Entrepreneurship facts: Announcing new research data on job creation and destruction by firm age and size

I’m delighted to announce that we now have new research data on job gains and losses by firm age and size across industries and states.

For many years, policymakers, economists, and others have debated whether small or large firms create more jobs. Our Business Employment Dynamics program, which measures gross job gains and losses to help us understand net employment changes, informs that debate with data on firm size. A related question is whether startups or older establishments create more jobs. Again, BLS has a stat for that. We have data on employment and business survival rates by the age of the establishment.

While it’s useful to know the age of an establishment—that is, a single location of a business—for some questions, we need to know the age of the firm. A firm may include several or even many establishments. To understand entrepreneurship in particular, we want to know how both the age and size of firms affect job gains, job losses, and employment growth.

With these new data we can answer many interesting questions, including:

  • How much do older firms contribute to job growth? Firms 10 years or older created 800,000 jobs, or 29 percent of the total 2.7 million net employment gain in the year ending March 2015. See the chart below.
  • How much do startup firms contribute to job growth? In the year ending March 2015, startup firms—firms less than 1 year old—created 1.7 million jobs or 60 percent of total employment growth. More than half these jobs were from firms with fewer than 10 employees.
  • How does the age or size of the firm affect the rate of business closures? In 2015, 788,000 establishments closed. Of these, 55 percent were from firms 10 years or older; 16 percent were from firms 5 to 9 years old; and 28 percent were from firms less than 4 years old. Of the establishments that closed from March 2014 to March 2015, 91,000 of them, or 12 percent of the total, had 500 or more employees.
  • Which firm-age group accounted for most job losses during the last two recessions? Firms 10 years or older lost the most jobs during both recessions. Again, see the chart below.

net-job-changes-by-firm-age

The new research data measure annual gross job gains and gross job losses by firm age and size from March of one year to March of the next. We get the data on firms from the Quarterly Census of Employment and Wages by linking individual establishments over time. Besides firm age and size, we also measure establishment age and size. We have two methods to examine size. One method compares the current size of firms or establishments with the size at the beginning of the year (the base-sizing method). The other method compares the current size with the average size over the year (the average-sizing method).

I really want to know how you like these new data and what we can do to make them more useful. I invite you to explore the data and share your comments. Your feedback will help us develop the dataset and possibly move it into our regular production. Please write your comments below, or you can email the Business Employment Dynamics staff.

Why This Counts: New Timely Data on Professional Certifications and Licenses

To data nerds like us at BLS and many of our data users, there’s little more satisfying than releasing an important set of new, needed information. Today is such a day!

When applying for a job, people often point to their education to show they have the necessary skills to do the job. But many jobs also require professional certifications or licenses. While BLS has published statistics on labor force status by level of education for a long time, nondegree credentials, such as professional certifications or licenses, have received less attention in national surveys. That is, until today—BLS now has a stat for that, too!

Professional certifications and licenses are nondegree credentials that show a person has the skill or knowledge needed to do a specific job. These include credentials like commercial driver’s licenses, teaching licenses, medical licenses, information technology certifications, and many others. They are important. Just take a moment to think about yourself and your family members. Chances are that many of you have such credentials. Indeed, three of my four siblings do: as an accountant, a nurse, and a hairdresser.

To learn more about who has professional certifications and licenses and how they fare in the labor market, we’ve added new questions to the Current Population Survey. That’s the monthly survey of about 60,000 households that we use to measure the U.S. labor force and unemployment rate.

From these new data, we find that 25.5 percent of employed people held a currently active certification or license in 2015.

These credentials are more common in certain occupations. For example, a high proportion of workers in the healthcare field had certifications or licenses.

We also find that employed people with a college degree are more likely to have professional certifications and licenses than workers with less formal education.

percent-with-certification-or-license

Additionally, these new data show that having a certification or license is associated with higher earnings among people with similar levels of education. For example, among workers age 25 and older with some college or an associate degree, people who held a certification or license earned a median of $825 per week. That was 11 percent higher than the earnings of people who did not have these credentials ($742).

earnings-for-certification-or-license

Looking ahead, collecting these data regularly will allow us to see whether the percentage of people with certifications and licenses changes over time. We will also be able to track measures of labor market success for people who hold a certification or license, compared with people who don’t hold these credentials. These new data and analyses will help guide key personal, business, and policy decisions about professional credentials.

The questions in the survey are based on the work of the Interagency Working Group on Expanded Measures of Enrollment and Attainment. This group played an important role in developing concepts and survey questions to measure alternative credentials.

BLS is committed to providing essential labor market information to support public and private decision making. As Commissioner, I am proud of the work done by BLS and others to shed light on this aspect of the labor market. Don’t forget to check out all of our new data on professional certifications and licenses.

Data that Benefits You!

Happy National Employee Benefits Day! Looking for a way to celebrate—since I am certain it’s marked prominently on your calendar? We at BLS are happy to help out by giving you some facts from the unique benefits data we produce.

Our National Compensation Survey helps us answer a simple question: who has what benefits? The survey produces comprehensive data on benefit plans such as holidays and vacations, sick leave, health and life insurance, and retirement plans. Maybe you’ve wondered who reads the detailed benefits descriptions provided by employers. Answer: BLS does! That’s how we gather much of the data behind the benefits reports we publish.

We’ve compiled some “fast facts” below to give you a snapshot of the benefits information we provide. You can use these facts to check out how your benefit plan stacks up or to get background on some of the policy issues in the news these days.

How many private industry workers are offered medical insurance? At what cost?

  • Sixty-nine percent of workers were offered medical insurance by their employer in 2015.
  • Full-time employees were nearly four times more likely to be offered medical insurance by their employer than part-time workers (86 percent versus 21 percent).
  • In most cases, private industry workers had to share the cost of medical insurance, paying an average of $122 per month for single coverage and $476 per month for family coverage.

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Do most private industry workers have access to employer-sponsored retirement plans?

  • Sixty-six percent of workers had access to a retirement plan through their job, frequently a 401(k) plan.
  • The more money you made, the more likely you were to have access. In 2015, 88 percent of the highest-wage workers (top 10 percent) had access, as opposed to 31 percent of the lowest-wage workers (bottom 10 percent).

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What types of paid leave are offered by private industry employers?

  • Seventy-one percent of workers received both paid holidays and paid vacation in 2015. How many days? On average, workers received 8 paid holidays. After a year on the job they received 10 paid vacation days. After 10 years, the number of days increased to 17.
  • Sixty-one percent of workers were offered paid sick leave.
  • Nineteen percent of the lowest-earning workers (bottom 10 percent) received both paid vacation and paid sick leave, compared to 84 percent of the highest-earning workers (top 10 percent).

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What types of financial benefits are provided in private industry?

  • Thirty-nine percent of workers received a nonproduction bonus such as an end-of-year bonus or cash profit sharing in 2015.
  • Nearly one in four workers had access to a Health Savings Account.
  • Eight percent of workers were offered stock options.

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Partnering with the States to Provide Labor Market Information

I am fortunate to have so many opportunities to speak about the Bureau of Labor Statistics and how the information we release—almost daily—helps Americans make smart decisions. Recently, I’ve spoken to academics, students, researchers, business leaders, labor officials, policymakers, and more. No matter the group, I’m often asked what data we have for a specific state or local area. While people care about national trends—the current (February 2016) national unemployment rate of 4.9 percent is the lowest rate since November 2007—they also want to know what’s happening closer to home. People in Iowa want to know their unemployment rate, 3.5 percent in January 2016, just as people in Mississippi want to know their unemployment rate, 6.7 percent.

I hope all users of BLS data appreciate that BLS is able to produce much of our national, state, and local data because of our partnerships with the states.

BLS and our state partners work together to publish comparable data in two broad subject areas: the labor market (employment, hours, and earnings) and occupational safety and health (workplace injuries, illnesses, and fatalities). I emphasized “comparable” in the previous sentence because we must be sure we measure conditions well and in the same way across localities. Otherwise, it’s hard to know how your area stacks up—in either level or trend.

Today I will focus on our Labor Market Information (LMI) programs, the first of which started over a century ago to collect employment, hours, and earnings for states and metro areas in 1915.

Four BLS programs make up the LMI family:

  • The Current Employment Statistics program provides the very timely monthly report on payroll jobs for the nation by detailed industry. It also provides employment data for states and metropolitan areas. Did you know California gained 442,400 jobs from January 2015 to January 2016? That was more jobs than any other state, but seven states had larger percentage gains. Idaho had the largest percentage increase, 3.7 percent, compared with 2.8 percent in California.
  • The Quarterly Census of Employment and Wages is a complete count of all employers who file Unemployment Insurance reports with their states. This program provides our most detailed geographic breakdowns, with information down to the county level. Cuyahoga County, Ohio, where I used to live, had 713,000 wage and salary workers in the third quarter of 2015, and their average weekly wage was $985.
  • The Occupational Employment Statistics program provides employment and wage information for detailed occupations. The program provides data for the nation, states, metropolitan areas, and other geographic groupings. From this program, we learn that accountants and auditors in Boise earned an average of $31.21 per hour in 2014; the national average for accountants and auditors was $35.42 per hour.
  • The Local Area Unemployment Statistics program provides unemployment data for states and local areas. Interestingly, both North and South Dakota had 2.8 percent unemployment rates in January 2016, the lowest in the nation.

state-unemployment-rates-in-january-2016

BLS and the states work together to decide what information we and our customers in the public and private sector need to learn about the labor market. Together we decide the best methods for collecting accurate, relevant information at a cost that provides the best value for taxpayers. BLS and the states collaborate on collecting the data, ensuring its accuracy, and publishing it quickly enough for public policymakers, businesses, and families to make good decisions.

Our partnerships with the states foster a culture of continuous improvement, as we test new ideas and methods to deepen our knowledge of the labor market. We strengthened this partnership through the Workforce Investment Act of 1998 and more recently the Workforce Innovation and Opportunity Act of 2014. Working together, we strive to produce and improve labor market information that serves the needs of local communities across the country.

 

Thinking About a New Job? Try Healthcare

Editor’s note: The following has been cross-posted from the U.S. Department of Labor blog. The writer is Michael Wolf, chief of the Division of Occupational Employment Projections at BLS.

Healthcare jobs have a bright outlook. In fact, about 1 in every 4 new jobs added to the economy between 2014 and 2024 will be in healthcare fields, according to Bureau of Labor Statistics projections.

health-care-1-in-4

What’s behind this wave of growth? A couple of factors: The baby boom generation is aging and people are living longer, so there will be more older people who need healthcare services to remain healthy and active. Also, rates of chronic conditions like diabetes and obesity are growing, so more healthcare workers will be needed to help care for people with conditions like these. And because more people have health insurance due to federal health insurance reform, they’re also more likely to use healthcare services, increasing the demand for many kinds of healthcare workers.

health-care-growth

Healthcare job opportunities are found across all education levels—from graduate degrees to just a high school diploma. However, wages are typically higher for those that need more education.

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Explore these jobs and many more using the online Occupational Outlook Handbook at www.bls.gov/ooh. Need help finding a job or changing careers? Visit your local American Job Center or explore our online resources.