Current and Future Challenges for U.S. Manufacturing

48. Among 9 Largest Trading Partners, Only France Has Higher Structural Costs Than the U.S.

The excess structural cost burden facing the U.S. manufacturing sector more than offsets the competitive advantage it holds with regard to labor and capital costs. This “raw cost index” was just under $30 per hour in the United States, $3 less than the trade-weighted average of our nine largest trading partners. When the effects of higher structural costs are factored in, however, this cost advantage turns into a burden of $3 per hour. The excess corporate tax burden alone erases the U.S. manufacturing advantage, and the effects of employee benefits, torts, and regulatory compliance simply add insult to injury.
China, Mexico, and Taiwan enjoy significantly lower raw production costs, although they have risen rapidly since the initial study in 2003. In China and Mexico, these costs more than doubled, and in Taiwan rose by almost 50 percent, compared with a 23 percent increase in the United States.

To Competitiveness

38

According to the UN, U.S. Manufacturing Slipped to #2

39

According to the World Bank, U.S and Chinese Manufacturing Are Comparable

40

Manufacturing's Share Within Countries Declines

41

Manufacturing Exports Alone Are Not Enough to Sustain U.S. Economic Growth

42

The U.S. Is the #1 Destination for Foreign Direct Investment

43

The U.S. Ranks High But Is Not the Easiest Country To Do Business In

44

Inflation-Adjusted Manufacturing Has Kept Up With the Overall Economy

45

Measuring the Quantity of Manufacturing GDP Is Distorted by High-Tech

46

Traditional Manufacturing Has Not Kept Up With Overall Economic Growth

47

The U.S. Has a Structural Cost Disadvantage

48

Among 9 Largest Trading Partners, Only France Has Higher Structural Costs Than the U.S

49

The U.S. Does Not Keep Pace With Falling Corporate Tax Rates

50

U.S. Healthcare Costs Are Skyrocketing

51

Commercial Tort Costs Climb Again

52

Despite Rhetoric, Regulations Are as Burdensome as Ever