Job Losses in Small Businesses in USA Due to Recession

Recovery of small businesses in the U. S. from the recession was very slow. Most of the job losses during the end of 2009 were seen in small businesses. According to the statistics of labor department, 61.8% of job losses were seen in the fourth quarter of 2009 in the private sector. About 54.1% of new jobs were created. About 29% of all workers were employed by small businesses.

However, in 2008, there was a rise of job creation and less job losses, which has been reversed in 2009. It was believed that the effect of recession was ended by the fourth quarter of 2009. However, it was still continued in small businesses due to tight credit access. Regardless of the size of the businesses, around 200,000 jobs were lost in the fourth quarter.

About 17.8% of job losses was indicated in the fourth quarter among companies having employees between 50 and 249. 10% of job losses was reported in medium sized companies having employees between 250 and 999. These businesses added around 9.9% of new jobs. Among larger companies having more than 1,000 employees, 18.3% of all job gains and 17.7% of job losses were observed.

Slow liquidation of excess housing, fall of consumer demand, deleveraging by consumers and companies and others are some of the factors for job losses in small businesses during recession.

Recession resulted in decreased employment in almost all industries. Transportation and warehousing industries were the most affected ones with respect to employment. However, there was no effect on service-providing industries, health and education services, and professional and business services.