More start-ups doesn’t mean more jobs

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New businesses are getting off the ground with nearly half as many workers as they did a decade ago, as the spread of online tools and other resources enables start-ups to do more with less, The Wall Street Journal reported.

The change, which began before the recession, may be permanent, according to some analysts.

“There’s something long-term at work here,” said Dane Stangler, research director at the Ewing Marion Kauffman Foundation.

Start-ups are now being launched with an average of 4.9 employees, down from 7.5 in the 1990s, according to a recent study by the foundation. In 2009, new independent businesses created a total of 2.3 million jobs, more than 700,000 fewer jobs than the annual average through 2008, the study found.

The overall number of start-ups, though, has “held steady or even edged up since the recession,” the study said.

Small employers, led by start-ups, have generated 65 percent of new jobs over the past 17 years, according to the Small Business Administration. Steady declines in start-up size, which stretch back more than a decade, could explain the slow labor market recovery following the previous recession in 2001, as well as the current recovery.

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