Chinese workers earn one-thirtieth of what their counterparts earn here. American workers are 10 times more productive, not 30. While constraints on labor availability will increase Chinese labor costs, Chinese productivity will also rise over time. The question remains one of what can be done now to offset the advantage enjoyed by China in the area of labor. The answer is plenty.
Little Susie, depicted in a commercial as a lemonade tycoon, would have a difficult time getting her fledgling enterprise off the ground in today‘s America. Lacking an expensive business permit, she would likely be slapped with a fine. The tab for such regulatory compliance in the U.S. is estimated at $1.75 trillion annually. In support of Obama/Casey policies, regulators implemented 106 “major rules” over three years. A major rule is a regulation which imposes a cost on our economy of at least $100 million. An additional 12 dozen major rules await implementation. During the first three years of the previous administration, regulators enacted just 28 such rules*. Is it any wonder that businesses are not hiring and heading elsewhere?
A country with five times our population, China has only a tenth of our attorneys. We have become a nation where citizens, rather than rushing to the aid of bus accident victims, have been observed piling onto the bus for the purpose of filing lawsuits. The litigation industry, heavily invested in our president and supporting Sen. Casey to the tune of $2 million this election cycle, is killing the job-creating engine which built our nation. The trillion dollar cost that it imposes on our $15 trillion economy is a cost not remotely borne by China or, for that matter, any other country.
Our corporate income tax rate is 10 points higher than that in China, albeit with inappropriate loopholes that legislators like Paul Ryan seek to close. The disparity expands by five points when state assessments are included. In addition, we overly penalize companies for repatriating net income earned by subsidiaries abroad. As a result, some trillion dollars which could be invested in our economy sits offshore. The proposed Obama/Casey corporate tax plan would actually take more away than it would deliver in tax relief. It’s a job killer and runs contrary to the recommendations of the President’s own Jobs Counsel, a group with whom he has not met since January.
While Casey and Obama say their policies supposedly promote a cleaner environment, the truth is that their policies have resulted in less jobs and a weaker economy.