Rutgers University Economist: Japanese Auto Industry in U.S. Has Large Impact on U.S. Economy

More than a Million Jobs Created Between Automotive Production and Dealer Networks

WASHINGTON--()--The Japanese auto industry in the United States has emerged as a major contributor to the U.S. economy. In a new study by Rutgers University professor Thomas Prusa, the Japanese auto industry is responsible for 1.2 million U.S. jobs based on the U.S. production and sales for Japanese-branded automakers. Prusa also estimates these jobs generate over $76 billion in annual compensation.

“While many parts of the U.S. automobile industry have struggled in recent years, the Japanese-branded auto segment has emerged as an important job creator and a leading contributor to the United States economy,” Professor Prusa said. “The role of Japanese-branded automakers’ investment has grown significantly over the past two decades. In the mid-1980s less than 15% of the Japanese-branded automakers’ U.S. automobile sales were produced in North America. Today approximately two-thirds of the Japanese-branded automobiles sold in the United States are built in North America.”

Key findings of the study include:

  • The investment by the Japanese-branded automobile companies has increased the productivity of both the U.S. automobile vehicle and automobile parts industries, a phenomenon often referred to as beneficial “spillover.”
    Therefore, rather than posing risks to U.S. jobs, the Japanese-branded automobile companies have increased the international competitiveness of all U.S. auto and auto parts workers.
  • The jobs multiplier associated with the Japanese branded automakers’ U.S. vehicle production exceeds nine – that is, nine additional jobs are associated with each worker directly employed in vehicle production at the Japanese-branded automakers’ U.S. plants.
  • In total, the Japanese-branded automobile companies’ production facilities and dealer networks contribute to an estimated 1.2 million private sector U.S. jobs.

“The Japanese-branded automobile companies by themselves are among the largest job creators in the United States,” Prusa said. “The total annual compensation via the jobs created by Japanese-branded automobile companies in the United States is over $76 billion. Quite simply, the Japanese investment has significantly strengthened the U.S. auto industry.”

The study was prepared for the Japan Automobile Manufacturers Association, a non-profit industry association working to support the development of Japan’s automobile industry both in Japan and around the world and to contribute to social and economic welfare.

To view the full study, go to: http://econweb.rutgers.edu/prusa/cv/Contributions%20J-Brand%20Auto%20Ind%20to%20US.pdf

Contacts

Press Contact:
Rutgers University
Dr. Thomas Prusa, 908-443-1565
prusa@econ.rutgers.edu
or
JAMA News Bureau
Matt Well, 202-803-6828

Release Summary

A new study by Rutgers University Professor Thomas Prusa reveals the major contribution the Japanese-branded economy is making on the United States economy. More than a million jobs have been created.

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Contacts

Press Contact:
Rutgers University
Dr. Thomas Prusa, 908-443-1565
prusa@econ.rutgers.edu
or
JAMA News Bureau
Matt Well, 202-803-6828