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New Businesses (Few) and New Jobs (Few): The New America

Written by Gary North on May 3, 2012

The #1 source of new jobs in any economy is the creation of start-up businesses.

In the 1980s, the percentage of new business start-ups to businesses in general was 13%. In 2010, it had fallen to below 8%. This was the lowest on record.

In 2010, about 400,000 new businesses began. As a result, there were over 2.2 million new jobs created. That is almost six jobs per start-up.

The rate of new business startups fell in 2010 to the lowest point on record, according to an analysis of U.S. Census Bureau data.

The decline of ew business start-ups is a long-term trend. It points to reduced entrepreneurship in the USA. Yet entrepreneurship is one of the nation’s greatest advantages in the world economy. Anyway, it was. We are losing this advantage.

In the early 1980s, firms that had been started five years or fewer earlier accounted for half of all businesses. Today, this is below 35%. In the 1980s, these young firms accounted for 40% of new jobs created. Today, it is down to 30%. Again, these are long-term trends.

This decline occurred in all states. It is not a regional phenomenon. But regions that used to be the growth leaders — in the West, South, and Southwest — were hit harder in the recession. This seems reasonable. The other regions had not been major centers for job creation. The recession scared off entrepreneurs. There used to be more of them in the high-growth regions.

These long-term trends indicate that we should not expect a sharp rebound in the jobs market. The #1 source of new jobs is fading as a factor in the American economy.

Continue Reading on www.washingtonpost.com

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7 thoughts on “New Businesses (Few) and New Jobs (Few): The New America

  1. What does this garbage post mean by jobs? Jobs such as minimum wage at some convenience store? Or a job that a man can support/provide for his family?

    I am so very tired of the word jobs without a crystal clear definition of what the word jobs means.

    If you mean jobs that are for entry level workers then you are playing games and WE are not buying this "statistic" that really means nothing unless you are a politician trying to convince your dumb constituents to vote for you again.

  2. Steve you sound like a person who has been unemployed for two plus years. either that or you went form a mid to low pay job to very low pay. If you want a real paying JOB (jackass of the boss) then become the boss. or at the very least become "employed" in some manner that removes the ceiling on your income. a consultant, hired trouble shooter, a contract worker.
    then you will get a better attitude.

  3. Steve, the job definition is not the issue, the issue is Obama's "Mission accomplished". Wake up! You thought process is what wrong with America, besides Obama!

  4. PrincessPhilly says:

    The job definition is important. You have your head in the sand. What good is it to create jobs if they are all at minimum wage. With job creation like that the whole country will be a third world country and everyone will be dirt poor.

    It is people like you that can't think is what is wrong with America. You believe whatever Obama tells you. Oh we created 500,000 jobs and you think it is great and Obama is great but fail to investigate that they all pay minumum wage.

  5. Minimum wage laws are a contributing factor to a slow economy just like price controls. In a truely free market most people don't stay in low paying jobs and startups compete for good workers so they usually offer above minimum wage. The point of the article is that when there is freedom, there is prosperity, the economy has fewer ups and downs and grows much faster. Obama style government intervention and deficit spending is why the economy is in the pits. Government is the problem including minimum wage laws.

  6. Ruth Delvige says:

    Where can I buy the CLEP college level textbook for under $20.

    WherIf a teen can’t get a job, what should a parent do? It’s obvious to me. The teen should get a used college level textbook for under $20, and study to pass a CLEP exam. If he passes, he gets full credit at many colleges. That will save his parents a bundle.e can I get the book

  7. Gary''s other website http://www.garynorth.com has this information if I remember correctly. It's an excellent site for information on numerous subjects and well-organized. Check it out. There is a whole section devoted to education. Search CLEP. He has a lot of good tips on how to advance your education or that of your kids without putting yourself in debt. If I were looking for that information, it would be the first place I'd look. He's very well-versed on the subject of education. While it is a fee membership site, a lot of useful information is free and would be worth your time to look at. He's also got a lot of good information for starting your own internet site if interested. In the membership forum you'll meet a lot of intelligent, civil people asking questions or providing answers on myriad subjects and the exchanges can be quite informative as well. Hope that's of some help.