News Archive: May 2010
U.S. Entrepreneurial Activity Rises in 2009 to Highest Rate in 14 Years
Kansas City (May 20, 2010): Rather than making history for its deep recession and record unemployment, 2009 might instead be remembered as the year business startups reached their highest level in 14 years – even exceeding the number of startups during the peak 1999-2000 technology boom.
According to the Kauffman Index of Entrepreneurial Activity, a leading indicator of new-business creation in the United States, the number of new businesses created during the 2007–2009 recession years increased steadily year to year. In 2009, the 340 out of 100,000 adults who started businesses each month represent a 4 percent increase over 2008, or 27,000 more starts per month than in 2008 and 60,000 more starts per month than in 2007. In 2009, 558,000 new businesses were created each month (0.34 in 2009). The index increased for the second straight year, from 0.30 percent in 2007 to 0.32 percent in 2008.
"Challenging economic times can serve as a motivational boost to individuals who have been laid-off to become their own employers and future job creators,"said Carl Schramm, president and CEO of the Kauffman Foundation. "Because entrepreneurs drive the economy, the growth in 2009 business startups is encouraging and hopefully points to a hopeful trend in terms of our economic recovery."
Is Counting 'Green Jobs' a Green Job or a Hazardous Undertaking?
New York (by Saqib Rahim of ClimateWire in New York Times, published: May 24, 2010): On a good day, Michelle Charak might haul away 300 boxes of outmoded buttons from a factory that's all too happy to lose the clutter. At her shop in New York City, she'll hand-stitch the buttons into chic necklaces and bracelets, then sell them on her company's website, Chelcnyc.com, for hundreds of dollars a pop.
Is that a "green job"? Charak says so. "They think it's junk. So I take their junk and I make something," she says. "It's not your typical green job, but it has probably a lower environmental impact than most of the green jobs out there."
According to the Department of Commerce, she may be right. Last month, the agency released "Measuring the Green Economy," an early attempt to take inventory of how many "green jobs" exist today -- and what should count anyway. The report says selling "used merchandise," including toys, books and jewelry, can be thought of as a green job.
13 Reasons for Believing in This Recovery
New York: As expected, economic activity in March was significantly improved over February's
weather-related sluggishness according to the montly Economic Update from Deloitte. Gains in some areas were even stronger than anticipated. To download the full report, click here.
• Retail: A slightly earlier Easter, compared with last year, helped sales in March. Gains are becoming more widespread
• Motor Vehicles: Unit sales of vehicles in March rose, helped by incentives
• Consumer Products: Increasing retail sales are helping production, which has risen for 7 of the last 8 months
• Aerospace & Defense: Production remains wobbly. It rose slightly in March, although it had declined in 4 of the previous 5 months
• Process & Industrial Products: With signs that capital spending is picking up, machinery production has been rising sharply. Production of nonenergy basic materials has improved for 3 consecutive months
• Lodging: Revenue per available room rose in March on a year-over-year basis. It was the first increase since mid-2008
Low Hispanic College Graduation Rates Could Threaten National Education Goals
Washington, DC: Hispanic students generally graduate from four-year colleges and universities at lower rates than their white peers, even among schools with similar admissions standards, a new report from the American Enterprise Institute finds. Click here to download the full report.
Funded by the Bill & Melinda Gates Foundation, the report, Rising to the Challenge: Hispanic College Graduation Rates as a National Priority (48 pages, PDF), found that 51 percent of Hispanic students who start college complete a bachelor's degree in six years, compared to 59 percent of white students - a disparity that holds true regardless of student ability or school competitiveness. Even many federally designated "Hispanic-serving" institutions are graduating fewer than half their Hispanic students. Colleges and universities that do a better job graduating their Hispanic students typically have high completion rates across the board, suggesting that institutional commitment to college completion drives higher graduation rates for all students, including minorities.
In response to these and other factors, the report calls for institution-wide commitments to ensuring that all students graduate; the dissemination of information about schools that have a successful track record with Hispanic students to help better match Hispanic students with colleges and universities; and reforming government funding to colleges and universities so that it is tied more closely to how well schools serve their students, rather than how many students they enroll. With the Hispanic population in the United States growing rapidly, the report questions whether the nation will be able to achieve the president's goal of reclaiming its status as the world's best-educated country if changes are not made to help boost Hispanic college completion rates.
"Educating all students well and getting them across the finish line is the biggest challenge facing higher education today," said Hilary Pennington, director of education, postsecondary success, and special initiatives at the Gates Foundation. "These are the students who are going to replace the baby boomers and who we will rely on to drive our economy over the next several decades."
New Subsidized Employment Program
Lancaster: On Wednesday, May 19, Scott Sheely, Executive Director of the Lancaster County Workforce Investment Board announced that the PA CareerLink of Lancaster County in partnership with the PA Departments of Labor and Industry and Public Welfare will be offering a work experience program for young people ages 18-24 called Way to Work and for adults 18 and over called the Adult Subsidized Employment Program. See attached for a downloadable summary by clicking here as well as an employer application by clicking here.
Essentially, the program provides very low-cost labor through September 30, 2010
Government subsidies pay the cost of the wage to the participants;
Placements are for a minimum 20 hours per week and a maximum of 40 hours per week;
Wages for the Way to Work program will be the minimum wage of $7.25 while wages for the Adult Subsidized Employment program can vary up to a maximum of $13 per hour;
A competitively procured staffing service will be the employer of record providing payroll services and worker's compensation coverage;
However, employers are responsible for the employer share of relevant federal and state taxes which we calculate to be roughly $2 per hour and any wages and associated fringe benefits paid above the $13 hour limit for employee wages;
Exceptions to the $2 per hour contribution will be made for non-profit organizations;
Placement sites will have the opportunity to interview the candidates for placement in their businesses or organizations.
Program participants will be people using the welfare system (cash assistance, food stamps, medical assistance), low-income families, and dislocated workers who have exhausted their unemployment benefits who have graduated from the Ready2Work program and, wherever possible, completed at least one training program offered by the PA CareerLink. Many will be people who have a work history but who just have not been able to find employment due to the recession.
What Makes a City Entrepreneurial?
Cambridge: Why are some metropolitan areas so much more entrepreneurial than others? Silicon Valley seems almost magically entrepreneurial with a new startup on every street corner, but in declining Rust Belt cities such startups are far and few between. High levels of entrepreneurship are closely correlated with regional economic growth. Places with abundant new start-ups also experience faster income and employment growth. Areas with more small, independent firms far in the past have tended to do better.
Unsurprisingly, local policy makers who are looking for ways to rev the economic engines of their cities are interested in policies that can generate more entrepreneurship. Therefore, understanding the determinants of entrepreneurship can help guide the development of more effective economic development policies, both locally and nationally. Click here for a downloadable copy of this February 2010 Policy Brief from the Kennedy School of Government at Harvard University.

