Thursday, November 10, 2016

The Drop in Entrepreneurial Jobs

Job gains from new firms are at the lowest share of employment in over 20 years, another sign of the declining role entrepreneurship plays in the U.S. economy. Job gains from these establishments as a percentage of overall private-sector employment dropped to 1 percent in the first quarter of 2016, the lowest level recorded since the Labor Department began collecting this data in 1992.

That's just half what it was at its peak. Throughout the 1990s, that figure hovered between 1.6 percent and 2 percent, before edging lower throughout the subsequent decade. Since 2009, when the economic recovery began, it has held between 1.1 percent and 1.3 percent.

The number of “establishment births,” or new businesses, fell by 26,000 to 220,000 in the first quarter of 2016. The number of jobs those establishments created also dropped by 161,000 from the previous quarter to 734,000, the lowest level since 2011.

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