[quote=SandraL]I have to disagree with SD Realtor on corporations. Small business is what drives jobs in the USA. Corporations are not coming back here to create jobs, even with a favorable tax policy. Labor costs are too high.
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A spot-on article in today’s NYT contradicts this position. According to the authors, the age, not the size of the company is key to job creation:
“Size plays virtually no role,” says John Haltiwanger, an economist and co-author of the study. “It’s all age — start-ups are where the real job-creation action is.”
Furthermore, large companies are disproportionately responsible for the demand that drives startups, according to the authors:
“You can read that and assume that big, older companies don’t play an important role in the job-creation game. That would be a mistake, economists say. The old-line companies may not create a lot of net new jobs in America, they say, but the big global corporations shape the environment that gives rise to entrepreneurial upstarts.
Josh Lerner, an economist at the Harvard Business School, points to the trends among big companies to farm out tasks not seen as vital to the corporate strategy — so-called right-sizing — and to reach outside the company walls for inventions, called open innovation.”
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To me, this means that job creation depends on policies that favor start ups. And you would think that with the current unemployment rates, companies could still hire new workers offering salaries that took into account employers’ rising health care costs.
With absolutely no data to support it, I believe that the economy suffers from a disproportionate emphasis on investment in companies/industries compared to the creation of companies/industries in which to invest. A former coworker of mine analogized this sort of situation to “a bunch of male dogs sniffing each other.” Earthy, but it illustrates a point.
