LL Cool J once famously snarled, “Don’t call it a comeback, I been here for years.”
The couplet could have served as an epigraph to the U.S. section of the World Economic Forum’s 2015 global competitiveness report, released Wednesday morning. The WEF, most famous for its annual confab of the global elite in Davos, Switzerland, places the United States economy as the globe’s third most competitive, behind only Switzerland and Singapore.
The findings, however, fly directly in the face of public opinion in the U.S., and contradicts the central theme of the man leading the race for the Republican nomination for president: Donald Trump. He argues that America “doesn’t have victories anymore,” and that economic rivals from China, to Japan, to Mexico are beating the U.S. in the global competition for economic clout.
The World Economic Forum disagrees. It defines competitiveness as, “the set of institutions, policies, and factors that determine the level of productivity of an economy, which in turn sets the level of prosperity that the country can earn.” It looks at 114 different indicators that “capture concepts that matter for productivity,” and weights them based on a given country’s economic development.
So, why does the U.S. rank as so economically competitive? Here are a few examples of the areas in which the United States leads the world as a great place to do business, according to the WEF:
- It has very low requirements for severance pay, while other countries have statutory requirements that firms pay off laid off workers;
- It’s the easiest place in the world to get around via airplane;
- It’s the easiest place in the world for businesses to “differentiate their products and services” using marketing; and
- The U.S. economy has experienced very low inflation of late
These are just a few examples of indicators in which the United States beat out every other country. There are several other areas where the U.S. ranks in the top 10 but, needless to say, the U.S. is a great place to do business by these and many other measures.
Meanwhile, Donald Trump’s favorite bogeyman, China, has stalled in its march up the WEF’s list, once again landing at a middling 28th place. As it turns out, doing business in an authoritarian regime has its downsides, like burdensome taxes and regulations, and a weak rule of law.
The difference in opinion concerning the state of the American economy between the World Economic Forum and the average American who supports Donald Trump, however, isn’t difficult to reconcile. Sure, Trump is wrong about America’s decline, strictly speaking. It’s still the richest country in the world and arguably the first place any entrepreneur would choose to launch a company.
But most of us aren’t entrepreneurs. And the same reasons why America’s a great place to be a business owner are sometimes the reasons why it’s tough to be a worker. Take, for instance, the WEF’s appraisal of “labor market efficiency.” It credits the United States for having few worker protections compared to its developed peers. That surely reduces costs for business owners, but it likely adds to a feeling of economic insecurity among the overall population.
In other words, America is one of the best places in the world to run and own a business. But that doesn’t necessarily disprove the Trumpian assertion that America is in decline. The WEF report says nothing about what it’s like to live and work in the United States today.