A study by John Haltiwanger of the University of Maryland and Ron Jarmin and Javier Miranda of the Census Bureau offers support to those of us who have been preaching that bailouts to floundering corporations and huge public works projects will not create sustainable job growth.
Take a look at this graph from their study that shows net job creation by company size:
See that really tall column in the corner? That is new companies under 50 employees. What these small companies need is lower taxes, less regulation and strong property rights.
Thanks to Ben Cunningham for passing this along.
Flipping through the full report and looking at all the graphs, I think this is a lot more complicated than that particular graph (Fig. 15) suggests.
It seems like that tall column for 0-year firms with 1-4 people could be a reflection of how many individuals strike out on their own. (E.g. freelancers with no intention of creating more than one job for themselves.)
I also wonder just how many firms are really created (on day 1 or even year 1) with, say, 20-49 people. Wouldn't most of those be spin-offs from larger, older companies? Even a venture capital-supported firm starts smaller, right?
You can convince me otherwise over coffee -- I'll bring two copies of the report!
So Andrew, is that "freelancer" any less "employed"? As long as he is in business he has created at least one job, even if he's the one doing the work.