Job Creators

I honestly have no idea what John Stunzel is talking about when he says this:

But is small business really the solution to the nation’s economic woes? Probably not. In a recent Harris Poll of more than 1,400 small businesses, two-thirds said they would not increase hiring this year. And even when small businesses hire, they tend to hire small numbers of people.

However hostile Democrats like me may be to the excesses of Wall Street, and however much everybody admires the small, independent businesses in our neighborhoods and communities, big business remains the primary driver of economic growth and job creation.

He presents a few anecdotes but not much in the way of supportive data.

Small businesses, mostly new small businesses, have been responsible for 2/3s of the new jobs created between 1993 and 2009. When you add to that the number of jobs created by new, large businesses it accounts for nearly all job creation.

Old, established businesses on the other hand have been destroying jobs at a furious pace for decades. In the early 1980s GM employed 349,000 wokers. In 2000 GE employed 168,000 people in the U. S.; now they employ 134,000. The largest companies in the United States are oil companies, financial firms, and a few industrial manufacturing firms and most of them are more than fifteen years old and well-established. None of them are showing any signs of beginning to do mass hiring. They’d better get started if they are to offset the large employment decreases they’ve had for decades.

As I’ve said before what we need is considerably more entrepeneurialism if we are to produce more, better jobs. How are we faring on that front? Not too well if this post at Washington Monthly, summarizing an article appearing in the print magazine, is to be believed. Here’s the meat of the article:

In 1977, Americans created more than thirty-five new employer businesses for every 10,000 citizens age sixteen and over. By 2009, however, Americans were annually creating fewer than eighteen such businesses, a 50 percent drop. While the Great Recession clearly cut into new business creation, the decline was clear well before 2007. The averages across decades capture that decline: between 1977 and 1989 Americans created more than twenty-seven new businesses for every 10,000 working-age citizens. This compares to fewer than twenty-five in the 1990s and around twenty-two in the 2000s.

and

The single biggest factor driving down entrepreneurship is precisely the radical concentration of power we have seen not only in the banking industry but throughout the U.S. economy over the last thirty years. This revolutionary remaking of almost every economic activity in the nation was set in motion in 1981, when officials in the Reagan administration all but suspended traditional enforcement of America’s antimonopoly laws, a change in policy then adopted by every subsequent administration. Since then, regulators have done almost nothing to stop the great waves of mergers and acquisitions, with the result that control over most major economic activities is now more consolidated than at any time since the Gilded Age.

For my own part I don’t believe that there’s a notable difference between the two parties, at least at the federal level, in their preference for big businesses over small. I point to the Clinton Administration’s fumbling of the antitrust suit against Microsoft as an example. How many of the obvious monopolies in the country were broken by the Clinton Administration? The Obama Administration? At least the castigated Reagan Administration oversaw the breakup of the Bell monopoly without which there would barely have been fax machines let alone an Internet revolution.

Just as big businesses prefer doing business with other big businesses, big government views the American economy through the prism of big business. From agricultural subsidies to government contracts to intellectual property law big business is the primary beneficiary. That’s as true of the nominally small government Republicans as it is of the purportedly big government Democrats. It’s no accident that the exceedingly Republican-friendly Bechtel is the largest construction firm in the U. S. and has built its power and influence largely on government contracts.