Federal Reserve Asks "Where Are The Jobs"

Tyler Durden's picture

Five years into the "recovery" and The Atlanta Fed thinks it's time to figure out where jobs come from (spoiler alert: there is no job tree). The Atlanta Fed has investigated trends in a variety of firm types to better understand why labor market progress continued to be slower than hoped for in 2013... the findings - when it comes to job creation, there is no simple solution. But Ben and Janet said?...


Who or What Creates the Jobs?

A striking feature of the Great Recession was not so much the rise in the number of firms cutting their payrolls—that always happens in recessions. What was unprecedented was the dramatic collapse in the number of firms that expanded. Early in the recovery, firms continued to have the lowest rate of job creation on record, and fewer new firms were created in 2009 and 2010 than in any other time in the previous 30 years. Although the unemployment rate fell faster than expected in the latter part of 2013—roughly four-and-a-half years into the recovery—hiring rates at firms were still relatively subdued.

The Atlanta Fed has investigated trends in a variety of firm types to better understand why labor market progress continued to be slower than hoped for in 2013. Researchers started by looking at small firms, since their economic struggles are often singled out as a major reason why the U.S. jobs engine has faltered. These researchers found that all businesses were hit hard by the recession. They looked at firms across a variety of dimensions—age, size, industry, and location—to determine where the jobs are.

Small firms versus large firms

Most businesses are small. Almost 96 percent (or 4.7 million) of firms had payrolls with fewer than 50 people in 2011 (the latest census data available). These firms accounted for 28 percent of all payroll jobs. They also create many new jobs—about 40 percent of new jobs each year, on average. However, the rate of gross job gains fell sharply for small firms during the recession and recovery, in part because fewer new firms were created but also because small firms sharply curtailed hiring as heightened uncertainty and a weak economy made them more hesitant to expand.

Large firms are also an important source of new jobs. The largest 1 percent of firms account for about as many new jobs each year as do all the firms with fewer than 50 employees. But large firms have also been creating jobs at an unusually slow pace.

New firms versus young firms

Start-ups gained a lot of attention in the aftermath of the recession, in part because of the dramatic decline in new business formation. These new firms are also important because they create an outsized share of new jobs. In 2011, 8 percent of firms were new—most of them were very small—and they contributed about 16 percent (or 2.5 million) of new jobs that year. But having a continual flow of new firms each year is important because the jobs that start-ups create can be fleeting. Indeed, more than half of young firms typically fail within their first five years of operation.

Gazelles versus gorillas

Although many firms fail in their early years, a small fraction of young firms grow very rapidly. These so-called gazelle businesses are also a significant source of job creation. A recent Atlanta Fed study looked at the properties of fast-growing Georgia firms during the 2000s and found that about half of the firms that had a high rate of employment growth were young. However, more jobs were generated by older, generally larger, fast-growing firms, sometimes called gorillas. On a national level, high-growth firms have declined as a share of all firms, from 3 percent in the late 1990s to 1.5 percent in 2011. During the same time, these fast-growing firms added fewer jobs, falling from 45 percent of jobs created at expanding firms to 34 percent.

While data on these and other characteristics provide a window into the types of firms that typically create jobs, they also underscore the fact that when it comes to job creation, there is no simple solution.


One can't help but read this and consider the underlying pressure this implies to maintain the large companies at the expense of the small ones?

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The Gooch's picture

End. The. Private. Fucking. Cartel.

Keyser's picture

The only industry that has constantly added jobs over the last 5 years is the gubbamint... There's your growth industry, at your and my expense... 



jbvtme's picture

if you are a middleman (and most people are: real estate, retail, teacher...) the internet will take your job if it hasn't already. just bought a pair of shoes. free shipping in both directions. no tax. add to this robotics and jobs are dinosaurs.

CH1's picture

You want jobs? Then LEAVE PEOPLE ALONE... as in "not stealing half of what every productive person earns."

Yeah, I know, the sociopathic thieves will never go for it.

Why is it that people obey them?

kaiserhoff's picture

As in complete, miserable, fucking failure.  Thanks, Ben.

wee-weed up's picture

Not for Ben and Obozo's rich friends.

corporatewhore's picture

Or Bush's, Halliburton, Searle, etc.

kaiserhoff's picture

Government salaries and benefits are at all time highs,

  as is government/transfer payments as a percent of GDP ~ 50 percent nominal,

  but much higher if you include off the books liabilities.

SafelyGraze's picture



(what would the rockefeller institute say?)

former one-hearbeat-from-the-presidency nelson 

wee-weed up's picture



"Jobs????  You mean where folks have to work and such?"

"What a quaint notion."  -- Free Shit Army

saints51's picture

Do you read the shit you type before posting?

Stormtower's picture

Ok....but look at the huge growth in the legislative and judicial branchs. Everyone in government now has major bennies and huge salaries compared to the private sector........they also double and even triple dip on retirements. Insane!

The Gooch's picture

Certified, sociopathic goons can "get a job" with the Hobbs, NM "police" and earn between $22.28 -$25.62 an hour!

Bonus: A $25,000 housing incentive for five years or $50,000 for 10!

Call "The Chief" @ 575 393-cops

Can't make this shit up.



Carl Popper's picture

You are failing to include those who survive on government contracts for services and widgets.   They are de facto government employees like me.


90 percent of my patients are gooberment insurance

Offthebeach's picture

Any layoffs amongst the navel gazers at The Fed?

No, suppose not...

Matt's picture

Working at the Federal Reserve is not a government job ...


Gold Eyed Cat's picture

I am not sure if you are joking or not.

This is the same old "change the definition" trick that the governement has been using for years.  There are more government employees than EVER.  They are now called "contractors" and they are hired by companies whose only reason for being is to take government money and then issue payroll checks to people doing government work.

I know this first hand.

Really, you should know better!




doctor10's picture

How come anything a Federal Beurocrat can't understand is so complex? Too much taxes, too much regulation, too many licenses, too much insurance, crappy USD.

and, oh, by the way, rule of Constitutional Law is in the way of the beurocrats-so they disregard it


That's all.

Carl Popper's picture



Those things increase employment friction.

newworldorder's picture

They do not live in the real world where they have to produce for a living. This also includes most economists and  academics. The real world seldom intrudes in their elite musings.

JLee2027's picture

Drudge had the classic article this morning. Sorry if this is a repost:

86M Full-Time Private-Sector Workers Sustain 148M Benefit Takers


dirtyfiles's picture

why bother if only one job counts "printing press operator"

813kml's picture

Well, I hear that Steve is six feet under.  Not sure about the rest of 'em.

Caveman93's picture

Atlanta..enough said right there.

Falconsixone's picture

That's where the walking dead are!!!

A Nanny Moose's picture

Where are the jobs?

Inflated away.

Flakmeister's picture

Exported to China while the pension funds were looted by the plutocrats...

A Nanny Moose's picture

Strawman. There is no more powerful man-made force than currency debasement, Skippy.

Those jobs are not outsourced if currency maintains its purchasing power. PERIOD.

Flakmeister's picture


Please explain how....

What happened is simple wage arbitrage....

BTW, you would do well to lay off the Skippy shit....

Matt's picture

There are many tools used to drive jobs over to China. Labour laws, unions, environmental regulations, taxes, etc. Even if the USD maintained its purchasing power, that would not stop China from fixing the exchange rate to gain an advantage. Also, intellectual property theft.

MeBizarro's picture

One of the dumber comments I have seen on here in recent memory.

thethirdcoast's picture

Except that, thanks to NAFTA, WTO, GATT, IMF, TPP, etc, they actually did, take our jobs.

Pure Evil's picture

And, the job's they can't outsource currently, they fill with imported foreign labor.

yogibear's picture

Multinationals always crying for more H1Bs because they can't find the talent at the right price.

Hohum's picture

The real story about jobs is that tens of millions of people have jobs that add little to our welfare.  No one will admit this to himself, though.

kaiserhoff's picture

What Hohum said ^^^^^^^

813kml's picture

Welfare is a job, and I hear it pays pretty good.

lotsoffun's picture

pays ok - i gots' to get my scratch offs and power ball and some old english and then order some papa johns for the knicks game.  it's a lot of work.  sometimes i wake up at 11 and it's tough getting back to sleep.


Offthebeach's picture

You try managing 3 IDs, 4 EBT cards in 3 states, one Fed Gov disability, 3 babymommas, 6 of my childlins, 6 of herses, plus a house painting company and for rental duplexes. I be beat every day.

spine001's picture

When an ecosystem is not allowed to eliminate the large non productive components, it ends up killing the whole ecosystem.

Keyser's picture

Currently TPTB cherish the useless eaters for their votes and pay them handsomely, with our tax $$$...


Heyyouguys's picture

What a bunch of BS. Bttom line if you lost your job at a good salary, you're only hope is finding another at a lower salary.

blackchips's picture

Dear God how stupid does the Fed believe we are? Have they been so busy printing for the ruling class that they failed to notice their country's slaven, golden, middle class geese have been slaughtered at the hands of Marxists who have overtaken governement policy and, uh, 1/6 of the US economy with Obamacare?

The REAL census numbers came out: 86 million MAKERS for 126 million TAKERS now in the US. How f'ing far does the FED believe we'll get growing THAT economy? What IDIOTS.



Flakmeister's picture

The good jobs started disappearing in the 80s....

Long before Bennie and the Inkjets...