Let’s Fix It: America Is Running Out of Entrepreneurs
Article by: JIM CLIFTON
Americaâ€™s biggest problem is that we donâ€™t have enough good jobs. Yes, unemployment has gone â€śdownâ€ť to 5.9 percent, according to the U.S. Department of Labor. But that percentage is almost meaningless, as it doesnâ€™t count people whoâ€™ve quit looking for work. A staggering 20 million people or more are still jobless or grossly underemployed, and many are deeply frustrated or depressed â€” theyâ€™re not celebrating â€śdecliningâ€ť unemployment.
More troubling, Gallup Analytics finds U.S. underemployment above 15 percent and only about 45 percent of adults employed in full-time jobs with at least 30 hours per week of work and a paycheck from a real organization. According to the Labor Department, the number of full-time jobs as a percent of the adult population remains at one of the lowest levels since they began measuring this.
The one thing Iâ€™d fix right away is this super serious jobs problem, because if we donâ€™t, we might lose our republic and our way of life. And I wouldnâ€™t fix it with more government â€śshovel-readyâ€ť jobs or free money from the Federal Reserve. Iâ€™d fix it with millions of new startup companies and by reviving the spirit of entrepreneurship.
Weâ€™ve got our work cut out for us. In 2008, the total number of new business startups and business closures per year â€“ the birth and death rates of American companies â€” crossed for the first time since the measurement began, according to the U.S. Census Bureau. (Here, I am referring to employer businesses, those with one or more employees.) Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually â€” we are at minus 70,000 business survival per year. This is hugely significant, because small businesses are the main source of new good jobs and new economic energy. Up to 50 percent of all jobs are in small businesses and approximately 65 percent of all new good jobs are created by them, according to the Small Business Administration.
Also significant: A shortage of good jobs leads to social unrest. This is true especially when young males are affected, because joblessness destroys their self-concept, makes them feel depressed, humiliated, and hopeless.
Why was there such unrest in Ferguson, Missouri, this past summer? You could say it was a problem between cops and minorities, but Iâ€™d argue this was a jobs problem. As The Washington Post reported, â€śThe unemployment and poverty rates for blacks in St. Louis County are consistently higher than those rates for white residents.â€ť
If all those young men in Ferguson had a good job to go to each morning â€” one where they could feel pride in themselves, feel productive, and be doing something that matters â€” do you think they would be in the streets, protesting, rioting, and looting? Probably not.
The fix: American business leaders in cities across the country, as well as local elected officials, must begin right away to find and nurture tomorrowâ€™s most successful entrepreneurs in their communities. America needs at least a million more startups fast. This means being as serious and intentional about the early identification and development of entrepreneurs as you are about finding star athletes and kids with high IQs.
And the talent is out there, waiting to be found. There are nearly 30 million students in U.S. middle and high schools right now. Early Gallup research reports that about five in 1,000 working-age adults in the U.S. possess the rare talents of entrepreneurship, so that means there are about 150,000 future blue-chip entrepreneurs in fifth through 12th grades now, more in college, and tens of thousands more high-potential adult business builders out there. City leaders should find them all and make their entrepreneurial growth as systematic and intentional as intellectual and athletic growth are. Great business builders are like great scientists or great quarterbacks â€” they will respond and accelerate with special attention. Furthermore, without it, their potential is at risk of being underdeveloped, or worse, never developed at all.
Americans have accomplished much harder tasks. We mobilized the whole country to win World War II. We put a man on the moon. Good Lord, we ignited the dot-com boom that revolutionized business and led to one of the greatest bull markets in history. We can turn the American economy around. But we had better get on this one fast, because we need millions of good jobs right now.