A new study released today by the Texas-based Institute for Policy Innovation (IPI) estimates that global piracy of recorded music has cost the United States $12.5 billion in economic output and 71,060 jobs annually.

The IPI describes the report, entitled "The True Cost of Sound Recording Piracy to the U.S. Economy," as the first of its kind to "credibly estimate the impact of sound recording piracy not just on the recording industry, but also on the U.S. economy as a whole."

According to the report, prepared by Stephen Siwek with Economists Inc., every year the U.S. workers lose 71,060 jobs and $2.7 billion in earnings. Of the 71,060 jobs, the report states, 26,860 jobs would have been created in the sound recording and downstream retail industry and 44,200 jobs would have been added in other industries if not for the piracy. Of the $2.7 billion lost in earnings, $1.1 billion is attributable to the sound recording industry or downstream retail industries and $1.6 billion in earnings by workers in other U.S. industries.

In addition, the report estimates that the U.S. government loses at least $422 million in tax revenues due to sound recording piracy, including $291 million in personal income tax and $131 million in lost corporate income and production taxes.

"Policy makers must realize the threat of global piracy and recognize that intellectual property products, such as sound recordings, are the most important growth drivers in the U.S. economy, responsible for nearly 40% of economic growth and nearly 60% of growth in U.S. exports," according to a statement by the IPI.

The purpose of the study, funded by the IPI's general support funds, is to alert policy makers to the magnitude of the impact sound recording piracy has on the U.S. economy. It is the second in a series of intellectual property papers by the IPI examining the overall economic impact of copyright piracy and patent infringement.