Salient to Investors:
- Millennials may find it more difficult to climb the corporate ladder as new businesses, which employ more young workers, become a smaller force in the labor market.
- Gary Burtless at Brookings said rapid progress for new and young workers is much rarer in long-established firms. Burtless said young people benefit when there are lots of new firms, though the link between upward job mobility and new businesses is based solely on anecdotal evidence and logic.
- 218,000 new companies were created per quarter in 2013, back to the decade-high levels of 2006. However, only 795,000 new employees were added at new companies in Q4, 2013 versus almost a million each quarter from 2003 to 2006. The number of jobs per new business was 3.6 in 2013, versus 4.3 in 2007 and almost 5 in 2003.
- Robert Litan and Ian Hathaway at Brookings say the share of private-sector workers at companies more than 16 years old was 72% of all workers in 2011 versus 60% in 1992, and made up 34 percent of all businesses in 2013 versus 23% in 1992. Hathaway said entrepreneurship is hard:, all we hear about are the successes and not the failures
- The American Economic Association said 50% of the original jobs generated by new businesses are lost within 5 years due to closures.
- Erik Hurst at University of Chicago said many startups aren’t high-growth: only a third are started to market a specific service or good to market, and most are formed to give the founder more job flexibility or top be in charge.
- Employee tenure was 4.6 years in January 2012 versus 3.7 years in 2002 – 3.2 years versus 2.7 years for 25 to 34 year olds.
- John Haltiwanger at the University of Maryland said the US now is now in an era of lower productivity growth, lower economic growth, lower job creation.
Read the full article at http://www.bloomberg.com/news/2014-09-03/millennials-promotions-upended-as-new-u-s-firms-hiring-eases.html
Click here to receive free and immediate email alerts of the latest forecasts.