Small Business Unemployment on the Rise
With unemployment at a 26 year high at 10.2%, its no wonder that DC movers and shakers are starting to focus more attention on small business owners.
Statistics supplied by ADP (and reported by CNN) show that small businesses (businesses with less than 50 employees) cut 68,000 jobs in the last quarter of 2oo9. A huge portion of the total 5.3 million jobs lost this year alone was due to the 2 million jobs lost in small business.
With challenges such as small business loans drying up, SBA subsidies running out, and other small business financial institutions going bankrupt, it will be harder to recover those lost jobs. In fact, large banks have axed close to $10 billion dollars in small business lending.
I guess it takes staggering numbers like those to attract the attention of the powers at be. President Obama has finally addressed the issue in a statement implying that “If you are a big corporation right now, the credit market is really working for you and the low interest rate can help you retain jobs.” However if your name is “Small Business USA” you have to do a lot better to get a loan. It is nothing short of writing off your first born in order to get a business loan from most major banks, and a miracle at least if you deal with small local banks – my choice anyhow for what is worth it.
I tend to believe that the banks of America as well as the well dressed crowd on Capitol Hill need to be reminded again that the backbone of this country is still the Small Businesses. Their growth is the growth of our economy as we together hire more than any of the fortune 500 companies, pay more taxes than they do and create a much bigger demand than they do. Without growth in this sector the burden of employment gets put solely on the large corporation which as is are inefficient, poor managed and too large to handle quick economic downturns.
Assume that the Small Business sector is flourishing and that each business hires in average 20-30 people. A company this size can swiftly adapt to market conditions, demand and supply shifts, taxation and legislation. So it makes all the sense in the world that to control unemployment is to nourish the small entrepreneur – which in most cases has a more humane work schedule and compensation package.
Even Treasury Secretary Timothy Geithner has acknowledged that without credit for small businesses, they simply can not grow. CNN quotes him as saying, “No jobs without growth. No growth without credit.”
So here’s another wake up call Mr. Washington DC, stop messing with bills of minimal importance – such as the newly approved airport in some 3000 people town of Tennessee costing us 1.3 billion dollars and bringing 10 jobs – and address the real elephant in the room! The state of our Small Businesses.
