Tuesday, February 21, 2012

The Job Leak in America

The message I put forth over and over is simple: Innovation and entrepreneurship are the keys to a growing economy or individual business.  This is especially true during a recession and tepid recovery period which he have been in the past four and a half years. 

The study "Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation" by the Kauffman Foundation suggests that the country faces a fundamental employment challenge that pre-dates the recession by many years.  This is a long-term trend that the researchers call a slow jobs "leak."

New businesses continue to generate most of the economy's net job gains.  A "job leak" occurs when new firms start up with fewer workers than historic norms, and add fewer workers as they grow.

I am surprised The Republican presidential candidates  have not been on top of this!  This is another indictment of the failed policies of the past two administrations--Bush and Obama--both have presided over "job leak."

Analysis of government data shows that since the middle of the last decade and perhaps longer, the growth path and survival rate of new businesses means they are generating fewer and fewer new jobs. The cohort of new firms that started in 2009, for example, is on course to contribute one million fewer jobs in the next decade than historical averages would suggest. 
  • Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation (Kauffman)

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