

Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation - marchustvedt
http://www.kauffman.org/research-and-policy/starting-smaller-staying-smaller-americas-slow-leak-in-job-creation.aspx

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bootload
_"... The study also found that as a group, recent cohorts of new businesses
have been adding jobs at a slower pace than earlier cohorts even when they do
well and grow, but that growth hasn't made up for lower employment levels at
inception. ..."_

Possible reason(s): improved productivity, better technology, higher
employment costs?

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tomjen3
All of the above.

If you think about it, a programmer with a computer can replace hundreds of
workers typing on typewriters, thousands working on mail delivery and
essentially infinitely many people who would previously be required to produce
books (if we allow for ebooks).

That kind of productivity isn't limited to programmers at all, even a temp
worker with basic excel skills can outdo essentially all math geniuses from
before the twentieth century (as far as computations go) put together.

I won't even mentioned how much more efficient email is compared to the two or
three days it takes to send a regular letter (and more to the point, getting a
response back).

Now a huge part of this improved productivity isn't realized because it isn't
necessary and another huge part is lost because most of these things have
diminishing returns (it takes a ton of computations to do the nice charts that
are part of many simulation programs but it might not change more than a
single percent of how you do business) and another huge chunk is given to the
buyers (because if you don't your competition will).

But interestingly enough even jobs that have not seen very large improvements
in productivity (say childcare, doctors, classical music players) also see an
increased salary. It takes about as many doctors to do a surgery today as it
did 50 years ago, it takes about as many people to look after the same amount
of kids and it takes exactly as many people to play Beethoven's fifth today as
it did when he wrote it.

The reason they have seen their salaries go up (aside from government meddling
with things like AMA) is that as the general productivity increase the
salaries that a company can afford to pay workers increase too and if the
salaries paid to the other workers don't increase then there will be nobody to
play the classical music.

Incidentally that is also the cause behind the higher salaries to teachers,
some of the increased cost of health-care as well as the generally increasing
cost of living.

~~~
bootload
_"... the study found that the number of new employer businesses has fallen 27
percent since 2006. ..."_

that's the bit I couldn't explain with technology. why the sudden drop over
such a short time. has technology really improved productivity in just 5
years?

~~~
tomjen3
Not really but a crises or recession is typically when the no longer needed
employees are laid of. As long as the times are good, people are willing to
hire more than they nedd and unwilling to fire those they don't need.

When the times turn bad, they can no longer afford the luxurery and the
companies fire all those they can - which are more than those who have
recently been made obsolete, essentially it is everybody who has been made
obsolete or redundant since the last crises.

The last crises was in the early 00, which means that everybody who has been
made redundant between then and now are being fired in the current crises.

If you recall how the internet was back then and compare it with how it is
today, and you can start to see just how large a productivity increase we
should be able to see.

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nhebb
Direct link to PDF:
[http://www.kauffman.org/uploadedFiles/job_leaks_starting_sma...](http://www.kauffman.org/uploadedFiles/job_leaks_starting_smaller_study.pdf)

