What's good for U.S. multinationals ...
Lobbyists for U.S. companies with sprawling operations overseas have spent months now trying to fend off higher taxes on foreign profits. Democrats say these firms are shipping jobs overseas and hurting American workers.
But according to a recent report by the McKinsey Global Institute (registration required), these companies pull more than their weight in contributing to the health of the country's economy. Three-quarters of U.S. real GDP growth since 2000 has been driven by these companies.
Says the report: "U.S. multinationals represent less than 1 percent of all U.S. companies, yet they contribute disproportionately to the U.S. economy's growth and health in many ways. U.S. multinationals accounted for 23 percent of U.S. private sector GDP (or value added) in 2007. However, they contributed 31 percent of the growth in real GDP and 41 percent of U.S. gains in labor productivity since 1990. U.S. multinationals' outsized contributions to productivity growth matter greatly because productivity increases have delivered nearly three-quarters of U.S. real GDP growth since 2000, with the rest coming from employment gains -- the reverse of the situation 30 years ago."
As you can see from the table below, they've contributed hugely to productivity, which juices companies' profits because they can make more money with less labor. But they've contributed only 11 percent of gains in employment.
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