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While small businesses have long been considered the country’s largest job creators, new businesses are not creating as many jobs as they used to, The Wall Street Journal reports.
The average number of people employed by nascent businesses fell sharply during the pandemic, helping accelerate a downward trend. The rise of smaller entrepreneurial ventures is one of the first signs of how pandemic-inspired businesses have reshaped the economy.
Businesses launched between March 2020 and March 2021 had, on average, 4.6 employees, compared with 5.3 employees a year earlier, according to Census Bureau data. That figure was 5.8 at the turn of the century and had been declining gradually until COVID-19 spurred a sharper drop.
The lower head counts also reflect more fundamental changes. The rise of remote work, the expansion of the gig economy and the proliferation of software tools all make it easier for entrepreneurs to operate with a leaner staff.
