Want Job Creation? Look to Microbusinesses, not just Detroit

The smallest of businesses contribute as many jobs as the big businesses.

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Dawn Rivers Baker
Dawn Rivers Baker
According to the Bureau of Labor Statistics, microbusiness employers created a slight share of total new jobs and cut about the same share of total jobs lost as firms with more than 1,000 employees during the first quarter of this year. In other words, these two firm size classes had approximately the same impact on the labor market for the quarter.

Stop and think about that for a minute.

Job creation is one of the holy grails of the economy. That's a big piece of the reason why your government is spending tens of billions of dollars in bailouts of private-sector companies these days. They believe that creating and retaining jobs is one of the most important side effects of economic growth.

You will note that the firms begging for bailouts are uniformly members of that very large business club, firms with more than 1,000 employees.

Lawmakers don't want those big firms to go under and put all those voters . . . I mean, employees, out of work. After all, those large employers can have quite an impact on the labor market.

As we have seen, growing microbusinesses can have essentially the same impact on the labor market. Even better, they can do so without costing anything close to $25 billion.

Unfortunately, it seems that nobody has noticed.

Dawn Rivers Baker is the award-winning journalist behind The MicroEnterprise Journal, the online business news weekly that covers politics and policy, the economy, and research for and about microbusinesses. Baker also blogs at The Journal Blog.

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