A National Tide of Small Business Job Creation and RI’s Low Entrepreneurship


Well, this looks like good news:

Job creation among small businesses broke the 45-year record in February with a net addition of 0.52 workers per firm, according to NFIB’s monthly jobs report, released today. The previous record was in May 1998 at 0.51 workers per firm. The percent of owners citing labor costs as their most important problem also hit an all-time high, with 10 percent of owners reporting labor costs as their biggest problem. …

“With the government shutdown behind us, the labor markets will get back to normal,” said NFIB Chief Economist Bill Dunkelberg. “However, it appears that the shortage of workers will continue to restrain Main Street growth. If businesses were fully staffed, more could be produced and sold. Owners are reporting increasing employment at their firms at the highest rates in survey history, now they just need workers to fill them.”

Unfortunately, the NFIB’s data doesn’t expand into state-level detail, but one suspects Rhode Island isn’t doing quite so well.  This suspicion isn’t only because Rhode Island is doing so poorly in the employment and jobs market generally.

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Available information has long laid bare Rhode Island’s difficulty with small businesses.  One indicator is that the Ocean State tends to have much lower rates of entrepreneurial activity than one would expect in an economy that is worse off than the average.  Similarly, evidence suggests that Rhode Islanders who start new establishments have difficulty keeping them going.

Newer data from the Kauffman Foundation reinforce my speculation in those other links.  Overall, Rhode Island has the worst entrepreneurial activity in the country — and it isn’t even close.  Notably, given my earlier theorizing, the Ocean State is also worst in the nation when it comes to entrepreneurs who start businesses because they have to do so in order to work, versus those who do so because they see opportunity.

Our bad economy forces Rhode Islanders to make their own work.  Then, when self-starters begin having to really follow the government’s rules because they’re expanding and hiring, the state causes them to flounder.  We can reasonably speculate, therefore, that the tides of record small-business job creation are thinner in the Ocean State.


Featured image: a visualization of the Kauffman Foundation’s Early-Stage Entrepreneurship Index for 2017.

  • ShannonEntropy

    RITaxpayer & DS Crockett are onto something that would turn around all of these “Rhody is worst place in the US for [fill in the blank]”. Namely: turn us into a tax haven by drastically reducing / eliminating the sales & income taxes. You would have so many entrepreneurs flocking here we would have to beat them off with a stick

    The benefits of being a tax haven are not just hypothetical. Take postage-stamp-sized nation & tax haven Monaco, which is surrounded by the high-tax nations of Italy & France

    Mrs Entropy & Yours Truly have been there, including to the famous casino in Monte Carlo, and lemme tell ya, you never saw so much wealth per square foot ever anywhere in your life. Monte Carlo makes Beverly Hills & Bel Air CA look like Snuffy Smith’s Hootin’ Holler

    So let’s make Li’l Rhody into the Monaco of ‘Merica and we’ll need to open a Brink’s Truck factory here to handle all the money imported or to be made here !!

    • Rhett Hardwick

      A tax haven sounds good to me. How about starting simple, like most Southern states, no tax on military pensions. How about an age cut off on income tax (might stem the flow to South Carolina and Florida)?

      • ShannonEntropy


        As the Russians say: The longest journey begins with a single steppe