Report Says U.S. Competitiveness Declining

The National Association of Manufacturers (www.nam.org) says structural costs for domestic manufacturers have increased to 31.7 percent from 22.4 percent since 2003 compared to nine major trading partners.

The National Association of Manufacturers, the Manufacturing Institute and the Manufacturers Alliance /MAPI updated its 2003 study on the costs of doing business in the U.S., and now say that U.S. manufacturers have become less competitive than they were three years ago because of changes in structural costs.

"The sharp rise in these non-wage costs represents a significant and long-term problem for our nation's manufacturers and America's economy," said John Engler, president of the National Association of Manufacturers.

The study, called "The Escalating Cost Crisis," was done by Jeremy Leonard, an economist with MAPI, was released Sept. 27. Leonard analyzed five structural, non-production costs: corporate tax rates, employee benefits, legal costs, natural gas prices, and pollution abatement, and compared those costs between the U.S. and the nine trading partners.

The corporate tax rate was the highest burden and the largest contributor to the increase in structural costs, being responsible for more than one third of the increase in the cost burden. While the U.S. corporate tax rate has remained the same since 2003, the study said the gap widened because trading partners lowered their statutory tax rates.

"By standing still, the United States is falling behind," Engler said at a news conference.

The National Association of Manufacturers and its members are pursuing an aggressive agenda to enhance their ability to compete in the global marketplace, and are addressing legislative goals to remedy the declining state of competitiveness, Engler said.