Smaller business means fewer jobs?
New businesses are starting leaner and with fewer employees than was the case in the past, an independent study showed yesterday, suggesting that the pace of job creation will remain frustratingly slow.
The study found that this trend was already entrenched well before the 2007-09 recession, which destroyed more than 8 million jobs.
Startups are key to long-term employment growth. The study drew on data on new establishments from the Bureau of Labor Statistics and the Census Bureau to paint a bleak picture of an economy struggling to generate enough jobs to absorb the 14.1 million unemployed Americans.
Job growth has stalled in recent months, with employers adding a scant 18,000 workers to their payrolls in June and the unemployment rate ticking up to 9.2 percent from 9.1 percent in May. Nonfarm employment increased a meager 25,000 in May.
Prior to the recession, roughly 45-50 percent of startups survived. But the survival rate has dropped below 45 percent.