Tuesday, January 8, 2013
Slow start-up and job creation
So we will be talking about some stats in class on Thursday and we also talked about them a bit today, I have found an interesting article on small business and their role in job creation and what has happened over the past few months. "Tuesday’s small business report from the National Federation of Independent Business indicated a near-zero employment change last month among its members." Mark Zandi, chief economists at Moody's Analytics, came up with a similar stat. How reliable can these stats be? Does it some up what you've seen happen to small businesses over the last three years? Can we truly say unemployment rate is going down? Read the article and decide.
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To go off of one of your questions, I definitely think this article addresses some of the things I've noticed with small businesses as a whole. Other problems put aside, if we don't even have a good economic or political environment for business creation and entrepreneurs, it is hard for markets to remain competitive and innovative (as mentioned at the end of the article) and that will only lead to greater problems in the future. But it definitely seems, from my simple perspective, that entrepreneurism is riskier than ever and slightly discouraged. At least from an emerging adult prospective, many people would rather take the safe route into getting a job in this economy than the risky route in creating your own. But again, this will only lead to future problems and missed innovation.
ReplyDeleteMy father is a general manager and part owner of a small business so this posting/article caught my attention quickly. I agree with this article as well as everything Abby noted on in response to your question. To answer your question about what I have seen happen to small businesses over the last three years, my answer coincides with this statement in the article: "The popular wisdom is the small businesses are the main generator of jobs in the U.S. But that is looking less true..." My opinion is similar to what he describes as the "popular wisdom." I think small businesses are necessary and are a vital part of the economy and truly do generate jobs in the U.S. I also agree when he states government regulation as one of the possible reasons for a long-run decline in startups of young firms. In terms of a direct answer: Yes, this does sum up what I have seen happen to small businesses over the last three years.
ReplyDeleteAlong with Cameron, my father and my uncle are both the owners of a small business that explores natural gas and oil. After speaking with them about this issue, I would have to agree with this article that small business start-ups have been declining drastically over the years. My dad said if he would have been looking to start a new business today that he might be a little skeptical because the amount of successful small businesses has decreased greatly. Although at first glance, I would have trusted the statistics based on my knowledge, I don't believe it's acceptable to trust the exact numbers just based on this article alone.
ReplyDeletePiggy-backing off of Hannah said, I believe that the amount of successful small businesses is decreasing because of the lack of confidence in the economy. Because we are still at a time of turmoil many people who might want to start a business do not want to take on the financial risk of a failing business when they can find a job elsewhere.
ReplyDeleteAlso in response to the unchanged unemployment rate, I don't think we can accredit this problem to small businesses alone. Large corporations are downsizing very rapidly to try to cut cost in fear of another recession. Hopefully these problems will get straightened out soon.