Make us your home page
Instagram

PolitiFact.com | Tampa Bay Times

Senator's claim that U.S. business closures topped starts is unsupported

WASHINGTON, DC - JULY 07:  U.S. Sen. David Perdue (R-GA) (C) questions witnesses from the Agriculture Department during a hearing about the impact of the highly pathogenic avian influenza on the U.S. poultry sector with Sen. Thom Tillis (R-NC) (R) and Sen. Joni Ernst (R-IA) July 7, 2015 in Washington, DC. Fifteen states had confirmed cases of three different strains of highly pathogenic avian influenza (HPAI) in domesticated birds since December of 2014. More than 33 million birds have been euthanized in affected flocks in the nation's worst outbreak.  (Photo by Chip Somodevilla/Getty Images)

WASHINGTON, DC - JULY 07: U.S. Sen. David Perdue (R-GA) (C) questions witnesses from the Agriculture Department during a hearing about the impact of the highly pathogenic avian influenza on the U.S. poultry sector with Sen. Thom Tillis (R-NC) (R) and Sen. Joni Ernst (R-IA) July 7, 2015 in Washington, DC. Fifteen states had confirmed cases of three different strains of highly pathogenic avian influenza (HPAI) in domesticated birds since December of 2014. More than 33 million birds have been euthanized in affected flocks in the nation's worst outbreak. (Photo by Chip Somodevilla/Getty Images)

The statement

"More businesses went out of business last year than were started for the first time in our history."

Sen. David Perdue, R-Ga., June 2, on NBC's Meet the Press Daily

The ruling

Some Republicans might have misgivings about Donald Trump as the Republican nominee, but Sen. David Perdue, R-Ga., isn't one of them. Perdue told NBC News that Trump has what the country needs.

"We have the lowest worker participation rate since 1978," Perdue told host Chuck Todd on Meet the Press Daily. "Poverty rate hasn't changed. More businesses went out of business last year than were started for the first time in our history, Chuck. This is an economic fiscal policy that is failing, and I believe this guy (Trump) will absolutely set us in the right direction to change that."

We wanted to look at that statement about more businesses closing than opening last year.

Perdue communications director Megan Whittemore sent us charts of business births and deaths posted by Gallup and the Brookings Institution, but neither had numbers beyond 2011. Whittemore said, "The trend is still downward of where it should be, and that's the point the senator is making."

But Perdue said the number of deaths exceeded the number of births, not that growth was lackluster or some variation of that theme. And the data after 2011 paint a different picture from what Perdue presented.

The U.S. Census Bureau collects data on new businesses forming and businesses closing as part of a project called Business Dynamics Statistics.

The Census data undercut Perdue's claim in several ways.

1. The numbers only go back to 1977. Perdue said, "More businesses went out of business last year than were started for the first time in our history."

No one has exact figures on what happened before 1977. But it is likely that in the depths of the Great Depression during the 1930s, more firms folded than were created.

2. The figures for "last year" — 2015 — aren't available. They're not available for 2014, either.

3. The limited data do show a few years when more businesses were closing than opening, but not for the most recent years.

In 1981, the country lost about 31,000 more businesses than were created. That trend reversed in 1982 and stayed that way until 2009. That year, and in 2010, more businesses closed than opened.

That flipped again the following year. In 2011, the country saw a tiny gain of about 6,000 businesses. That was followed by net gains of about 40,000 in 2012 and nearly 70,000 in 2013.

Ian Hathaway, a Brookings Institution nonresident senior fellow who has studied patterns of business openings and closings, said Perdue's statement is incorrect.

"He is making a stale statement," Hathaway said.

We rate this claim False.

Edited for print. Read the full version at PolitiFact.com.

Senator's claim that U.S. business closures topped starts is unsupported 06/10/16 [Last modified: Friday, June 10, 2016 6:51pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Target Corp. reaches $18.5 million settlement with 47 states over data breach

    Retail

    NEW YORK — Target Corp. has reached an $18.5 million settlement over a massive data breach that occurred before Christmas in 2013.

    Forty-seven states and the District of Columbia have reached an $18.5 million settlement with Target Corp. to resolve the states' probe into the discounter's massive pre-Christmas data breach in 2013. 
[Associated Press]
  2. John Morgan 'prepared to invest $100M' in medical marijuana

    State Roundup

    John Morgan spent nearly $7 million pushing two statewide ballot initiatives to expand medical marijuana throughout the state of Florida.

    Personal injury lawyer John Morgan says he's ready to invest $100 million in medical marijuana. [SCOTT KEELER | Tampa Bay Times]
  3. Google tracking real-world sales as well as online ads

    Business

    SAN FRANCISCO — Google already monitors your online shopping — but now it's also keeping an eye on what you're buying in real-world stores as part of its latest effort to sell more digital advertising.

     Google already monitors your online shopping - but now it's also keeping an eye on what you're buying in real-world stores as part of its latest effort to sell more digital advertising. 
[Associated Press]

  4. Labor Department green-lights retirement savings rule

    Personal Finance

    WASHINGTON — A Labor Department rule that would set higher standards for the advice brokers give to retirement savers will go into effect June 9 without further delay, Labor Secretary Alexander Acosta said Monday.

  5. Report: CEOs got biggest raise since 2013 with Charter Communications CEO on top

    Corporate

    NEW YORK — The typical CEO at the biggest U.S. companies got an 8.5 percent raise last year, raking in $11.5 million in salary, stock and other compensation last year, according to a study by executive data firm Equilar for The Associated Press. That's the biggest raise in three years.

    Charter Communications CEO Thomas Rutledge -- whose company took over Bright House Networks last year -- was the highest paid CEO in 2016, according to a study carried out by executive compensation data firm Equilar and The Associated Press. 
[Associated Press file photo]