America’s largest companies are, more often than not, contributing to a disastrous trend: a decline in job creation.
When compared to 2006, in 2009, there was a 25 percent decrease in overall job creation and a 34 percent decrease in job creation among startups. These are the lowest levels in nearly 30 years (US Census Bureau).
One might wonder, then, why President Obama recently designated General Electric’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness. Since 2002, GE has eliminated a fifth of its work force in the United States while increasing overseas employment.
There is a silver lining. New firms – those in operation for less than 5 years – and expanding firms still created more than 14 million new jobs.
“It’s heartening to know that, despite the economic obstacles, entrepreneurs were still finding ways to create jobs, though fewer than in past recessions,” said Robert E. Litan, vice president of research and policy at the Kauffman Foundation, which helped fund the research. “We hope these data prompt policymakers to clear away any rules and regulations that stand in the way of entrepreneurs and innovators who want to grow companies and jobs.”
In evaluating the job creation rates of startups and existing firms in recessions over the past three decades, a recent brief by the Census Bureau Business Dynamics Statistics (BDS) found that startups were more impacted by the 2009 recession than any other recession since the early 1980s. Full details of the study are available here.
We can’t simply wait to ride out the recession and return to business as usual. It’s time to try something new – a different approach to job creation and wealth building that is sustainable for the long-term.
A 2009 study by the Pew Charitable Trust attributes more than 770,000 jobs generated by 70,000 businesses within the green economy. And that’s just the beginning – by 2038, an estimated 4.2 million jobs can be created in the green economy, representing 10 percent of new job growth in the US (US Conference of Mayors, 2006).
Who is behind these numbers and statistics? There are small pockets of exciting economic activity happening across the country, from the Evergreen Cooperative in Ohio to WAGES in California. These are just a few of the models for the future of our economy.