July 21, 2010
Who's creating the jobs?
Jobs appear to be coming back, but the unemployment rate is still near 10 percent. Should those looking for jobs expect better luck with existing companies or new firms?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"When we look at past recoveries from recessions, typically during an economic recovery you get a lot of job growth from new firms -- sort of like new births: people out there starting new businesses, people going into new lines of work. ... And so if you are an unemployed worker, going to new firms would stand you a good chance at getting a new job.
"So far, this recession seems to be different. It has been different in so many ways, in that if you look at where the new jobs that have been created over the last six months are being created, it is mainly in existing firms not in new firms. So again if you are an unemployed worker now you have a better chance in getting a job if you go to an existing firm.
"And the reason why we are not getting job growth from new firms, we think, is because new firms are actually often small firms. They are small businesses. And it is still tough, very tough for a new small business to get a loan. And so we think that is holding back growth among new firms."
Posted by deeshore at July 21, 2010 10:48 AM