'Risk-Averse Culture Affects U.S. Workers, Entrepreneurs'

[Dick Whitman]

WSJ piece today that feels like it could have been written by our own YankeeFan, who for years has been encouraging people on this site - with less-than-appreciative responses - to strike out on their own. The story also dove tails somewhat with some of our digressions around here on whether outsourcing, both geographic and technological, lead to new opportunities:

http://online.wSportsJournalists.com/article/SB10001424127887324031404578481162903760052.html

Fewer Americans are choosing that path. In 1982, new companies—those in business less than five years—made up roughly half of all U.S. businesses, according to census data. By 2011, they accounted for just over a third. Over the same period, the share of the labor force working at new companies fell to 11% from more than 20%.

 

[LongTimeListener]

Yes. Wal-Mart ruined Main Street. We have all known this for many years, regardless of what YF or the WSJ tries to dress up as some cultural deficiency or tax and regulatory hurdle.

And I don't mean to lay it all at Wal-Mart's feet. You could say it's based on Home Depot or Best Buy or Chili's or AMC or whatever bulk-buy, industrialized trend-setter exists in that particular brand. It isn't risk aversion. It's that the entire nature of the risk has changed. You can't beat those companies and their prices anymore. Just can't do it.

 

[The Big Ragu]

Yes. Wal-Mart ruined Main Street. We have all known this for many years, regardless of what YF or the WSJ tries to dress up as some cultural deficiency or tax and regulatory hurdle.

And I don't mean to lay it all at Wal-Mart's feet. You could say it's based on Home Depot or Best Buy or Chili's or AMC or whatever bulk-buy, industrialized trend-setter exists in that particular brand. It isn't risk aversion. It's that the entire nature of the risk has changed. You can't beat those companies and their prices anymore. Just can't do it.

I believe the story pointed out what you are saying is a trend.

One barrier for prospective entrepreneurs may be the growing dominance of large corporations in nearly every industry, which make it tough for new ventures to gain a foothold. A small bookstore no longer needs just a better selection or a friendlier staff than the crosstown competition—it also has to compete with national chains and, increasingly, such Internet retailers as Amazon.

For the first time since such records have been kept, the Census found in 2008 that more Americans worked for big businesses—those with at least 500 workers—than small ones. The trend has continued since.

The thing is, that story points to a trend and then lays out a laundry list of factors that may be contributing to it. That is likely a strong factor, but there are others, too -- many of which the story rolls through, also.

 

[Dick Whitman]

Yes. Wal-Mart ruined Main Street. We have all known this for many years, regardless of what YF or the WSJ tries to dress up as some cultural deficiency or tax and regulatory hurdle.

And I don't mean to lay it all at Wal-Mart's feet. You could say it's based on Home Depot or Best Buy or Chili's or AMC or whatever bulk-buy, industrialized trend-setter exists in that particular brand. It isn't risk aversion. It's that the entire nature of the risk has changed. You can't beat those companies and their prices anymore. Just can't do it.

I believe the story pointed out what you are saying is a trend.

One barrier for prospective entrepreneurs may be the growing dominance of large corporations in nearly every industry, which make it tough for new ventures to gain a foothold. A small bookstore no longer needs just a better selection or a friendlier staff than the crosstown competition—it also has to compete with national chains and, increasingly, such Internet retailers as Amazon.

For the first time since such records have been kept, the Census found in 2008 that more Americans worked for big businesses—those with at least 500 workers—than small ones. The trend has continued since.]One barrier for prospective entrepreneurs may be the growing dominance of large corporations in nearly every industry, which make it tough for new ventures to gain a foothold. A small bookstore no longer needs just a better selection or a friendlier staff than the crosstown competition—it also has to compete with national chains and, increasingly, such Internet retailers as Amazon.

For the first time since such records have been kept, the Census found in 2008 that more Americans worked for big businesses—those with at least 500 workers—than small ones. The trend has continued since.

The thing is, that story points to a trend and then lays out a laundry list of factors that may be contributing to it. That is likely a strong factor, but there are others, too -- many of which the story rolls through, also.

A trend story with actual evidence and data to back up the premise.

The WSJ's primary competitor notices this and thinks to itself: "Suckers!"

 

[User 11148]

Yes. Wal-Mart ruined Main Street. We have all known this for many years, regardless of what YF or the WSJ tries to dress up as some cultural deficiency or tax and regulatory hurdle.

And I don't mean to lay it all at Wal-Mart's feet. You could say it's based on Home Depot or Best Buy or Chili's or AMC or whatever bulk-buy, industrialized trend-setter exists in that particular brand. It isn't risk aversion. It's that the entire nature of the risk has changed. You can't beat those companies and their prices anymore. Just can't do it.

Main Street, as you're labeling it, is not where the disappearing act has been (per that WSJ story; I don't get that site on this computer). The Main Street to which you refer isn't (or wasn't) companies less than five years old, which is where (per the story) the "losses" have been.

My sense, based on my own experience, is that there are lots of demographic forces in play there. For starters, in 1982, the baby boomers were in their prime business-starting years, so there would have been a tendency simply for there to be more start-ups. Secondly -- and I think this dovetails with some of the demographics -- health insurance wasn't nearly such a big concern in 1982 as it is now. I don't recall my parents worrying too much about health insurance when they started their businesses (and before anybody starts, it wasn't because they were wealthy (or even comfortable), because they weren't). But by the time I was in my late 20s/early 30s (which would have been in the early 1990s), health insurance had become a major concern. I certainly would have been leery of starting a business, particularly if I already worked at a firm that offered health insurance.

 

[The Big Ragu]

****, Ben Casselman is the finest economics reporter out there. He's incredibly versatile, too. This kind of story is a throwaway for a guy like that.

He spent some time covering the oil and natural gas industries, and he killed it on the Journal's coverage of the oil rig disaster in the Gulf of Mexico a few years ago.

 

[LongTimeListener]

That is true, quant, and I've mentioned that many times (and even gotten YF to agree with me!). I've known many many people in my time who stayed put just for it. My dad branched out on his own in 1985 with five kids at home; we had pretty crappy insurance for a while but we had insurance. I don't think it would have been possible for him in today's world.

 

[Dick Whitman]

****, Ben Casselman is the finest economics reporter out there. He's incredibly versatile, too. This kind of story is a throwaway for a guy like that.

He spent some time covering the oil and natural gas industries, and he killed it on the Journal's coverage of the oil rig disaster in the Gulf of Mexico a few years ago.

I get both the NYT and the WSJ and, honestly: I'm starting to think the WSJ is the better newspaper right now. It isn't as big every day, and its international reporting probably lags a little behind. But as far as giving me something to read every day, and educating me on matters that actually have an effect on my everyday life and, on a grander scale, the direction of the country, the Journal is kicking its tail right now. They both wear their ideology on their sleeve, but other than Ms. Noonan, the WSJ even seems a little more measured and a little less bombastic/emotional when it comes to the op-ed pages.

 

[Captain Obvious]

Speaking of concerns such as health insurance, single-payer would do wonders for business and increase entrepreneurship. How many people would be willing to try making a go knowing they would still have coverage?

 

[User 11148]

Speaking of concerns such as health insurance, single-payer would do wonders for business and increase entrepreneurship. How many people would be willing to try making a go knowing they would still have coverage?

Single-payer would certainly make some concerns diminish, but that's not to say it wouldn't raise (and perhaps amplify) others. If you could really boil it down to a ceteris paribus case, it might be reasonable to conclude that greater entrepreneurship would follow, but doing so (boiling it down) would be nigh on impossible.

 

[Alma]

Speaking of concerns such as health insurance, single-payer would do wonders for business and increase entrepreneurship. How many people would be willing to try making a go knowing they would still have coverage?

Plenty.

But single payer is coming over the dead bodies of people you couldn't even begin to count. The US is a goldmine of research monies. And the hospitals, at this point, are often so elaborate and hotel-like that a single payer system would throw them in a kind of disrepair.

 

[Starman]

Just more of the Touchdown Dancers playing blame-the-victim, archly implying the plight of the unemployed and underemployed is due to the fact they're too chicken to pull themselves up by the BOOTSTRAPS!!! and of course the Successful People don't need to help them with stuff like health care since they didn't have the guts to help themselves.

Ignoring of course the fact that over the course of history the large majority of all startup businesses fail and have always failed, so if all these pansy-ass moochers got out and BOOTSTRAPPED!!! and took out loans to start their humm-dinger new businesses, most would have failed, so now we would be getting kvetching lectures about irresponsible unrealistic naifs defaulting on their business loans.

Except of course the people who could bum the money off their parents. They'd probably be doing fine.

 

[User 11148]

Just more of the Touchdown Dancers playing blame-the-victim, archly implying the plight of the unemployed and underemployed is due to the fact they're too chicken to pull themselves up by the BOOTSTRAPS!!! and of course the Successful People don't need to help them with stuff like health care since they didn't have the guts to help themselves.

Ignoring of course the fact that over the course of history the large majority of all startup businesses fail and have always failed, so if all these pansy-ass moochers got out and BOOTSTRAPPED!!! and took out loans to start their humm-dinger new businesses, most would have failed, so now we would be getting kvetching lectures about irresponsible unrealistic naifs defaulting on their business loans.

Except of course the people who could bum the money off their parents. They'd probably be doing fine.

LOL ... you have a gift, I gotta admit.