The Mayor's Business Task Force was comprised of a handful of small business owners and a few nondescripts who by no means are local shakers & movers in any sense of the word. The Mayor's effort is simply to appease a group of well known whiners and incompetents.
I'm assuming you read the Mayor's report. So how's his Ma & Pa's Economic Recovery Act gonna boost clown town outta 20 years of economic doldrums?
Simply put - it can't.
Here's the crux. According a 2009 study (Who Creates Jobs Small vs. Large vs. Young) the only businesses that are in the position to help Wusta grow economically are the existing large ones - insurance, educational, and medical. So what does that mean for Wusta's future? Well, it ain't a pretty picture considering taxpaying entities are outnumbered 2:1 in revenues.
Newsweek reports: The work the first to track employment by age and size of the hiring company—found that small, mature firms (those with fewer than 500 employees and at least 10 years in operation) are actually net drags on job growth. On average, between 1992 and 2005, they destroyed more salaries than they created. In 2005, for example, small businesses lost about a million jobs, even as the overall economy expanded by about 2.5 million. Startups accounted for nearly all the growth. His [Haltiwanger et al] research suggests that the policy focus should skew young, nurturing the next big firms—which actually employ the most people—rather than tending an old crop of small ones.
The source: Who Creates Jobs Small vs. Large vs. Young by Haltiwanger, Jarmin, Miranda.
Abstract: There’s been a long, sometimes heated, debate on the role of firm size in employment
growth. Despite skepticism in the academic community, the notion that growth is negatively
related to firm size remains appealing to policymakers and small business advocates. Basically, they argue that small firms grow faster than larger firms and are more important as a source of job creation. In this paper, we provide a more nuanced perspective on this debate. Using data from the Census Bureau Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues regarding the role of firm size and growth that have been at the core of this ongoing debate (such as the role of regression to the mean). We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age there is no systematic relationship between firm size and growth. Indeed, once we control for firm age, we find that firms with between 5 and 499 employees have lower net growth rates than the largest firms (10,000 or more workers) in the economy. Our findings highlight the important role of business startups and young businesses in U.S. job creation. Business startups contribute substantially to both gross and net job creation.
In addition, we find an “up or out” dynamic of young (and small businesses). These findings
imply that it is critical to control for and understand the role of firm age in explaining U.S. job
creation.
If you're confused by that. Try Economist'sview.com synopsis.
