Small businesses really took it in the shorts during the Great Recession. Companies with fewer than 100 employees accounted for 95.6 percent of the overall job decline in the period from 2007 to 2009, according to a new report.
When you add in companies with up to 500 employees, total job loss at small- and mid-size businesses accounted for 99.6 percent of the national job loss of 6.1 million jobs, according to a report by Raymond J. Keating, chief economist of the Small Business & Entrepreneurship Council (SBE Council), a nonpartisan advocacy organization.
This is a major ding to the overall U.S. employment picture. Small businesses account for 99.7 percent of all employer firms, according to the Small Business Administration , and represent half of all private sector workers and have generated 65 percent of net new jobs over the past 17 years.
The pain, though, was not distributed evenly across the United States. In his report, Keating noted that the states performing least poorly during 2007 through 2009 were Alaska, South Dakota, Louisiana, North Dakota, Wyoming, Oklahoma and Nebraska, along with the special case of the Washington, D.C., which actually posted a net plus in total small businesses.
The very worst performers for jobs were Florida, Indiana, Ohio, Michigan, Georgia, Arizona, California, North Carolina, Nevada and New Jersey.
"While broad factors, including misguided federal public policies, the housing/credit mess, and troubles in the auto industry, dragged down the entire economy, the effects varied by state," Keating said in a statement. "And pro-growth policy environments certainly helped ease problems in some states. Indeed, given the different makeup and policy climates state by state, it is not surprising that state economies vary in performance. What's striking about the 2008-09 recession, however, is just how sweeping and deep it was across the entire nation, as reflected in wide declines in the number of business establishments and employment."