The US unemployment rate increased from 9.8% in September to 10.2% in October. Small businesses have led the turnaround in employment after economic downturns in the past, but that has not happened yet.
A survey by the National Federation of Independent Businesses reports that 19% of small firms, on a seasonally adjusted basis, reduced worker numbers by an average of 4.2 workers in the July, August, September period. Only 8% increased staff in that period, by an average of 3.5 for each business.
The Small Business Administration says that small firms, defined as under 20 staff, provide 25% of all jobs and contributed 40% of employment growth after the last recession.
The reasons that small businesses are not hiring aggressively are:
Credit restrictions - most do not have property to offer as security, which is generally required, with tightened borrowing conditions being applied by lenders.
Few small firms export – so the economic upturn internationally is not helping them.
Cost of health care – the cost for small businesses is substantially higher than for large firms. The healthcare bill which was passed by the House of Representatives provides a cap on costs and wider coverage, and if passed by the Senate will help with this problem for small US companies.
So although the recession is technically over, with the US economy returning to growth, the state of business for small firms is still difficult and they are not yet hiring in sufficient numbers to lower the unemployment rate.
We contribute to the success of small businesses by sending them qualified prospects from our Local Search facility in our US Business Directory with no cost to them. Most of the 10 million business listed in our directory are small businesses.
Monte Huebsch, CEO
A survey by the National Federation of Independent Businesses reports that 19% of small firms, on a seasonally adjusted basis, reduced worker numbers by an average of 4.2 workers in the July, August, September period. Only 8% increased staff in that period, by an average of 3.5 for each business.
The Small Business Administration says that small firms, defined as under 20 staff, provide 25% of all jobs and contributed 40% of employment growth after the last recession.
The reasons that small businesses are not hiring aggressively are:
Credit restrictions - most do not have property to offer as security, which is generally required, with tightened borrowing conditions being applied by lenders.
Few small firms export – so the economic upturn internationally is not helping them.
Cost of health care – the cost for small businesses is substantially higher than for large firms. The healthcare bill which was passed by the House of Representatives provides a cap on costs and wider coverage, and if passed by the Senate will help with this problem for small US companies.
So although the recession is technically over, with the US economy returning to growth, the state of business for small firms is still difficult and they are not yet hiring in sufficient numbers to lower the unemployment rate.
We contribute to the success of small businesses by sending them qualified prospects from our Local Search facility in our US Business Directory with no cost to them. Most of the 10 million business listed in our directory are small businesses.
Monte Huebsch, CEO
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