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Home>UPDATE: Robots and globalization aren't the only threats to good-paying jobs

UPDATE: Robots and globalization aren't the only threats to good-paying jobs

UPDATE: Robots and globalization aren't the only threats to good-paying jobs

10/04/2017

By Michael W. Sonnenfeldt

Entrepreneurs and their funders are part of the problem -- and the solution

At a time when everyone agrees that we need to create more and better jobs, data from by the U.S. Bureau of Labor Statistics (BLS), the primary source for information on the nation's labor market, shows that our country is doing the opposite.

We've heard that robots and globalization are to blame, but there's one other culprit that nobody is talking about: entrepreneurs.

The data tells the story. The chart below tracks the number of new business creations -- with "new" being defined as any company that is less than 12-months-old during the year being tracked -- for the period March 1994 to March 2015.

While it is true, as the BLS states, that the number of new business being created tends to rise and fall with business cycles and the health of the economy, the number of companies created each year between 1994 and 2015 increased by 100,000 overall, or 17%.

But look at this second chart, below, showing the number of jobs being created by those new companies.

"The number of jobs created by establishments less than 1 year old decreased from 4.1 million in 1994, to 3 million in 2015," the BLS points out. That's a 26% decline.

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