Ryssdal: A million firms is x million jobs, that’s what it means tangibly, right? What kinds of businesses go bankrupt these days? If you have fewer firms competing for workers, there’s just less of a reason to do certain things in the economy that we’ve traditionally been able to rely upon. That’s a big deal, because the downstream impact of a missing generation of what we roughly estimate is a million missing firms that should have been born during that period is really profound when you think about the labor market implications, the competition implications within industries, the wage growth implications. And the hole that we dug was deep enough such that in 2014, which is the latest year the data is available, we had fewer total firms in the economy than we had in 2007, even though the economy itself has grown by more than a trillion in GDP. That had never happened before, even in a single year, and it happened for three consecutive years in 2009, 20.
John Lettieri: Well, what it means is that for the first time on record in 2009, after the Great Recession, we saw the birth rate of firms, the startup rate, cross below the death rate of firms. Kai Ryssdal: What does it mean that companies are dying faster than they’re being formed? The following is an edited transcript of their conversation. He joined Marketplace host Kai Ryssdal to talk more about the study’s findings. John Lettieri is a co-founder and the director of policy for the group. That’s the upshot of a study by the Economic Innovation Group. But now we’re facing an economic situation where companies are dying faster than they’re being created. Not to get all “Lion King” here, but there’s a circle of life in business, just like in the rest of the world.
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