by Ryan Streeter on July 15, 2012. Follow Ryan on Twitter.
I was re-reading this paper (PDF) by Haltiwinger, Jarmin, and Miranda and was struck by how this chart sums up their conclusion, which is essentially that new companies create just about all the new jobs in America rather than small or large companies:
A couple important takeaways:
- It’s easy to see why governors, mayors, and the public at large tend to focus on large companies as the source of jobs. Because they’re big, they account for the largest share of employment. But they don’t ultimately create net new jobs. For every ribbon cutting a governor has in front of some new plant, other plants are closing somewhere else or laying off more workers than that new plant can hire.
- Without startups, young and small firms lose jobs on net. Politicians love talking about small business. But small businesses lose jobs just like big businesses. It’s the new firms that carry most of the water on job creation.
- We need more young firms that are growing. For this reason, Obamacare – with its tax on companies over 50 employees – is a big problem. Of course, Obamacare is a big problem on lots of grounds, but this one in particular cuts against everything the President says about how he’s working hard to jumpstart recovery and growth.