130 workers.

If Congress upends the 2017 international tax rules it will undercut American companies in the global marketplace and hurt their workers in the United States.

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To learn more about the Alliance for Competitive Taxation, please visit www.actontaxreform.com.