WASHINGTON—Data from the U.S. Department of Commerce indicates a continued and accelerating collapse of startup job creation in recent years. A new economic policy briefing paper from Hudson Institute, The Collapse of Startups in Job Creation, takes a close look at this troubling trend and concludes that entrepreneurship in the United States is in a parlous state.
These figures are especially problematic because both the Bureau of Labor Statistics and Kane-authored studies in 2010 affirmed an emerging consensus that startups create essentially all net new jobs. Kane attributes the recent drop-off in startup jobs to more elaborate occupational licensing regimes, higher taxes, labor regulation, and general economic uncertainty.
“Entrepreneurship is down by a third these last four years,” Kane says. “And the decline continued in 2010 and 2011, even after the economy started growing. Without startup job growth, there simply won’t be overall job growth in the United States.”