A very, important study of U.S. Economic Census Data
conducted by the Ewing Marion Kauffman Foundation
, was published last week that statistically demonstrates who really creates jobs in the American economy.
Now let me be clear - the jobs issue is NOT a political football, as much as those in Washington would like to make it one. It is THE critical issue for us to solve here in America, and in fact all over the world, if our thriving, modern, global economy is to continue.
The 2008-2009 recession has cost the U.S. over 8 million jobs.
The entire fabric of the American "way of life" - from tax receipts to pay for government social programs, schools, and national defense, to the sense that the lives of our children will be better than ours is dependent on a society that creates LOTS of good jobs for those that want to work and are willing to work hard.
Let me be more stark. Let's look at two places in the world that are simply not creating jobs of any type
for their people - sub-Saharan Africa and the Muslim world.
Even a cursory look at the deep and tragic social problems in these regions lead to two conclusions - 1) the incredibly wasted potential of literally hundreds of millions of people because there is literally "nothing to do" and 2) the source of the attractiveness of extremist, violent ideologies to young people (especially young men) where there is NO HOPE for them "earn their bread" and care for their families.
Now, thank God the problems in the U.S. economy are nowhere even near the magnitude of those in these fortune-starved places, but the connection between how we live
and our society’s ability to create is one that too often gets lost in our entertainment and distraction - driven culture.
And more to the point, we here in America have VERY high standards for our lives. We don't just want any job. We want GOOD JOBS. I define a good job as follows:
1. A job that allows for a reasonably “worry-free” meeting of the base, human needs - food, water, shelter, and clothing.
2. A job that provides security from threats to health (yes, health insurance) and violence (making enough money to live in a safe neighborhood).
3. A job that is part and parcel of one’s overall life mission, whereby the successful performance of it creates the "self-actualization" stuff that appeals to the best in all of us - self-respect, a sense of belonging and community, and inherent satisfaction of the work itself, and the satisfaction of contribution to a cause larger than our own needs. So Where Do These Good Jobs Come From?
Well believe it or not, folks, they don't come from government stimulus spending. Not from the "new" General Motors. Or from Goldman Sachs. Or from Fannie Mae or Freddie Mac or Citicorp.
No, nearly all net job creation in the U.S. economy comes from firms less than 5 years old, or brand new (startups) and young (one to five years old) companies. In the last pre-recession year of 2007, the U.S economy created 12 million new jobs. Of these, startups and young companies created 8 million of them, or almost the exact number of jobs that have been lost in the current recession. A few further points to illustrate:
• Since 1977, without startup companies, net job creation for the American economy would be negative (i.e. we would have LOST more jobs than we created) in all but a handful of years.