Employment

New Businesses Add More Jobs

New businesses founded last year employed 15 percent more workers than those started in 1995 -- even though the pace of new business formations increased only 1 percent over the previous year, according to Dun & Bradstreet Corp.

  • New businesses formed in 1996 numbered 170,475 -- up from 1995's 168,158.

  • Employment by last year's start-up companies rose to 846,973, compared to 738,606 the previous year.

  • This suggests that the average new business employed five workers last year -- up from 4.4 in 1995.

Analysts suggest the increase may reflect a shift by entrepreneurs to more labor-intensive industries. They say that companies just starting out are the most consistent sources of new jobs in the country.

In New England, there was a significant increase in start-up employment despite a decrease in business formation activity: 3.1 percent fewer new firms compared to 17.7 percent more jobs.

Source: Michael Selz, "New Firms Created More Jobs in 1996 Than During 1995," Wall Street Journal, March 4, 1997.

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