April 27, 2022
C-Suite Wednesday – Two-Thirds of New Jobs are Created by Small Businesses
“The COVID-19 pandemic brought economic recession and the most severe decline in employment since the Great Depression,” writes Daniel Wilmoth. The SBA Office of Advocacy released a new report about small business job creation and losses throughout the pandemic using data from the Business Employment Dynamics data series by the Bureau of Labor Statistics.
Here are the statistics:
• In the first two quarters of 2020, small business employment declined by more than 9 million.
• In the second quarter of 2020, the 8.6 million net job loss was the biggest quarterly loss since the beginning of the data series in 1992.
• Inversely, the four quarters following the recession had the highest growth of the data series, totaling 5.5 million jobs. This offset 60% of the job loss that occurred.
• During the second quarter of 2021, small business employment grew by nearly a million (939,000).
• While big business suffered similar losses in employment, their recovery was more limited than smaller businesses’ recovery.
• Employment by large businesses declined by 6.8 million during the first two quarters of 2020.
• In the four quarters following the recession, large businesses only gained 3.1 million in employment, not even offsetting half of the original employment loss.
• Small businesses account for 2 out of every 3 jobs added in the last 25 years.
• During the 25-year period, big businesses produced 6.7 million net new jobs while small businesses generated 12.9 million net new jobs.