Open thread September 19, 2010 Dan Crawford | September 17, 2010 5:00 pm Comments (31) | Digg Facebook Twitter |
…..Where Does Job Growth Originate? ……..
New firms add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually
(KANSAS CITY, Mo.), July 7, 2010 – When it comes to U.S. job growth, startup companies aren’t everything. They’re the only thing. It’s well understood that existing companies of all sizes constantly create – and destroy – jobs. Conventional wisdom, then, might suppose that annual net job gain is positive at these companies. A study released today by the Ewing Marion Kauffman Foundation, however, shows that this rarely is the case. In fact, net job growth occurs in the U.S. economy only through startup firms.
Read the whole report here: http://www.kauffman.org/newsroom/u-s-job-growth-driven-entirely-by-startups.aspx
What in Obama’s economic environment, plan, rhetoric makes a case for these jobs creating start ups?
Nothing? ……..What did I win?
You just won a huge ATTABOY! Collect at your local 7/11.
What does a 516 area code have to do with Kansas City? That is the phone number on the site.
And is Kaufman a think tank or a contrivance tank, like the ones that make up wars for DoD to use to buy expensive equipment and JCS to make up war plans to fight.
How about strategies for aa/ad?
Who is Kaufman anyway?
If the new jobs are in restaurants, they close within 5 years and the pay is for tips!!
Lots of new jobs in servcie industries, restaurants, landscaping etc.
Just the kind the US needs!
Job growth ?
WTF are you talking about ? You have to go back to the Clinton era to talk job growth. Was there anything else you wanted to say ?
Follow the logic, and feel free to challenge it, Conversation is the spice of life and the mother’s milk of the blogs.
Who are the “small businesses” selling too ? Consumers in America ? Then that means pizza or the health care monopolists. More likely, they are specialists technocrats selling to big bidness and dying on the vine.
From my vantage point, big bidness sees their next consumer market in the less developed countries ( read ChIndia). Therefore, they are Harvesting America and investing in ChIndia.
Oh, well if you’re actually serious about the question, here is Obama’s
Oh – if you’re actually serious about the question, here’s is Obama’s plan “to create a business-incubator program to help more individuals start their own business.“
And why the conservative von Mises Institute thinks it’s “not only a particularly bad idea but also a destructive one, leading to exactly the opposite of the result sought by the program.”
There’s just no pleasing some people.
thanks. i didn’t have the heart. what is sad is that we have been over this exact ground before.
i am beginning to think the strategy of the right is to just keep on repeating lies until people get tired of refuting them.
No to mention that this was in the news – oh, as recently as yesterday.
Note that it would have happened long ago if it weren’t for the Rethugs whose one and only goal is to make Obama fail. Well, that and to suck at the copious tits of multi-national corporations.
But, of course, there will be something wrong with this, as well. I can hardly wait.
Yup! Makes a difference with the link. Doesn’t make a difference re: job origination. It just confirms what I said. Start ups fail at a high rate and in doing that destroy the jobs they originally created.
The study is a good one, but I’m not sure Corev understands it.
And to be honest, I’m not sure I understand it.
They look at firms by vintages.
In the first year of a firms existence the new firms in total create 3 million jobs.
But since it is a snapshot taken at one point in the year this is really just an assumption.
In the second, third, fourth, etc.etc., years they look at another snapshot of job creation and destruction by firms that are one, two, three, four, etc.,etc, years old.
They find that the net job creation of firms one, two, three, etc., etc, years old is negative in each year.
So they conclude that all net job creation in each year stems from jobs created in the first year of the new firms existence. But remember, this is just an assumption.
I have read and reread and reread this study and I still do not understand it.
As I understand it, for example a start-up would be Microsoft.
It came into existence in 1975 with two (2) employees.
Now, some 35 years later it has almost 90,000 employees and its employment growth has flattened out.
But we know that is how innovation in the economy works. A new technology emerges and creates a new
industry and a new good or service that increases our standard of living. The new industry expands from just a few starts-up with a hand full of employees to become major employers. Meanwhile growth in older industries flattens out or contracts. After time the new industry becomes and old industry and follows the same pattern of employment flattening out.
I have trouble understanding what new insight this study adds to out understanding of how the economy works or what type of policies it implies that the government should follow.
When Microsoft came into being the marginal tax rate was 70%, but that did not seem to keep new firms from being created. The BLS employment dynamics publishes an interesting number, the rate of private firms births as an average of the previous and current number of establishments. The data only goes back to 1992, but it shows that the rate of establishment births was significantly higher in the 1990s than it was in the 2000s. Why? Was it a product of the technology bubble? Probably, in the 1990s bubble Wall Street was essentially giving new technology firms free capital. It probably had little or nothing to do with marginal tax rates since the rate of new establishment births slowed after Bush cut marginal tax rates.
So I’m still left with this new study creating more confusion in my mind than understanding.
So, what in the hell is your point, anyway?
Corev, you keep claiming that the republicans aid small business.
OK, for 8 years in the early 2000s the republicans controlled both the white house and congress.
Can you provide some specific examples of things they actually did to help small firms?
That job origination comes from start ups. Start ups occur continuously.
Spencer, I’m not at home today, baby sitting the grandson. Who BTW is the smartest 2+YO in the whole world. Don’t even think of disputing it!
But the real cincher is that a tax increase on top earners could produce more new business formation and activity. Why? You can run a lot of expenses through them, and higher marginal tax rates make writeoffs more attractive:
But much of the research over the last two decades has found that increases in top tax rates can lead to an increase in the formation of small businesses, as wealthy individuals apparently begin start-ups to avail themselves of the more generous tax breaks offered to businesses.
“Higher taxes may lead individuals to seek self-employment because the opportunities for tax evasion and avoidance are greater,” according to a report released this month by the nonpartisan Congressional Research Service, which surveyed more than 20 studies on the effects of taxes on hiring.
As someone who runs a small business, there is no question that the tax advantages are nontrivial. But most people also underestimate the difficulty and overestimate the financial rewards of setting up your own shingle. Naked Capitalism
this is so ignorant it ought to be deleted out of kindness to your near relatives.
just putting up numbers with no understanding of what they mean doesn’t help your case except among the other complete ignoramuses of the world.
and no, i won’t bother to make my case. you can read about that in the scientific literature.
as I have said before, you are a really sweet guy, and i like you. don’t force me to be mean about “science.” it’s not your field.
Every Tuesday we have four pre-school age grandchildren spend the day with us.
In December it will expand to five, but the oldest grandson just started school so it will still be four pre-school age grandchildren–probably three in diapers.
The current youngest one just started crawing so keeping up with him just got a lot harder.
We are taking care of three of them because their parents just closed their ten year old business and went to work for someone else. They tried running their own business for ten years — even expanded it to multiple locations — before deciding it just was not worth it. Know anyone who wants to buy an icecream shop in the Boston surburbs.
As you can see above, the math is simple. CO2 must be assigned powers that exceed chemical and physical limits to be the cause of Global Warming.hen we realize that the GCMs use H2O as a positive feedback (raising temps) and that recent peer reviewed papers indicate H2O to be a negative feedback (lowering temps), then the temp estimates become suspect. This then begins the to explain another recent peer reviewed paper showing the GCM estimates to be 2 to 4 times high.
Climategate showed everyone how poorly the science was being practiced. Continuing the catastrophic predictions using output from the GCMs has become laughable to many. Continuing with blind belief in catastrophic climate predictions is indicative of a failure to think and just a blind belief (religion.)
There is no sustainable plan to deal with the long term job losses that are due to the high levels of credit availability that affected the U.S. economic from 1994-2007. There has no attempt by the Government or private economists to my knowledge to release publicly available data which indicates the anticipated drop in consumer demand and also the number of jobs that were previously supported by excess credit utilization.
This is an issue in my opinion that has been roundly ignored during this election cycle. The President’s standard speech doesn’t begin to explain the plan to offset this economic reality, and the election candidates do not appear to have good answers for this issue.
There is also the continuing matter of the effects of U.S. trade policy, but that’s an issue that many economists running blogs and otherwise chatting away in public just can’t get their heads around. Why, that would be admitting previous errors in some of the thinking and recommendations to policymakers.
Let’s see how the leadership of this nation handles the net loss in consumer and business demand over the next five years. Perhaps later, some of these people will begin to grasp the level of GDP loss that is resulting from U.S. trade policy and lower levels of credit consumption. And no, the answer is not an endless stream of Federal stimulus and other expenditures.
Didn’t you get the memo? Even the Global Warming pinheads…..er, activists have given up. It’s now called “Global Climate Disruption” http://www.foxnews.com/politics/2010/09/16/white-house-global-warming-global-climate-disruption/
This way you don’t have to measure or prove ANYTHING; whatever the weather does, you can blame it on people and justify taxes, regulation, slow electric cars, whatever. It’s perfect for you. Hop on board!
And foxnews is the primary scientific literature in your mind? This way you don’t have to measure or prove ANYTHING; whatever foxnews says, sheeple like you can blame it on those wacky scientist (or Al Gore) and justify their no-nothingism, de-regulation, Hummers, whatever. It’s perfect for you. Hop on board!
i can see i wasted my time teaching high school science.
you win. no harm.
All the science has been invalidated by a nuanced change in vocabulary – by someone who understands the science, and as Reported by Faux Noise.
This is every bit as compelling as Christine O’Donnell’s views on the lust I occasionally feel in my heart.
It’s getting depressing in here.
Irony deficiency anemia.
Spencer asks: “Can you provide some specific examples of things they actually did to help small firms?”
Let’s start off first with the basics. Basic is understanding the meaning in the referenced article re: start ups and originating new jobs. When the Republicans write stimulus bills they concentrate part of them on small businesses up front and immediately. They do not wait almost two years to provide attention to small business stimulus.
Type sub chapter S businesses were created in 1954 under a republican administration and Democratic congress. One of its primary considerations was to reduce double taxation on corporation profits, a consistent and historical republican issue.
Specific stimulus bills include some tax breaks (lower taxes usually on capital gains), but the more effective incentives is reducing time to depreciate and raising limits for immediate expensing of capital investments.
Another significant aid involves lowering the regulation overhead for start ups and improving Executive Agency support for creating new start ups. Enhance creation instead of hindering.
But the biggest difference is in the attitudes. Republican administrations look at small businesses as economic partners. Helping them raises overall revenue with rising job growth.
Democratic administrations look upon them as competitors or enemies. Raising taxes, strengthening regulations, and in general using oversight to look into (sm….all) business practices. All of which creates a negative business environment and increases overhead.
So, it’s as much attitude as it is actual actions.
“Today, independents say they lean more toward the Republican Party than the Democratic Party, 50% to 25%, and that the Republican Party is closer to their views by 52% to 30%.”
“The survey, conducted by Douglas E. Schoen LLC on behalf of Independent Women’s Voice in late August, raises the possibility of a fundamental realignment of independent voters and the dominance of a more conservative electorate.”