Fact of the Week: Foreign Direct Investment Supports 8.5 Million U.S. Jobs

International firms that invest in the United States contribute greatly to the U.S. economy. They directly employ 6.1 million workers, or just above 5 percent of private sector employment. Indirectly, these foreign firms support many more jobs, including jobs in the U.S. supply chains that provide goods and services to the foreign investors, and jobs in other sectors as the U.S. employees of foreign firms spend wages that tend to be higher than the national average.

In fact, the U.S. International Trade Administration estimates that the 6.1 million jobs directly sustained by foreign direct investment in turn support 2.4 million more jobs indirectly—for a combined total of 8.5 million American jobs, or just above 7 percent of private sector employment.

Foreign direct investment has the potential to play an even larger role in the U.S. economy, but high corporate taxes often steer would-be foreign investors to other countries with more competitive rates. To learn more about what polices the U.S. government can change to stimulate innovation, read ITIF’s January 2016 report Contributors and Detractors: Ranking Countries’ Impact on Global Innovation.