America's Disappearing Middle Class:
Perhaps nothing reflects the descent of the yeomanry than the fading role of the ten million small businesses with under 20 employees, which currently employ upwards of forty million Americans. Long a key source of new jobs, small business start-ups have declined as a portion of all business growth from 50 percent in the early 1980s to 35% in 2010. Indeed, a 2014 Brookings report, revealed that small business “dynamism”, measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century.
Instead of stemming from the grassroots, the recovery after the latest crash was led, unlike in previous expansions, by larger firms while small company hiring remained relatively paltry. Self-employment rose, but increasingly this took the form of sole proprietorships as opposed to expanding smaller companies with employees. By 2013, smaller firms with under one hundred employees added far fewer jobs than in the prior decade. Unlike prior post-war recoveries, since 2007, grassroots companies did not lead the way out of recession and continued to lose ground compared with larger companies that either could afford the costs or avoid the taxes imposed by, the Clerical regime.
