Speaking of jobs: The Coming Jobs War

And speaking of jobs… on the same day that Jobs died, I received an invitation to preview a new book, The Coming Jobs War.  This isn’t a book about the battle to replace Steve Jobs but the struggle to create jobs.  The author is Jim Clifton, chairman and CEO of Gallup.  Clifton confirmed a fact that many of us know but “apparently few leaders” do – that “small and medium-sized American companies fund the great American way….when small and medium-sized American businesses have no growth, there is no money to send to Washington…”

Clifton describes the coming jobs war as a world war and the single most serious leadership threat for the next 30 years.  He passionately believes that for the next few decades, the world will not be led by U.S. political or military force but by the country that creates the most jobs.and quality GDP growth.  The highest levels of leadership therefore require a mastery of a new skill: job creation.

America’s most pressing current problem, according to Gallup, is a lack of good jobs. America will go broke if jobs can’t be found.  Because without a job, people don’t spend, businesses don’t start or grow, and GDP falls.

Jobs are the heart and soul of a nation. Jobs sustain everyone.   

Most of the attention for job creation features the largest companies.  The problem is that there are only about 1,000 companies with more than 10,000 employees. Despite the attention given to these largest companies, they employ just slightly more than 25 percent of all non-public workers.

In comparison, the Census Bureau reports that as of 2007, there were about 6 million businesses in the United States with at least one employer.  Businesses with 500 or fewer employees represent more than 99% of these 6 million. There are slightly more than 88,000 companies with 100 to 500 employees and about 18,000 with 500 to 10,000 workers. Those businesses with less than 100 employers represent nearly 35 percent of all workers and contribute as much payroll as does the largest employers (approximately 30 percent). When you include businesses with up to 499 employees, the number of employed workers swells to 50 percent who earn over 43 percent of total payroll.

If small business is the engine of job creation, then the U.S. has a real problem. Because  the drop in the rate of new business creation since 2007 is 23 percent,  resulting in as many as 1.8 million fewer jobs. In addition the number of employees per new business has been falling, from eight in the 1990s to fewer than six in recent years.