Tuesday, April 05, 2011

The Declining Number of US Business Establishments

A troubling trend in the US economy has been the apparent decline in the number of business establishments. According to the Bureau of Labor Statistics, the number of businesses in the US declined from 8,814,254 in 2008 to 8,746,332 in 2010 (as of third quarter). Prior to 2008, the growth in the number of business establishments in the US had been growing at a healthy rate of 1.4% to 2.4% annually. Also note that fewer than 0.01% (a tenth of one percent) of the total number of establishments in the US employ more than 1,000 people. Thus, the decline in total business units in the US is a proxy measure for the decline in small to medium-sized business establishments overall.

Perhaps the US should be concentrating its efforts on ways to create new business establishments that hire, rather than focusing on how to create individual jobs per se...

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1 comment:

c.w. Rettie said...

With close to ninety percent of those business establishments employing less than twenty persons and sixty percent employing less than three persons our work is cut out for us.

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