In a recent conversation with my predecessor, former Denton Publications’ Publisher Bill Denton, we compared the differences of operating a private sector company in his era (1960 through the late ’80s) compared to today. Small business was once thought of as the backbone of the country. Nothing could compare to hanging out your own shingle, creating a product or providing a unique and valuable service. One poured their heart, cash, time and that of their family’s, while taking great risk on the American free enterprise system as a way of creating a better life for themselves and generations to come.
But that dream may be slipping away. Small businesses now employ 44 percent of the private sector jobs, but over the past couple of decades, they have generated 65 percent of all new jobs. According to the Brookings Institution, the number of startups have fallen more than 23 percent from its height in 2006. In recent years, business bankruptcy rates more than doubled, most of which were small businesses, defined as companies employing less then 500 people.
Between 1950 and 1980, the average compensation in the public and private sectors moved in lockstep. But after 1980, public sector compensation growth began to outpace private sector compensation growth, and by the mid-1990s public sector workers had a substantial pay advantage. In the boom years of the late-1990s, private sector workers closed the gap a bit, but public sector pay moved ahead again in the 2000s.
Today, with benefits, job security and the opportunities for advancement, government has become the clear choice when seeking a career. From personal experience over the years, we lose more employees to government jobs than to other private sector employers and when given the choice between what we can afford to pay, plus benefits and days off, a private sector job pales in comparison to working in the public sector.
Dan Alexander is associate publisher of New Market Press and publisher and CEO of Denton Publications. He may be reached at email@example.com or firstname.lastname@example.org.