More Job Creation, Less Pay, More Churn At Startups

From (11/29/2012)

Newer firms are leading the way in job creation, suggesting that greater opportunities are arising within the startup community than with established organizations. However, employees at newer firms make 30% less than their counterparts in mature organizations.

These are the findings of a new study released by the Ewing Marion Kauffman Foundation, an entrepreneurial think tank. The study, based on the U.S. Census Bureau’s Quarterly Workforce Indicators, finds that young firms disproportionately create jobs. The youngest firms (ages zero to one) account for about 15% of overall job creation while firms between two and ten years old account for about 25% of job creation. Combined, these two groups account for about 40% of job creation—much higher than their combined employment share of 25%.

The percentage of hiring based on job creation is much greater at startups than at more mature firms. Four out of every 10 hires at startups are for newly created jobs, much higher than in older firms, where the ratio fluctuates between 0.25 and 0.33.    Read the full article