Pat Cleary reports on a new study by the National Association of Manufacturers which finds that the U.S. suffers from a 32 percent non-wage “cost disadvantage” in relation to our major trading partners/competitors. The two main culprits appear to be our corporate tax rate (the second highest in the world, according to Cleary) and our tort costs (the highest in the world).
Three years ago, NAM estimated our cost disadvantage to be 22 percent. Though tort costs have not risen since then in relation to our competitors, corporate tax rates have because certain other countries have lowered their rates. Other major contributors to the increase in our disadvantage include an increase in what our manufacturers pay for natural gas compared to other countries (an odd phenomenon considering how much natural gas we as a nation sit on) and regulatory compliance costs.
Pat’s conclusion: “Congress can certainly fix most of this. Or they can run around making speeches about how pro-business they are. That’s a whole lot easier.”