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Morning Brief: Rising Profits Not Powering Employment Growth

<p>Stock board on the floor of the New York Stock Exchanging showing rise in the Dow Jones Industrial Average on November, 30 2011. (Brendan McDermid/Courtesy Reuters)</p>
Stock board on the floor of the New York Stock Exchanging showing rise in the Dow Jones Industrial Average on November, 30 2011. (Brendan McDermid/Courtesy Reuters)

By experts and staff

Published
  • Renewing America Staff

The Wall Street Journal reports that large firms are more profitable and efficient than before the recession, but most of their new jobs and profits are overseas. The analysis of the financial reports of most firms in the S&P 500 found that the largest public companies have grown more efficient and profitable since 2007: average revenue per employee rose from $378,000 to $420,000. While capital spending and overseas hiring has grown, domestic hiring has not as U.S. firms continue to grow international operations in pursuit of higher sales, lower costs and lower tax burdens.

The statutory U.S. corporate tax rate is now the highest in the world at 35 percent, but is only levied on overseas profits when they are repatriated. U.S. policymakers continue to debate proposals to reform the corporate tax code. This CFR Backgrounder by Jonathan Masters details the debate and some proposals for U.S. Corporate Tax Reform.

Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.

Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.

Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.

Steven J. Markovich holds an MBA from the University of Chicago’s Booth School of Business.