Foreign Direct Investment Falls
During the first six months of the year, foreign direct investment dropped due to the viability of emerging markets, according to Politico.
According to the report, through June FDI totaled $76.2 billion. That is about $10 billion behind the pace set last year.
Instead of investing in the U.S., the money is being spent in places like China, Brazil and India.
Nearly 80 percent of all FDI in the U.S. comes from Europe and Japan.
In 1998, 40 percent of worldwide foreign investment was directed at the U.S. Today, that number has fallen to just 17 percent.
The numbers represent a major failure on the part of the federal government, which for years now has been actively trying to encourage more FDI in the U.S.
“These are baby steps, and we need to put some muscle behind it,” Nancy McLernon, president and CEO of the Organization for International Investment, told Politico.
This year, the Commerce Department even launched a national initiative designed to attract more investment in the U.S.
That’s what happens when you systematically destroy your own manufacturing base through failed trade policies – you’re forced to beg others to invest in your economy and create jobs.
A Commerce Department report even went so far as to claim that jobs created through FDI pay 30 percent more, on average, than those created by American companies.
The fact is, however, that foreign companies that create jobs in America generally pay less. Not only do they not pay as well as their American counterparts, they also drive down wages domestically.
In the auto industry, foreign companies have flocked to America in recent years. The result has been lower wages for workers at America’s Big Three automakers, a dwindling market share for Chrysler, Ford and General Motors, and an increase in outsourcing by those companies.
Ikea recently opened a manufacturing facility in Danville, Virginia. The company has paid considerably lower wages to its U.S. workers than workers in Sweden, tried to stop the formation of a union, faced charges of racial discrimination and forced employees to work overtime hours with little to no notice.
In Sweden, Ikea workers start out making about $19 per hour and are afforded five vacation weeks of their choosing. In America, workers start out at about $8 per hour and are given 12 vacation days, eight of which are picked by the company.
Some American workers start out at even lower wages because the company often hires employees from temp agencies. Those workers are not only paid a lower starting wage, but are provided with no benefits. About one-third of the factory’s employees are temporary hires.
