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Another Misunderstood Fact About the Job Market
Oct 18th
In a piece entitled, “What May be the Most Commonly Misunderstood Fact About the Job Market,” Jared Bernstein challenged a claim made on the Diane Rehm show by Brad Close, NFIB Vice President for Public Policy. Mr Close said that most Americans are employed in small businesses.
Mr. Bernstein is right that Mr. Close is wrong. Slightly more than half (50.6 percent) of the private sector labor force is employed in companies with fewer than 500 employees – the SBA’s definition of a small business. Moreover, if you include people who work outside the private sector, employment in companies with fewer than 500 employees was only 39 percent of the civilian labor force (and 41 percent of employed civilians) in 2008, the latest year for which the data on small business employment are available.
But, ironically, in correcting one error, Dr. Bernstein introduces another. In his post, Mr. Bernstein writes, “[R]esearch shows that it’s surviving startups that are particularly important in terms of generating new jobs.” That turns out not to be true.
As I wrote here last year, young companies are net job destroyers. As I explained in my earlier post, “The act of firm formation accounts for most of the net job creation in the economy. Separate out firm formation from the operation of young firms and one finds that young firms – those aged one to five – turn out to be net job destroyers. In fact, they destroy more net jobs than older firms.”
While the new-business-as-the-primary-source-of-net-job-creation argument may rest on a mathematical artifact – existing firms can create and destroy jobs, but new firms can only create them – the data still negate Dr. Bernstein’s argument that surviving start-ups are particularly important in creating jobs. Surviving young firms do not create enough jobs to make up for those lost by dying and shrinking young companies.
Moreover, the survivors weren’t even particularly potent job creators when they were first founded. As I have shown elsewhere, new businesses that die within five years create more jobs at founding than new businesses that survive five years.
The confusion about who creates jobs may be why Milton Friedman saw small business job creation statistics as among the biggest fallacies being portrayed as “facts” in economic policy discussions.
Another Misunderstood Fact About the Job Market
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You will be misunderstood
Dec 10th
If you want to drive yourself crazy, read the live twitter comments of an audience after you give a talk, even if it’s just to ten people.
You didn’t say what they said you said.
You didn’t mean what they said you meant.
Or read the comments on just about any blog post or video online. People who saw what you just saw or read what you just read completely misunderstood it. (Or else you did.)
We think direct written and verbal communication is clear and accurate and efficient. It is none of those. If the data rate of an HDMI cable is 340MHz, I’m guessing that the data rate of a speech is far, far lower. Yes, there’s a huge amount of information communicated via your affect, your style and your confidence, but no, I don’t think humans are so good at getting all the details.
Plan on being misunderstood. Repeat yourself. When in doubt, repeat yourself.
View full post on Seth’s Blog
Voting, misunderstood
Nov 1st
This year, fewer than 40% of voting age Americans will actually vote.
A serious glitch in self-marketing, I think.
If you don’t vote because you’re trying to teach politicians a lesson, you’re tragically misguided in your strategy. The very politicians you’re trying to send a message to don’t want you to vote. Since 1960, voting turnouts in mid-term elections are down significantly, and there’s one reason: because of TV advertising.
Political TV advertising is designed to do only one thing: suppress the turnout of the opponent’s supporters. If the TV ads can turn you off enough not to vote (”they’re all bums”) then their strategy has succeeded.
The astonishing thing is that voters haven’t figured this out. As the scumminess and nastiness of campaigning and governing has escalated and the flakiness of candidates appears to have escalated as well, we’ve largely abdicated the high ground and permitted selfish partisans on both sides to hijack the system.
Voting is free. It’s fairly fast. It doesn’t make you responsible for the outcome, but it sure has an impact on what we have to live with going forward. The only thing that would make it better is free snacks.
Even if you’re disgusted, vote. Vote for your least unfavorite choice. But go vote.
View full post on Seth’s Blog
Gifts, misunderstood
Jun 19th
What’s a gift?
I met a big-shot former Fortune 500 company CEO who explained to me that he used to have three secretaries. One for his calendar, one for his usual work, and one who did nothing but send people gifts.
I think when it’s sent by a corporation and chosen by a secretary, it’s not a gift. It’s a present. Or a favor…
A gift certificate from a rich uncle is a present as well, it’s not really a gift.
A favor is something we do for someone hoping for an equal or greater favor in return. (Hence the phrase, “return the favor.” No one says, “return the gift.”)
A present is something that costs money, sure, and it’s free, but I don’t think it’s a gift.
A gift costs the giver something real. It might be cash (enough that we feel the pinch) but more likely it involves a sacrifice or a risk or an emotional exposure. A true gift is a heartfelt connection, something that changes both the giver the recipient.
The Gift of the Magi is a great story because each person in the story sacrifices to create a heartfelt gift for the other person. And it’s gifts–gifts that touch us, gifts that change us–that are transforming the way we interact.
One or two readers asked me why my book Linchpin costs money. After all, they ask, if gifts are a cornerstone of the new era, why not give it away free, as a gift?
Free doesn’t make something a gift. Free might be a marketing strategy, free might make a generous present, but free doesn’t automatically make something a gift. Gil Scott Heron’s new album isn’t free, but it’s a gift. He’s exposing himself. Taking a risk. You listen to the album and you feel differently when you’re done… it’s not a product, it’s a very personal statement. Keller Williams approaches his entire craft as a chance to give gifts, but that doesn’t mean he can’t charge for some elements of his work. What it took him to create the music is so much greater than what it cost you to consume it that he is giving gifts without doubt.
The way I understand gifts is that the giver must make a sacrifice, create an uneven exchange, bring himself closer to the recipient, create change and do it all with the right spirit. To do anything less might be smart commerce, but it doesn’t rise to the magical level of the gift. A day’s work for a day’s pay is the win/lose mantra of the industrial era. More modern is to view a day’s work as a chance to generate gifts that last.
View full post on Seth’s Blog
Genius is misunderstood as a bolt of lightning
Mar 12th
Genius is the act of solving a problem in a way no one has solved it before. It has nothing to do with winning a Nobel prize in physics or certain levels of schooling. It’s about using human insight and initiative to find original solutions that matter.
Genius is actually the eventual public recognition of dozens (or hundreds) of failed attempts at solving a problem. Sometimes we fail in public, often we fail in private, but people who are doing creative work are constantly failing.
When the lizard brain kicks in and the resistance slows you down, the only correct response is to push back again and again and again with one failure after another. Sooner or later, the lizard will get bored and give up.
View full post on Seth’s Blog
