Start-Up Rate At 25-Year Low
August 17, 2011 by UPI - United Press International, Inc.
CHICAGO, Aug. 17 (UPI) — The entrepreneurial spirit in the United States is in decline with the start-up rate among the unemployed at its lowest since 1986, a research firm said.
Outplacement consulting firm Challenger, Gray & Christmas said the rate of unemployed managers and executives seeking to start their own businesses dropped to 2.5 percent in the second quarter of 2011, the lowest rate since the firm began keeping track of the statistic.
The survey of 3,000 job seekers includes “all career levels,” the firm said, but the survey pool “tends to skew” towards unemployed former managers and executives, Challenger, Gray & Christmas said in a statement.
Still, the numbers are telling. For the first six months of the year, 3.3 percent of job seekers decided to see if they could make it on their own, down from a previous record low for six months of 3.7 percent set in the first half of 2010.
Even in an era littered with failed start ups, 2001, when the dot.com bust occurred, the average rate of start ups far greater, involving 8 percent of job seekers.
The Labor Department says those defined as self-employed has fallen from 9 million in July 2009 to 8.6 million currently, a drop of 4.4 percent.
Challenger, Gray & Christmas said the lack of lending is part of the reason start-ups are not sprouting. “Lending is still extremely tight and for many of those wanting to start a business, funding the venture with credit cards or through a home equity loan are no longer viable options,” said Chief Executive Officer John Challenger.
He also noted, “We are coming out of the deepest recession this country has seen in decades.”