Job gain is down for startups, spelling potential bad news for the economy
- Startups are adding fewer jobs to the U.S. economy, reports the Wall Street Journal. Job gain among new companies is the lowest share of employment in 20 years.
- Labor Department Statistics show that the percentage of private-sector employment for job gain at new firms dropped to 1% in 2016’s first quarter, the lowest on record since 1992 when the Labor Department began keeping stats on job growth for startups, and half of what its peak once was.
- The addition of new jobs to the economy by startups has been steadily declining, labor statistics show. The share wavered between 1.6% and 2% in the 1990s, then inched down throughout the 80s. Even when the economic recovery began in 2009, the share went down, although it held between 1.1% and 1.3%. Commerce Department numbers show a similar decline.
The decline in job gain for startups means fewer entrepreneurs are competing in business, and that’s not a good sign for the economy. Economists say it might also mean that more established firms have stiffened the competition more than ever before, which will create a great deal of trouble for HR.
While economic numbers such as the jobs report have generally been good, employers should be wary of the impact of these numbers on finding the right talent at the right time.
- Wall Street Journal Job Gains at Startups Are Way Down and That’s a Bad Sign