I know I have heard during most of my adult life that mom and pop businesses are the backbone of our economy. Every president during the past 50 years or so have always stated this as being a fact, including our current President. In a recent speech President Obama made a statement that he supported ‘the little guy’ and credited the small businesses owner with the majority of U.S. growth.
Over at Newsweek they are refuting this myth and have stated the following:
There’s just one problem: it isn’t true, according to a new study published by the National Bureau of Economic Research. The work—the first to track employment by age and size of the hiring company—found that small, mature firms (those with fewer than 500 employees and at least 10 years in operation) are actually net drags on job growth. On average, between 1992 and 2005, they destroyed more salaries than they created. In 2005, for example, small businesses lost about a million jobs, even as the overall economy expanded by about 2.5 million. Start-ups accounted for nearly all the growth.
I am not sure how accurate this information is nor whether it is true or false. One would hope that small businesses would be an asset to our country and not a drain on it. It would also seem to me that with most of our large companies having moved to China, that we would be relying more on small businesses to employ our own workers. Just my two cents.
What do you think? Share your thoughts with us.