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The myth of small businesses being the engine of job creation
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The myth of small businesses being the engine of job creation

05/31/11


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The myth of small businesses being the engine of job creation

Permalink 10:38:32 pm, by editor of MarketObservation.com Email , 224 words   English (US)

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Categories: Statistics, Various Market Info, Entrepreneurship/Leadership/Innovation

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Mother Jones: Chart of the Day: The Death of Small Businesses, May 30, 2011

Like me, you've probably been hearing for years that small businesses are the engine of job creation in the United States. But that's an outdated view. The number of new startup businesses has declined sharply since the beginning of the recession, while the number of jobs created by startup businesses has been declining for over a decade. As this chart from the BLS shows, the number of jobs created by new businesses peaked in 2000, began declining at the start of the Bush administration, and has been plummeting ever since:

The number of new establishments for the year ending in March 2010 was lower than any other year since the series began....The number of jobs created by establishments less than 1 year old has decreased from 4.1 million in 1994, when this series began, to 2.5 million in 2010. This trend combined with that of fewer new establishments overall indicates that the number of new jobs in each new establishment is declining.

....The number of jobs created from establishment births peaked in the late 1990s and has experienced an overall decline since then. The decrease in birth-related employment during the latest recession is the largest in the history of the series, followed closely by the period of “jobless recovery” after the 2001 recession.
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Keywords: Small Businesses, Job Creation

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