In recent decades, policy across the country case studies for business privileged the biggest corporations.
Start-Ups These studies find that as the economy has become dominated by fewer and larger companies, there’s been a sharp decline in the formation of new businesses. Inequality These studies find that the increasing size of corporations is driving inequality, while local and dispersed business ownership strengthens the middle class. Economic Returns These studies find that local businesses recirculate a greater share of every dollar in the local economy, as they create locally owned supply chains and invest in their employees. Jobs These studies show that locally owned businesses employ more people per unit of sales, and retain more employees during economic downturns, while big-box retailers decrease the number of retail jobs in a region.
Wages and Benefits These studies show that locally owned businesses are linked to higher income growth and lower levels of poverty, while big-box retailers, particularly Walmart, depress wages and benefits for retail employees. Studies in this section also quantify the costs of these big companies’ low wages to state healthcare programs and other forms of public assistance. Social and Civic Well-Being These studies find that a community’s level of social capital, civic engagement, and well-being is positively related to the share of its economy held by local businesses, while the presence of mega-retailers like Walmart undermines social capital and civic participation. Public Subsidies These studies document the massive public subsidies that overwhelmingly favor big businesses and have financed their expansion, and how this subsidized development has failed to produce real economic benefits for communities. They find that large retailers systemically tilt the playing field in their favor by skirting their tax obligations, as well as that locally owned enterprises generate more tax revenue for cities, with less cost, than sprawling big-box shopping centers.
Existing Businesses These studies demonstrate how big-box retailers have significant studies effects on the number and vitality of nearby local businesses, in that they both lead to a loss of existing businesses, and contrary to the claims big-box retailers themselves often make, do not serve as a catalyst for new growth. Prices Business studies find that chains are not always case bargain. Check out more of our work, and sign up for our monthly newsletter so that you don’t miss our latest research. START-UPS These studies find that as the economy has become dominated by fewer and larger companies, there’s been a sharp decline in the formation of new businesses that fuel economic growth. Declining Business Dynamism in the United For: A Look at States and Metros. Litan, The Brookings Institution, May 2014.
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Though start-ups occupy a large place in the U. This study from researchers at the Brookings Institution and Ennsyte Economics quantifies this decline, finding that during the three decades between 1978 and 2011, the share of firms less than one year old fell by nearly half. The Importance of Young Firms for Economic Growth. Jason Wiens and Chris Jackson, Entrepreneurship Policy Digest, Kauffman Foundation, Sept. This brief, which is a roundup of recent research, underlines the reasons why the decline in new business formation is so troubling.
As the authors explain, young firms are the major contributor of new jobs. 5 million jobs per year over the past three decades. INEQUALITY These studies find that the increasing size of corporations is driving inequality, while local and dispersed business ownership strengthens the middle class. Ouimet, and Elena Simintzi, LIS Working Paper 632, March 2015. This paper finds that much of the dramatic increase in income inequality over the last two decades may be owed to consolidation in the economy and the growing market power of a small number of very large firms. Large firms pay higher wages on average than small firms do, but there’s significant variation across different types of workers, the authors find.
Jason Furman and Peter Orszag, Oct. This paper explores the possibility that a major factor driving economic inequality is corporate consolidation — the growing market share of a few big companies. This is up significantly since the mid-1990s, when the most successful companies earned about three times the median return. ECONOMIC RETURNS These studies find that local businesses recirculate a greater share of every dollar in the local economy, as they create locally owned supply chains and invest in their employees. Commissioned by the British Columbia division of the Canadian Union of Public Employees, this study analyzes the economic impact and market share of the province’s independent retailers and restaurants. Going Local: Quantifying the Economic Impacts of Buying from Locally Owned Businesses in Portland, Maine. Garrett Martin and Amar Patel, Maine Center for Economic Policy, Dec.
On a dollar-for-dollar basis, the local economic impact of independently owned businesses is significantly greater than that of national chains, this study concludes. In contrast, the local retailers returned more than 32 percent of their revenue to the local economy. This study finds that San Francisco remains a stronghold for locally owned businesses, which generate sizable benefits for the city’s economy. The first calculates market shares for independents and chains in several categories: bookstores, sporting goods stores, toy stores, and casual dining restaurants. The Economic Impact of Locally Owned Businesses vs.
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