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Startups Not Even Making Dent in Jobless Rates

Tuesday, 12 Jul 2011 12:36 PM

Need a job? Big companies not hiring? Try a startup. Surely a company opening its doors for business needs some employees.

Well they do, a study shows, but not as much as they did in the past.

New businesses are also starting out smaller and going under quicker, according to a study from the Ewing Marion Kauffman Foundation.

"They're starting out with fewer employees than they used to — a trend that began sometime around the year 2000 — and they're not lasting as long," the Huffington Post reports.

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(Getty Images photo)
"Only 61 percent of firms established in 2007 survived longer than two years, compared with 65 percent of firms that got their start in earlier periods, the report says."

In the 1980s, startups accounted for about 3.5 percent of U.S. jobs created each year, according to the report. During the 2000s, that figure fell to 2.6 percent.

"If the Kauffman study suggests that startups have played a modest role in the recovery to date, a new Chamber of Commerce report indicates that small business will play only a limited role in the coming year," the Huffington Post adds.

A total of  64 percent of small-business executives don't expect to add to their payrolls in the next year and another 12 percent plan to cut jobs, according to the U.S. Chamber of Commerce report.

Only 19 percent say they would expand their work forces, according to The Wall Street Journal.

"I think it's safer to stay on hold and not hire workers," says Harold Jackson, chief executive of Buffalo Supply, a Lafayette, Colo., distributor of high-tech medical equipment used in operating rooms, the Journal reports.

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Need a job? Big companies not hiring? Try a startup. Surely a company opening its doors for business needs some employees. Well they do, a study shows, but not as much as they did in the past. New businesses are also starting out smaller and going under quicker, according...
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