the survey. education debt - to - income ratio is calculated based on what scf respondents reported as their usual income. numbers are for families with education debt. bis central bankers ’ speeches opportunities to build wealth through business ownership for many people, the opportunity to build a business has long been an important part of the american dream. in addition to housing and financial assets, the scf shows that ownership of private businesses is a significant source of wealth and can be a vital source of opportunity for many households to improve their economic circumstances and position in the wealth distribution. while business wealth is highly concentrated at the top of the distribution, it also represents a significant component of wealth for some other households. 36 figure 11 shows that slightly more than half of the top 5 percent of households have a share in a private business. the average value of these holdings is nearly $ 4 million. only 14 percent of families in the next 45 have ownership in a private business, but for those that do, this type of wealth constitutes a substantial portion of their assets – the average amount of this business equity is nearly $ 200, 000, representing more than one - third of their net worth. only 3 percent of the bottom half of households hold equity in a private business, but it is a big share of wealth for those few. 37 the average amount of this wealth is close to $ 20, 000, 60 percent of the average net worth for these households. 38 owning a business is risky, and most new businesses close within a few years. but research shows that business ownership is associated with higher levels of economic mobility. 39 however, it appears that it has become harder to start and build businesses. the pace of new business creation has gradually declined over the past couple of decades, and the number of new firms declined sharply from 2006 through 2009. 40 the latest scf shows that the percentage of the next 45 that own a business has fallen to a 25 - year low, and equity in those businesses, adjusted for inflation, is at its lowest point since the mid - 1990s. one reason to be concerned about the apparent decline in new business formation is that it may serve to depress the pace of productivity, real wage growth, and employment. 41 another reason is that a slowdown in business formation may threaten what i believe likely has been a significant source of economic opportunity for many families below the very top in income and wealth. the scf does not ask households whether they started businesses that closed, so reported business ownership and wealth

provide nearly comparable pay most often depends on the general knowledge of the worker and the ability of that individual to learn new skills. even in the best of circumstances, discharged workers experience some loss of income in a transition to a new job and the associated new skills. indeed, finding a new job takes time, and typically results in at least a temporary drop in pay. that loss, especially in a soft labor market, is not only a short - term drag on aggregate incomes but also a source of stress on the affected individuals. generic capabilities in mathematics, writing, and verbal skills are key to the ability to learn and to apply new skills and thus to earn higher real wages over time. the avenues to acquiring those skills are many, and one effective tool that we have developed to facilitate the transition to a new job or profession has been our community colleges. these two - year institutions have been in the forefront of teaching the types of skills that build on workers ’ previous experiences to create new job skills. currently almost one in three of their enrollees are aged thirty or older, a statistic that suggests that these individuals have previous job experience. the impressive expansion of these learning centers attests to their success in imparting both general and practical job - related learning. a rising proportion of the population is also taking advantage of both general adult education and work - related instruction. the fact that, over the years, more than 94 percent of the workforce has been employed, on average, indicates that u. s. workers apparently have been sufficiently skilled and motivated to learn the new tasks that enable them to earn, on average, an ever - rising real wage. the never - ending necessity to learn new skills is due to the gradually but inexorably changing nature of our economy. the innovations that have so accelerated productivity in recent years are an extension of a longer - term, ever - growing conceptualization of economic output. the value added to our gdp from physical material input and manual labor has grown very slowly over the decades. 1 by far, the greatest contribution during the past half century to our average annual real gdp increase of 3 - 1 / 4 percent has been the ideas embodied in both our human and physical capital. technological advance is continually altering the shape, nature, and complexity of our economic processes. this rising complexity has required the labor force to be more and more technically oriented. years of schooling, a rough proxy for skills, averaged nine and one - quarter years in 1950. a half century