By Michael Snyder, on May 6th, 2014
What would you say about an economy where businesses are shutting down faster than they are opening? Well, a shocking new study released by the Brookings Institution indicates that this is exactly what is happening in the United States. We are absolutely killing small businesses and the entrepreneurial spirit in this country, and as you will see below, the number of self-employed Americans has been on a downward trend for a decade even though our population has been steadily growing. Traditionally, small businesses have been the primary engine of job growth in this nation, so the fact that study after study has found that small business creation is being crippled in the United States is a really bad sign for our economic future.
Personally, I write about our long-term economic decline nearly every day, but even I had no idea that businesses were being destroyed faster than they were being created. According to the Brookings Institution, this first started happening in 2009…
The American economy is less entrepreneurial now than at any point in the last three decades. That’s the conclusion of a new study out from the Brookings Institution, which looks at the rates of new business creation and destruction since 1978.
Not only that, but during the most recent three years of the study — 2009, 2010 and 2011 — businesses were collapsing faster than they were being formed, a first.
And this mirrors an earlier study conducted by economist Tim Kane. According to his analysis of U.S. Department of Labor data, the following is how the decline in the number of new business jobs per one thousand Americans breaks down by presidential administration…
Bush Sr.: 11.3
Bush Jr.: 10.8
As you can see, this is a problem that has been building for decades and that has accelerated under the Obama administration.
We are strangling small business creation to death, and as a result the number of Americans that are self-employed just keeps going down. Just check out this chart…
And keep in mind that throughout this entire time the U.S. population has been growing. So the numbers in the chart above should be going up steadily as the population grows. But instead they have just kept going down.
Meanwhile, the “economic recovery” is continuing in the corporate world as well.
On Tuesday, we learned that Office Depot is going to be closing 400 stores.
Why would that happen if the economy was actually getting better?