How we can boost the economy through foreign direct investment

This month, the U.S. Census Bureau reported income growth rates of 5.2 percent in 2015, the first gain since 2007. This is great news for some but the reality is these numbers suggest that the U.S. continues to lag behind where we should be.

In real terms, median household income – $56,516 – remains below where it was before the Great Recession. It is also well below the high of $57,909, which was set back in 1999. Add skyrocketing college costs, housing costs and health care costs, and the middle class lifestyle simply seems to be slipping away.

{mosads}There are solutions for these problems and there is one in particular we have come together on in agreement and are working across the aisle to implement.

We believe that an obvious source of quality jobs is from encouraging global companies to invest in the U.S. economy.  Thousands of foreign companies have chosen to invest and generate millions of American jobs, not to mention funding innovative research and development, worker training, and community development.

A recent study by the Organization of International Investment (OFII) found that foreign direct investment (FDI) by global companies supports 24.3 million American jobs – one in seven jobs in the private sector.

Global companies provide not only 6.1 million direct U.S. jobs, but they also support 8.5 million supply chain-related jobs, and another 9.7 million jobs related to the economic activity of FDI companies, called “paycheck-supported jobs,” in the United States.

This investment is critical to the economic wellbeing of our states. In California, global investment supports 2.4 million jobs, with each direct job supporting three additional jobs related to the supply chain and purchasing power of employees. These FDI jobs pay $90,000 per year in wages and benefits on average, which is $26,000 higher than the state average.

No sector demonstrates the power of FDI more than manufacturing. After decades of declining employment, manufacturing has been on the rise in recent years and FDI is driving this turnaround.

FDI companies created 65,000 new manufacturing jobs in the United States between 2012 and 2013, and currently support a total of 3.9 million manufacturing jobs – 30 percent of all U.S. manufacturing employment.  In Kentucky, the average FDI manufacturing job pays nearly $75,000 per year compared to state average of $44,700.

And global employers are doing more than just providing high-paying jobs. FDI companies are driving innovation and are responsible for 16 percent of all U.S. research and development spending. Toyota recently announced the investment of $100 billion in a Silicon Valley incubator to pioneer innovation. The company also established one of its largest manufacturing plants in the world in Kentucky, where it has partnered with local community colleges to help train the next generation of workers and give them a head start in their careers.

These are the type of high-quality, well-paying jobs we need, and attracting more FDI to the United States should be a top economic priority for Congress and the next President.

If it isn’t, we will be placing an obstacle in the way of our own economic expansion while some other nations are removing theirs. Both China and India, this month, announced plans to streamline and simplify the application and approval processes for foreign companies to invest there.  

Still, America is the top destination in the world for FDI, and with good reason. We have an unmatched skilled workforce, clear rules for business, and the largest cohesive consumer market in the world. Our goal should be to make sure that businesses around the world know what so many already do—the best way to succeed in the global marketplace is to hire Americans.

Recently, more than 2,000 participants representing companies from across the world gathered in Washington for the U.S. Department of Commerce’s SelectUSA Investment Summit. The event promoted the role of global companies in the U.S. economy and pitched global investors on the merits of investing in the United States. 

That same week, we formally launched the Congressional Global Investment in America Caucus along with Reps. Jim Himes (D-Conn.) and George Holding (R-N.C.).  This caucus is dedicated to helping Members of Congress better understand how U.S. workers can benefit whenever global companies invest and create opportunities in communities around the country.  Our caucus represents a bipartisan effort to keep the United States competitive in the global race for investment.

The new caucus matters because American workers need Congress in their corner. Smart policies and world-wide outreach will make sure that as global competition intensifies, American workers are the best trained and best supported. Instead of recrimination and rhetoric, Congress needs to do everything it can to support these workers.

Reps. Mike Honda (D-Calif.) and Andy Barr (R-Ky.) are two co-chairs of the Congressional Global Investment in America Caucus.

The views expressed by authors are their own and not the views of The Hill.