Good News in the Profiles: States Show Private Sector Job Gains Beginning in 2010
Once again, Advocacy’s state Small Business Profiles tell a story about where we have been going over the past couple of years. The news about employment change going forward is positive: the United States as a whole and nearly all of the states are beginning to show net private sector job gains rather than losses, as had occurred almost universally in 2009. Even states where employment change in 2010 remained negative were far closer to positive territory than in the previous difficult year.
Table 2 of the U.S. profile, combined with a look at Table A.10 on pp. 126-127 of The Small Business Economy, 2010, shows that 2008-2009 was the first period since 1990-1991 in which job creation in small firms (those with fewer than 500 employees) was not considerably better compared with large firms (500 or employees). That 1991-2008 period represents a 17-year track record of significant outperformance by the smalls in the net job race. But in 2008-2009, according to the Census Bureau (Table 2 of the state profiles), small businesses lost 3.28 million jobs on net, compared with a net loss of almost as many, 3.10 million, in large businesses. It was a bad year for everyone.
The good news in the data, if you look at the Bureau of Labor Statistics numbers in this year’s U.S. profile, Table 3, is that the trend has shifted to positive gains of 1.13 million net new jobs in 2010, compared with the negative number from last year’s U.S. profile of 5.5 million jobs lost in 2009. Moreover, according to Advocacy’s third quarter 2011 bulletin, more than half of the 1.13 million new jobs were from small firms—as were more than 80 percent of the net new jobs in the first quarter of 2011. Note that these numbers in Table 3 of the profiles are based on different data than the Census numbers, so the exact figures will vary somewhat from one source to the other. But the trend is the same, which is good news for the economy and small business.
You can check this out for yourself state by state. Go to the right four columns in Table 3 in any state and add the job gains as a result of business openings and expansions; then subtract the job losses from business closings and contractions. I looked at a random sample of the states and found that only three of the 19 I examined showed negative employment change for 2010. All three had far fewer net job losses than in 2009 (see last year’s profiles). Coming out of the recession, they had a long way to go, but even those three are well on the way toward net positive job gains if the current trends continue.
—Kathryn Tobias, Senior Editor