How Important Are Small Businesses?

Summary

Small businesses are pivotal to the U.S. economy, with over 28 million employing 57 million workers. They are the primary job creators, generating nearly two-thirds of net new jobs between 1993 and 2013. However, they face challenges from high taxes and stringent regulations, which hinder growth and job creation. The Great Recession's aftermath has left small businesses struggling, reflected in a weak labor market with over 94 million Americans not working. To revitalize the economy, it's crucial to ease these burdens and support small business growth.

Takeaways

• 🏭 Small businesses are a vital part of the U.S. economy, with over 28 million small businesses employing 57 million workers.
• 👷‍♂️ These businesses are crucial job creators, responsible for nearly two-thirds of the net new jobs created between 1993 and 2013.
• 📈 In 2012 alone, small businesses generated more than 2.1 million net new jobs, highlighting their role in economic growth.
• 🌱 Small businesses are often in growth mode, seeking new markets and employees, unlike large businesses that tend to maintain their size.
• 🚫 High taxes and recent government regulations, particularly in health care, finance, and labor, disproportionately affect small businesses.
• 💼 Large corporations can more easily absorb the costs of compliance with regulations, giving them an advantage over smaller, newer businesses.
• 📉 The impact of these challenges is evident in the slow recovery of small businesses from the Great Recession and the weak labor market.
• 🔢 Over 94 million Americans are either not working or not actively seeking employment, indicating a significant portion of the population is not engaged in the labor force.
• 📊 The labor force participation rate is currently below 63 percent, which is the lowest it's been since the late 1970s.
• 🔄 To revitalize small businesses and the job market, it's suggested that job-killing taxes and regulations should be reduced or eliminated.
• 💼 Encouraging job creators to hire more employees is key to boosting the economy and providing career opportunities for millions.

Q & A

How many small businesses are there in the United States?

There are more than 28 million small businesses in the United States.

What is the employment impact of small businesses in the U.S.?

Small businesses employ 57 million workers in the United States.

What is the combined community size of small business owners and employees in America?

When owners and employees are added together, the small business community comprises roughly 85 million Americans.

What role do small businesses play in job creation in the U.S.?

Small businesses are the most important job creators in America, accounting for almost two-thirds of the net new jobs created between 1993 and 2013.

How many new career opportunities were created by small businesses between 1993 and 2013?

Small businesses created a total of 11.8 million new career opportunities between 1993 and 2013.

In what year did small businesses create more than 2.1 million net new jobs?

Small businesses created more than 2.1 million net new jobs in 2012.

Why are small businesses considered the main job creators in the country?

Small businesses are the main job creators because they are often growing and looking for new markets to expand, requiring additional employees.

How do large businesses typically manage their workforce compared to small businesses?

Large businesses generally stay the same size, hiring new employees to replace those who depart, rather than expanding their workforce.

What challenges do small businesses face that hinder their growth and job creation?

Small businesses face challenges such as high taxes and recent government regulations in areas like health care, finance, and labor, which disproportionately hurt them and prevent growth and job addition.

How do the financial capabilities of large businesses compare to small businesses in terms of compliance with regulations?

Large businesses with big profits can afford to comply with regulations, unlike small businesses that are just starting out and may struggle with the costs of compliance.

What is the current state of the labor force participation rate in the U.S.?

The labor force participation rate in the U.S. is less than 63 percent, the lowest figure since the late 1970s.

What measures are suggested to help small businesses recover and strengthen the job market?

To help small businesses recover and strengthen the job market, it is suggested that job-killing taxes and regulations be rolled back, and job creators be encouraged to hire more employees.

Outlines

00:00

🏭 The Vital Role of Small Businesses in the U.S. Economy

Small businesses are the backbone of the U.S. economy, with over 28 million small businesses employing 57 million workers. These businesses, along with their owners, form a community of approximately 85 million Americans. They are responsible for nearly two-thirds of the net new jobs created between 1993 and 2013, totaling 11.8 million new career opportunities. In 2012 alone, small businesses generated over 2.1 million net new jobs. Unlike large businesses, small businesses are often expanding and seeking new markets, which necessitates hiring additional employees. However, they face challenges from high taxes and government regulations in areas such as healthcare, finance, and labor, which can hinder their growth and job creation. Despite the economic downturn, small businesses are crucial for the labor market, with over 94 million Americans not currently working or seeking employment. The labor force participation rate is at a historic low, underlining the importance of supporting small businesses to strengthen the job market.

Keywords

💡Small businesses

Small businesses are independently owned and operated companies that are smaller in size compared to large corporations. They play a crucial role in the U.S. economy, as they are the backbone of job creation and economic growth. In the script, it is mentioned that America is home to over 28 million small businesses that employ 57 million workers, indicating their significant impact on the workforce and the economy.

💡Job creators

Job creators refer to individuals or entities that establish new businesses or expand existing ones, thereby generating employment opportunities. In the context of the video, small business owners are highlighted as America's most important job creators, having accounted for almost two-thirds of the net new jobs created between 1993 and 2013.

💡Net new jobs

Net new jobs represent the difference between the number of jobs created and the number of jobs lost over a specific period. The video emphasizes that U.S. small businesses created a significant number of net new jobs, with a total of 11.8 million new career opportunities between 1993 and 2013, showcasing their contribution to employment growth.

💡Economic engine

The term 'economic engine' is used to describe the driving force behind economic activity and growth. In the script, small businesses are referred to as the 'engine of the U.S. economy,' highlighting their central role in fostering economic vitality and innovation.

💡Regulations

Regulations are rules or directives issued by the government that businesses must follow. The video discusses how recent government regulations, particularly in areas like health care, finance, and labor, can disproportionately affect small businesses, making it difficult for them to grow and create new jobs.

💡Great Recession

The Great Recession refers to a severe worldwide economic downturn that lasted from 2007 to 2009. The script mentions that small businesses have not fully recovered from the impacts of the Great Recession, which is evident in the weak labor market and high numbers of Americans not working or actively seeking employment.

💡Labor force participation rate

The labor force participation rate is the percentage of the working-age population that is either employed or actively looking for work. The video points out that this rate is less than 63 percent, the lowest since the late 1970s, indicating a potential issue with the job market and the economy.

💡Red tape

Red tape refers to excessive bureaucratic procedures or regulations that can hinder or slow down business activities. The script uses the term to describe how large businesses can afford to comply with such regulations, while small businesses, which are just starting out, often struggle with the financial and administrative burdens.

💡Career opportunities

Career opportunities refer to the chances for individuals to find employment or advance in their professional lives. The video emphasizes the importance of small businesses in creating new career opportunities, with a focus on the need for policies that encourage hiring rather than reducing job prospects.

💡InformationStation.org

InformationStation.org is mentioned in the script as a resource for more information about small businesses. It suggests that there is a need for further education and awareness about the importance of small businesses in the economy, and this website serves as a platform for such information dissemination.

Highlights

Small businesses are the engine of the U.S. economy.

America is home to more than 28 million small businesses.

Small businesses employ 57 million workers.

The community of small business owners and employees is roughly 85 million strong.

Small business owners are America’s most important job creators.

Small businesses accounted for almost two-thirds of net new jobs created between 1993 and 2013.

A total of 11.8 million new career opportunities were created by small businesses during that period.

In 2012, small businesses created more than 2.1 million net new jobs.

Small businesses are the main job creators due to their growth and market expansion needs.

Large businesses generally stay the same size, hiring to replace departing employees.

High taxes and recent government regulations disproportionately hurt small businesses.

Small businesses struggle to comply with regulations that large businesses can afford.

Small businesses have not fully recovered from the Great Recession, affecting the labor market.

Over 94 million Americans are not working or actively seeking employment.

The labor force participation rate is less than 63 percent, the lowest since the late 1970s.

To strengthen the job market, job-killing taxes and regulations must be reduced.

Encouraging job creators to hire more employees is crucial for economic recovery.

85 million people are dependent on the success of small businesses, making them too big to fail.

For more information, visit InformationStation.org.

Transcripts

We hear a lot about large companies in the news,

but small business is the engine of the U.S. economy.

America is home to more than 28 million small businesses

that employ 57 million workers.

And when you add owners and employees together,

that’s a community of roughly 85 million hardworking Americans

dependent on the success of small business—

most of the private-sector workforce.

Small business owners are America’s most important job creators:

U.S. small businesses accounted for almost two-thirds of the net new jobs

created between 1993 and 2013—

a grand total of 11.8 million new career opportunities.

In 2012, small businesses created more than 2.1 million net new jobs.

Small businesses are the country’s main job creators,

because they are often growing and looking for new markets to expand.

To do so, they need additional employees along the way.

Large businesses, on the other hand, generally stay the same size,

hiring new employees to replace departing ones.

Unfortunately, high taxes and recent government regulations

in health care, finance, and labor disproportionately hurt small businesses

and prevent them from growing and adding new jobs to the economy.

Big business with big profits can afford to comply with red tape

in a way that small businesses just starting out cannot.

As a result, small businesses still haven’t recovered completely from the Great Recession—

and it shows by the chronically weak labor market.

More than 94 million Americans are not working or actively looking for jobs.

The labor force participation rate—

which measures the percentage of employees and job-seekers in the U.S.—

is less than 63 percent, the lowest figure since the late 1970s.

To bring small businesses back, and strengthen the job market,

job-killing taxes and regulations must be rolled back.

Job creators should be encouraged to hire more employees,

not forced to reduce career opportunities.

With 85 million people depending on the success of small business,

it’s easy to see why small business is too big to fail.

For more information about small businesses,

visit InformationStation.org.