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Startup Jobs Dropping

Posted by: Mark Marich on October 01, 2012 Source: Policy Dialogue on Entrepreneurship

A recently released briefing paper by the Hudson Institute shows job creation from new firms at an all-time low. “The Collapse of Startups in Job Creation” paints a bleak picture where the number of new firms being created today is even smaller than two years ago when the worst of the recession ended.

The findings are consistent with a 2011 report from the Kauffman Foundation, “Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation.”

The new Hudson paper contrasts the rate of job creation from new firms over the last four presidencies. During President George H.W. Bush’s single term in office, there were 11.3 startup jobs per 1,000 people. That rate dropped to 11.2 under President Clinton, 10.8 under President George W. Bush, and now sits at 7.8 for President Obama.

The paper’s author, Tim Kane, suggests that stricter labor policies since 2009 are at the root of the most recent drop—and pushing jobs overseas. Specifically, he points to the passage of the Affordable Care Act coupled with an IRS ‘crackdown’ on companies who reduce the financial burden of mandatory employee benefits by leaning on part-time employees and contractors are driving jobs.

Category:  General  Tags:  Hudson Institute

3 Comments

RE: Startup Jobs Dropping

October 01, 2012 @ 11:44 AM

MDay said...

Imho: If the pervaling message is that entrepreneurs who are successful should be taxed more (read "punished"), and if business owners are thought of as selfish capitalist bast***s, if the risk-taking, potential personal loss involved and the skill that it takes in the corraling of resources are meaningless, then why would anyone go down that road? The growing attitude seems to be that starting a business is only done by those with questionable motives, and anything they make should be taken away. In the past the entrepreneur was championed. Now he or she is looked at questionably. It becomes a no-brainer to NOT do it, the reward is no longer there.

RE: Startup Jobs Dropping

October 01, 2012 @ 11:45 AM

MDay said...

Imho: If the pervaling message is that entrepreneurs who are successful should be taxed more (read "punished"), and if business owners are thought of as selfish capitalist bast***s, if the risk-taking, potential personal loss involved and the skill that it takes in the corraling of resources are meaningless, then why would anyone go down that road? The growing attitude seems to be that starting a business is only done by those with questionable motives, and anything they make should be taken away. In the past the entrepreneur was championed. Now he or she is looked at questionably. It becomes a no-brainer to NOT do it, the reward is no longer there.

RE: Startup Jobs Dropping

October 01, 2012 @ 03:53 PM

Richard Haase said...

Wrong.

Labor policies affect very little. A firm hires for many times paid salary; otherwise, the firm would not be in business. To blame labor policies is to fuel the conservative agenda that would like to turn America into Hong Kong.

The real problem is that THERE IS NO CAPITAL AVAILABLE. We need to bring back Glass Stiegel. Instead of investing in job creating, investors are involved in the same debt oriented pyramid schemes that caused this mess.

Separate Wall Street from the Banks; then, Wall Street and private equity will go back into early stage investments and therein create jobs.

Innovators and entrepreneurs NEED CAPITAL.

Regulation is NOT the issue.