The U.S. economy saw an all-time low of job creation rates from startup and existing firms in nearly 30 years, according to the Census Bureau's Business Dynamics Statistics (BDS). During this 30-year span there also was an increase in job losses.
From 2006 to 2009, the overall job creation rate fell 4 points (from 16.5 percent), and among startups the job creation rate fell by 1 point (from 3 percent).
Compared to 2006 rates, however, this represents a 25 percent decrease in overall job creation and a 34 percent decline among startups. Despite these depressing numbers, new and expanding firms still created more than 14 million new jobs between March 2008 and March 2009, according to the BDS.
Job creation rates for existing businesses and new firms were lower in 2009 than in any year since at least 1980, the BDS brief shows.
In evaluating job-creation rates of startups and existing firms in recessions over the past three decades, the brief found that startups were more impacted by the Great Recession than by any other recession since the early 1980s. Between 1999 and 2002, startup job creation remained steady, while job destruction increased. In the most recent recession, job destruction also increased but job creation decreased substantially.
These BDS reports were partially funded by the Ewing Marion Kauffman Foundation.
"While we know all too well that jobs were lost, this is the first indication of how the recession impacted job creation. It's heartening to know that, despite the economic obstacles, entrepreneurs were still finding ways to create jobs, though fewer than in past recessions," said Robert E. Litan, vice president of research and policy at the Kauffman Foundation.
