We hear a lot about large companies in the news, but small business is the engine of the U.S. economy.
America is home to more than 28 million small businesses that employ 57 million workers. And when you add owners and employees together, that’s a community of roughly 85 million hardworking Americans dependent on the success of small business—most of the private-sector workforce.
Small business owners are America’s most important job creators: U.S. small businesses accounted for almost two-thirds of the net new jobs created between 1993 and 2013—a grand total of 11.8 million new career opportunities. In 2012, small businesses created more than 2.1 million net new jobs.
Small businesses are the country’s main job creators because they are often growing and looking for new markets to expand. To do so, they need additional employees along the way. Large businesses, on the other hand, generally stay the same size, hiring new employees to replace departing ones.
Unfortunately, high taxes and recent government regulations in health care, finance, and labor disproportionately hurt small businesses and prevent them from growing and adding new jobs to the economy. Big business with big profits can afford to comply with red tape in a way that small businesses just starting out cannot.
As a result, small businesses still haven’t recovered completely from the Great Recession—and it shows by the chronically weak labor market. More than 94 million Americans are not working or actively looking for jobs. The labor force participation rate—which measures the percentage of employees and job-seekers in the U.S.—is less than 63 percent, the lowest figure since the late 1970s.
To bring small businesses back, and strengthen the job market, job-killing taxes and regulations must be rolled back. Job creators should be encouraged to hire more employees, not forced to reduce career opportunities. With 85 million people depending on the success of small business, it’s easy to see why small business is too big to fail.