How Japan is reaffirming its commitment to the US labor market

From cars to soy sauce, Japanese products made in the US are ubiquitous in American life. Beyond providing everyday commodities and cultural influence, however, Japan plays an even more direct role in the US economy, creating an impressive number of jobs and buoying inward foreign direct investment (FDI).

Since 2002, Japan has almost doubled its investments in the US, investing more there than it does in Europe or Asia. In 2015, Japan’s cumulative $411 billion of FDI in the US was the country’s second largest source of FDI behind the UK. And while its size and policies make the US an attractive market for many countries, Japan stands in a class of its own for its commitment to the US workforce, R&D, and exports.

 Second only to the UK, Japanese companies employ more US workers than any other foreign investor. 

The economic relationship between the US and Japan is rooted in symbiosis (the US is also the largest investor in Japan) and there is a complementary connection between Japan’s monozukuri culture—or the art of manufacturing—and America’s storied spirit of innovation. These combined cultural cornerstones provide a particularly solid foundation when it comes to business ventures.

Today, Japanese companies employ a significant number of US workers: Almost 840,000 Americans are employed by Japanese companies. Roughly 46% of them work in manufacturing and earn an average salary of $79,819. Second only to the UK, Japanese companies employ more US workers than any other foreign investor.

Not surprisingly, Japanese automakers are responsible for the bulk of opportunities. Automakers and related businesses directly and indirectly fueled a whopping 1.5 million American jobs in 2015. This is partly a result of the fact that 75% of Japanese-branded cars sold in the US are manufactured entirely in North America and Japanese automakers purchase upwards of $67.9 billion in American-made auto parts per year. These efforts produce $106 billion in worker compensation ($16 billion of which is circulated back to the federal government in the form of income taxes).

In a February meeting between Prime Minister Shinzo Abe and President Trump, Abe reaffirmed the country’s commitment to strengthening the Japan-US economic relationship, including working with the US to set high trade and investment standards, and enhancing opportunities for job growth.

Notable Japanese brands like Toyota and SoftBank additionally announced investment strategies for the US: Toyota pledged $10 billion worth of capital investments over the next five years and SoftBank intends to put $50 billion into US investment strategies, creating an estimated 50,000 American jobs. Japanese investments in the US are integral to the American economy—and the country shows no signs of backing down as a key player.

This article was produced on behalf of Government of Japan by Quartz Creative and not by the Quartz editorial staff.

home our picks popular latest obsessions search