The direct participation of U.S. affiliates of foreign-headquartered companies in the United States as manufacturers, wholesalers, retailers, tech companies and financial service providers contributes meaningfully to the quality and value of U.S. output. But this dynamic is particularly beneficial to U.S. workers. When companies intent on succeeding enter new markets, they want to attract, train, and retain the best workers they can find. Offering better compensation and more generous benefits is a proven strategy for attracting the best workers, and that competition tends to have ripple effects through labor markets and the economy.
As the data in Table 1 reveal, average per worker compensation of $79,040 at international companies is 24 percent higher than the U.S. private sector overall. Meanwhile, the growth in employee benefits and pension/profit sharing expenditures at international companies has dramatically outpaced growth in the private sector overall.
Between 2001 and 2015, international companies:
- Increased annual compensation from $327 billion to $539 billion, or by 26.9 percent in real terms.
- Increased expenditures on employee benefits from $27 billion to $54 billion, or by 61.4 percent in real terms.
- Raised their contributions to employee pensions and profit-sharing programs from $8.7 billion to $21.4 billion, or by 99.7 percent in real terms.