Study: Startup Job Rates at Record Lows Under Obama

Study: Startup Job Rates at Record Lows Under Obama

Startup businesses represent the heart of the American economy, but a new report by the Hudson Institute shows the rate of startup jobs during the last two years has been at a record low.

According to the report, Under President George H.W. Bush, who essentially won Ronald Reagan’s third term, there were 11.3 startup jobs per 1000 Americans. Under President Bill Clinton, there were 11.2. Under George W. Bush, there were 10.8. But under President Barack Obama, there have been 7.8 startup jobs per 1000 Americans. 

The study “documents a disturbing weakness in startup job creation,” but “does not explain the cause of decline,” even though “there is anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.”

The American Enterprise Institute highlighted four key findings of the report. 

First, the report found that “at the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown.”

Second, Obamacare created a “sweeping alteration of the regulatory environment that directly changes how employers engage their workforces.” The report notes it will take time until employers and scholars understand those changes.

Third, since 2009, the Internal Revenue Service has engaged in more vigorous crackdowns on “U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits.” This directly impacts startup businesses and potentially has a chilling effect on those thinking about beginning new business ventures. 

Fourth, the report cites barriers to entry at the local levels, including “the rise of occupational licensing” that “is destroying startup opportunities for poor and middle class Americans.” 

“The state of entrepreneurship in the United States is, sadly, weaker than ever,” the report concludes. 


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