Chart Of The Day: Where Do Jobs Come From, And Where Do They Go To Die?

Tyler Durden's picture

In short: young firms.

As the following chart summarizing OECD data for the developed world, all the net job creation in the 21st century has come from firms that are 5 years old or less, having even created jobs during the peak years of the post-Lehman depression. And where do jobs go to die? Simple - old corporations, as firms older than 6 years having been net eliminators of jobs since the year 2001!


What is perhaps paradoxical about this data, is that as we have shown in the past, the one age group that has benefited the most in the US "New Normal" are old workers, those 55 and above, who have been the net recipients of all job creation since the onset of the second great depression (and whose employment level just hit all time records). As for workers under 55, i.e. those in their prime, they still have several million jobs to recover before they get back to even.

The conclusion? In order to spur a true recovery, and not one of the S&P500 price level, where corporations give the impression of normalcy as a result of corporate buybacks and QE of course, governments of the developed world should encourage creation of new firms. Instead what do they do? Allow themselves to be manipulated and pander to the well-established D.C. lobbies of the decrepit corporate cryptkeepers that control all the levers... and continue to fire in droves.

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Shizzmoney's picture

Probably one of the most important posts I've ever seen on this site.

CrashisOptimistic's picture

Not really.  If you view this through the prism of automation it is obvious older firms will be eliminating people.  And new firms haven't hired anyone before they existed so of course they are a net hirer.  How could they be a net firer if they had no employees before?

NotApplicable's picture

LOL, Tyler is telling criminals how to help the economy. As if they care.

Better yet, how many of those "young firms" are nothing but NSA/CIA operations?

CrazyCooter's picture

There are no young firms anymore, that is what Obamacare is for! Growth fuel for the insider corporations, before they automate the jobs away ... ?



Occident Mortal's picture

Pension savings are not needed by the money markets so long as ZIRP is in place.

So annuities have collapsed as pension saving are surplus to requirement (why rent pension capital when you can get ZIRP?)


Over 55’s can’t afford to retire until rates go up and annuities recover (annuities can’t recover until ZIRP ends).


The lack of retirement turnover in the labor market, is what has killed opportunities for the young (we have a yawning generation of NINJA’s aged 20-35)



It’s all an unintended consequence of ZIRPing zombie banks back from the brink. God bless those banks and all who sail in them.

jbvtme's picture

we live in plywood boxes, eating mono cropped weeds grown under chem trailed clouds, wearing chinese slave made gmo fabric clothes, listening to the devil chant rap sodies, we are circumcised, vaccinated, brainwashed and catie couric at some point will reassure us that fukishima is a are the least of our problems

NotApplicable's picture

Sadly, this is NOT unintended. If I understood this outcome in advance, so did they.

Miffed Microbiologist's picture

Yes, this reminds me of the alien's reply to Bill Paxton's comment " What do you want us to do?" Die...Die...Die. More people need to wake up to the reality of this simplicity. The numbers dont work and as a cattleman innately knows you must cull the herd.


NotApplicable's picture

My guess is that Ray will succumb to entropy long before The Singularity arrives, as it seems he forgot to account for the fact that the world is run by criminals who cannot help but to usher in the next Dark Ages.

Which is kinda funny, given his book is filled with calculations supporting his thesis on every subject but the most important, underlying one.

Dick Buttkiss's picture

While I'll be the first to grant that the state — i.e., government and those who control it — is conspicous by its absence in Kurzweil's essay, the fact is that the state is collapsing under its own weight (and the increasingly weightlessness of its Monopoly money) the world over. And while I don't deny that the sociopaths who run them are capable of absolutely anything, I don't see the mayhem as being so extreme as to send the world down The Road.

Yes, it could be (in which case I wouldn't want to survive it even if I could), but I believe instead that world that Just Says No to the state will simply move on, gathering itself as it is naturally capable, once the chains have come off.

Thus will humanity transition, following a very difficult interlude, into a vastly more technological, and individually empowering, reality.

Son of Captain Nemo's picture

And there in-lies the permanent fatal rub.

All of these IT Corporations are making their profits on metastasizing Federal Budgets with no end in sight while at the same time since 2001 shipping that technology for cheap labor everywhere else but U.S. shores which makes it rather difficult to pay for “those budgets”…

If you wanna buy depleted uranium rounds for your tank, a commercial nuclear reactor, or an F-35 fighter with too many moving parts to function that has flunked all of it's operational tests excluding it's guarantee(s) of stealth, and maintenance costs that will end up being 5 times the price of the aircraft in 10 years time -than made in America is for you!

I'd include the American gun manufacturing in that mix but the Fed like it’s CB is trying hard to curb and control production in that industry as well, especially ammunition within the last couple years.

Outside of that it’s Cypress style bail-ins all the way to strip the remaining carcass and a hot meal at the convenient FEMA Region in your jurisdiction!

CrazyCooter's picture

it is obvious older firms will be eliminating people

Then why the age disparity in workers? Are you suggesting that the jobs which are being automated displace young workers more than old workers? I would expect automation to more or less equally displace old and young.

I found it very though provoking, because a system like this, if consistent over the long run, sure seems to be eating its seed corn.



WhyDoesItHurtWhen iPee's picture

Most older workers cannot afford to retire and will take any McJob they can to survive.

NotApplicable's picture

Older workers contain something that younger workers lack, and that cannot be automated: experience.

The disruptive process itself isn't necessarily capital consumption, assuming A) No fed driven malinvestment, and B) the newer firms are more efficient at providing valued goods and services.

But... given the fed is NOT going away anytime soon, then yes, the seed corn is not only being eaten, but pissed upon and left to rot.

Miffed Microbiologist's picture

I think they also are more dependable as well. I'm shocked how many times my daughter is called in to her job on her day off to fill in when someone just didn't show up or call in. I never did this even in my menial jobs when I was a teenager. Her boss keeps firing and hiring all the time to no avail. I guess it's just more fun to hang out with friends than be a cashier at a convenience store. Besides, the owner gets pissed when the register is off and that really can affect ones self esteem!


CrashisOptimistic's picture

>>Then why the age disparity in workers? Are you suggesting that the jobs which are being automated displace young workers more than old workers? I would expect automation to more or less equally displace old and young.>>


Because the old are managers.  Managers don't automate themselves and then fire themselves.

JMT's picture

Are they paying enough though?? I hear that some jobs still pay less than $40,000 a year.  Need around $6,000 a month just to make ends meet as a single person -- no wife, child, parent, or even pet to support. 


pavman's picture

Perhaps you should consider cutting your expenses; you'd be surprised how much need is really luxury that can, and in most cases should, be eliminated.

ejmoosa's picture

You need 72k a year AFTER taxes to get by?

Youv'e made some poor lifestyle choices, it would seem.

duo's picture

Lay off workers, cut R and D, shrink packages, raise prices...use cash to buy back stock.

That is NOT capitalism.

RSloane's picture

One of the first actions of GM after their bailout was to invest millions in a new R&D facility in China. None of those elements were capitalism, either.

MeBizarro's picture

In what alternative reality especially when it greatly reduced SG&A costs, give them potentially greater access to the only booming car market in the world, and potentially may better align their development to match Chinese consumer preferences and not American.

It is the essence of capitalism.  Reduce costs, move research and production closer to your market, and try to better align development to match local consumer preferences. 

ZH is full of nonsense BS on what capitalism really is. 

CrashisOptimistic's picture

Really?  Was prioritizing unions over bond holders capitalism?  Or merely illegal.

Kayman's picture


   Are interest rates set by the free market ? No.  They are dictated by the Fed for the benefit of a small group.

   When you play fast and loose with other peoples' money and become insolvent, do you die like the economic textbooks say you should ?  No.  You paint yourself as Too Big to Fail and get your buddies in government to save your rotten ass by robbing the general public of their hard-earned money.

  Capitalism doesn't exist. Cronyism is alive and thriving.  Until the last private sector worker says fuck all of you parasites.

   And speaking of alternative realities, what other country in the world would provide unfettered free access to their home market and kill off their own employment while enriching a dangerous competitor.  Don't tell me....I think I know.

   To the point of the article- while capital assets, including the substitution of labor with automation, are subsidized through ZIRP, labor including employment in general and wages in particular will continue to be crushed.

Duc888's picture



Hey FEDGOV is hiring.

Rally on!

They need more brownshirts.



Dr. Engali's picture

Creative destruction at work bitchez! Now it's time to regulate those upstarts out of business.

starman's picture

Hurry with need more face farts and  tweeterz! 

Skin666's picture

"Capitalism [...] is by nature a form or method of economic change and not only never is but never can be stationary. [...] The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates. [...] The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation [...] that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in." Joseph Schumpeter

Rising Sun's picture

do you have a point?  or are you just spewing to impress those who aren't that you have memorized someone else's shit?

Debugas's picture

Schumpeter was well known economist who did understand what capitalism really is

NotApplicable's picture

The point is that this chart represents nothing new. The only reason it's so dramatic is due to the Fed's distortion of this natural process.

Fuck, if the Fed had existed thirty years earlier, we might still be supporting the buggy whip industry today.

Channel stuffing, bitches!

MeBizarro's picture

Yeah in fantasy land maybe.  In reality, it depends on increasing access to an endless suppply of new markets and more importantly for technological and organizational improvements to keep ahead of the costs of supply inputs especially raw materials.  Global companies may have much greater access to increased human capital but lock around at the cost of raw materials. 

We have completely tapped out the sources of cheap sweeet light crude and high-value ores deposits globally.  Mabye technology allows us to keep pace and ahead of this issue in the 21st century but I wouldn't bet on it and that much of what Schumpeter wrote along with what is undermines our understanding of how macroeconomics & capitalism work will be seriously adjusted by the end of the century and likely even by mid-century.  

Times of abundance are over and with it much of what underpines Schumpeter's idea of creative destruction.  It is a radical idea now (it was when i was doing my PhD) but it is becomign less and less so especially among the corridors of power.  Just read the DOD documents that are coming out or what agribusiness is doing or what finance is saying.  They see the writing on the wall in the 21st century.   

Kayman's picture

Unfortunately Schumpeter didn't apply "creative destruction" to banking in general and the Fed in particular.  Year after year of failed monetary policy and banking monopoly and where are we ? Oh yeah, we create more excuses to keep pouring fresh blood into dead meat.


Orwell was right's picture

CrashisOptimistic beat me to the punch.   Of COURSE new firms are net "hire"....they're NEW.  

As for the unrelenting bashing of "old people".... the Tyler's need to make up their minds.   Either you want them still working and not relying on "government entitlements" or you don't.   You can't kick them out of the work force and then bitch because they need money for meds/food/etc.    If you leave them in the work force, so they are somewhat self sufficient, then you can't bitch because they haven't left yet....

JMT's picture

Many of these 'old people' supported and still likely support their Gen Y offspring and are the ATM machine when Taylor or Caitlin needs to pay their credit card bills or the $699 a month car payment (plus insurance) but many of these 'younger' firms seem to only want to hire kids nearly fresh out of college of course with the token minorities who are not here from overseas....  

MeBizarro's picture

Federal gov't in FY12 spent over $25k per capita on the elderly (age 65 and older) and under $4k (~$3800) per children (18 and under).  Elderly poverty went from over 30% in '65 to below 10% in '12. 

This will inevitably get a massive thumbs down given the geezers on here but the federal gov't is engaging in massive wealth transfers to the elderly and this is economic suicide over the long-term. 

Dr. Engali's picture

The Tyler's aren't bashing the older workers. They are simply pointing out the flaw in the workforce participation rate argument. The propagandists like to suggest that the participation rate is so low because people are retiring early, which is clearly not the case. 

RSloane's picture

Yup Doc. Most of our 'data' is imaginary anyway, and you can make a strong case for or against almost anything related to labor depenedent on whose numbers you rely on.

MeBizarro's picture

Yeah all of the numbers are imaginary and completely made up.  Their are always some limitations to the way the data is collected and methodology on calculations but the US has some of the best economic collection data around espeically the Household surveys and local area data that is collected.

This is just a foolish response and almost a complete guarantee that you no almost nothing about the data, have never used it, or are one of the kooks who just yells 'it is all made up.'  

Kayman's picture


When inflation is being skewed by subjective factors like "utility" then yes, it is all made up; tainted to favor political goals.

In 1968 a Big Mac, side of fries and a coke (the meal) were less than $1 dollar. Tell me that inflation hasn't increased some 500 to 700 percent since then. And dispense with the nonsense that Rotten Ronnies meals taste better today ! 

Kayman's picture

The more interesting numbers for older workers retiring would be the ratio of public vs. private sector employees.

Seasmoke's picture

I'm going to open a new business just so I can fire people , including myself. 

Sudden Debt's picture


at least they're adding to the employment numbers...

angel_of_joy's picture

It doesn't really matter. 10 years from now most of those jobs will be automated too...

ejmoosa's picture

What keeps younger companies from adding more jobs?  They are burdened by rules and regulations and their profits are under duress for longer that what we used to have, and even if they do survive, they are barely surviving.  

Older companies, have by default, been profitable.  They are only able to maintain that profitability by reducing the costs that they can, like their labor numbers.

This is not rocket science people.  The costs of rules, regulations and government engineered outcomes are destroying the American Economic Engine.


I no longer believe that is an accident.  It is by design.

Raging Debate's picture

Exactly EJMoosa -

I could add four people this year but will only add one. I'll do the same as next year and for the next several years and dump profits into real estate. The government has discouraged me from innovating (at least at the pace I really enjoy) so may as well not kill myself further and enjoy some of the little things I have missed while raising kids and what not. There really is no major hurry or urgency now.

Raging Debate's picture

Exactly EJMoosa -

I could add four people this year but will only add one. I'll do the same as next year and for the next several years and dump profits into real estate. The government has discouraged me from innovating (at least at the pace I really enjoy) so may as well not kill myself further and enjoy some of the little things I have missed while raising kids and what not. There really is no major hurry or urgency now.