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Friday, December 02, 2016

Data on the percentage changes number of firms, employees, total payroll, and payroll per employee, by state, 2010-2014

A comment I read recently to a Facebook post commented on the large number of business failures that had occurred in California.  Now, the raw number of business failures is not exactly an interesting piece of information.  California had the largest number of firms in 2010 and in 2014 (690,000 and 725,000); it could easily have had the largest number of business failures and the smallest percentage of businesses that failed, simultaneously.  What is more interesting, I think, is to look at the data on the percentage changes in the number of businesses, in employment, and in payroll, by state.  Here. I’m using data for 2010 and 2014.1

First, for the US as a whole, the number of firms grew by 1,6% between 2010 and 2014, which is not a particularly exciting rate of growth.  Employment in these firms grew by 8.1%, which is about 2% per year, reasonable but not extraordinarily rapidly.  Total payroll grew by 20.2%, and payroll per employee by 11.9% (payroll per worker grew by about 2.7% per year, on average). 

For the most part, this is just a data dump.

Growth in the number of firms

Which states experienced the fastest (slowest) growth in the number of firms?

The five states with the fastest growth in the number of firms were (2010 rank in # of firms in parentheses)
North Dakota (48), +11.8% over the 4 years
Texas (4), +6.4%
Utah (33), 6.2%
Florida (3), 5.9%
California (1), 4.9%

Three of the fastest growing states were also in the top five states in number of firms in 2010.  Only one was a conspicuously small state.  (As already noted, the US average was 1.6%.)

The five states in which the number of firms contracted most rapidly (again, 2010 rank in parentheses)
New Mexico (38), -2.7%
Vermont (47), -2.7%
Mississippi (35), -2.9%
Alabama (26), -3.1%
West Virginia (42), -5.8%

All five of these stated ranked in the bottom half of the country in number of firms in 2010, and two were in the bottom 10.

Growth in Employment

The five fastest growing states in terms of employment were
North Dakota (48), +22.4%
Texas (4); 12.9%
Utah (33), 12.4%
Florida (3) 12.43%
Colorado (16), 11.6%

(California ranked 7th.  The US average was 8.1%.)

The slowest growth in employment also looks a lot like the slowest growth in the number of firms:
Maine(39), 2.4%
Alabama (26), 2.3%
New Mexico (38), 0.4%
Hew Hampshire (41), 0.1%
Vermont (47), -1.2%

(West Virginia had the 6th slowest growth in employment (2.6%).

Growth in Payroll

North Dakota certainly has had a very good few years:
North Dakota (48), 64.7%
Texas (4), 29.7%
Washington (13 ), 26.8%
Oklahoma (28), 26.2%
Utah (33), 26.0%

(Colorado ranked 6th and California ranked 7th.  Florida ranked 11th.  The US average was 11.2%.)

The five states with the slowest growth in payroll:
Alabama (26), 11.9%
New Hampshire (41), 11.2%
New Mexico (38), 10.8%
Connecticut (27), 9.9$
Vermont (47), 9.4%

West Virginia had the 9th slowest growth in payroll; Maine had the 6th slowest growth.)

Payroll per Worker

This measure has a greater representation of small states, and of places in which employment did not necessarily grow all that rapidly; 4 of the 5, though, have significant energy sectors.  But North Dakota once again leads the pack:
North Dakota (48), 7.7%
Washington (13), 3.9%
Montana (40), 3.8%
Wyoming (49), 3.6%
Oklahoma  (28), 3.6%

(California ranked 10th, Colorado 15th.  The US average was 2.7%.


1. Data for 2010 can be found at
Data for 2014 can be found at


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