Can you guess where the REAL job growth has been happening?

Posted on | August 18, 2009 | 4 Comments

Last week, an article I wrote for AppGap (as a member of the Small Business Trends Expert Network) about nonemployers and the new role they might be expected to play in a 21st century economy caused a bit of a Twitter-powered stir.

Nothing that would bring down anybody’s servers or anything like that, but the article seemed to be well-received. In it, I essentially make the case that not enough people have figured out that nonemployer businesses can be viewed as businesses but they can also be viewed as newly self-created jobs.

As I asked some rather pointed questions towards the end of the article: What happens if the nonemployer business begins to jostle the regular, full-time worker in the labor market? What happens if the nonemployer model actually begins to replace the traditional employment transaction?

This is one of those times where you just have to shake your head and be happy that you communicate by ‘Net.

The first commenter on that article, Steve Ardire, was good enough to point me to a blog post that references a New York Times article by Floyd Norris with the following, rather astonishing datapoint:

The accompanying charts show the job performance from July 1999, when the economy was booming and companies were complaining about how hard it was to find workers, through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.

(You’ll have to visit the original article in situ to access the ‘accompanying charts’.)

Now, let me try to reduce this to comparable numbers.

Since I don’t really want to take the time to fish out the BLS numbers and since we don’t have nonemployer numbers through 2009 yet, I’ll just note that the nonemployer decade will be slightly different from the employment/jobs decade.

The numbers from the Bureau of Labor Statistics on the number of jobs created and jobs destroyed (net job gains/losses) is for the decade from 1999 through 2009, while the nonemployer numbers are for the decade from 1997 through 2007.

So, we know from the above that the number of new new jobs for the decade from July 1999 through July 2009 was 121,000, an average annual increase of 0.01%.

Over approximately the same period, from March 1997 through March 2007 — not identical but lots of overlap here — the number of net new self-created jobs otherwise known as nonemployer businesses was 6,268,412, an average annual increase of 1.03%.

In other words, the growth rate of net new nonemployer businesses has been increasing at approximately 100 times the growth rate of net new jobs.

And do note that our nonemployer numbers end before the current, very deep recession started — that is, before the job losses really started racking up.

So here’s my question: Why hasn’t anybody (except Mr. Norris) noticed this yet???

I mean, I get that catching the trends before they become statistical and unavoidable and unimpeachable fact is not what government is good at. That’s why they never seem to catch a crisis in advance, before it becomes said crisis.

That’s seriously inefficient but, then, this is the government we’re talking about.

I’m just wondering what sort of anvil has to fall on somebody’s head (and which head, please?) before anybody notices what is blindingly, knock-down obvious to those of us out here in the real world.

What do you think?

Comments