Job Creation Hits 29-Year Low in 2009
In 2009, at the height of the Great Recession, the U.S. economy saw historically large declines in job creation rates. From 2006 to 2009, the overall job creation rate fell by 25%, and job creation from startup companies fell by an enormous 34%.
“These statistics are sobering,” says Peter Gioia, CBIA vice president and economist. “They make it imperative that policymakers help, not hinder, a climate for business investment that will create jobs now.”
The data were released in a brief on the latest update to the Census Bureau’s Business Dynamics Statistics (BDS), which is partially funded by the Ewing Marion Kauffman Foundation.
The BDS brief shows that job creation rates for both existing and new businesses are lower in 2009 than in any year since at least 1980. These historically low rates reflect more than the large decline in overall economic activity and job creation at the time. The downward trends in both job creation and destruction rates over the past few decades, accompanied by the unusually steep decline in the job creation rate from business startups, also contributed to 2009’s lower job creation rates.
In evaluating job creation rates of startups and existing firms in recessions over the past three decades, the brief found that startups were more impacted by the Great Recession than any other recession since the early 80s. Between 1999 and 2002, startup job creation remained steady, while job destruction increased. In the most recent recession, job destruction also increased but job creation decreased substantially.
Though new and expanding firms created more than 14 million new jobs between 2006 and 2009, that figure is still lower than in past recessions.
For more information, go to www.ces.census.gov.
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