How Many Jobs Do Small Businesses Create in Your State?

The wave of Delta infection rates is finally cresting,¹ but we’re still living in the so-called COVID economy. In fact, in spite of last year’s influx of payroll help via the CARES Act, 34% of small businesses remained closed nationwide as of this May.² 

We’re sure you’ve noticed this over the last year and a half, but when small businesses suffer, so does everyone else. After all, small-business owners employ 47.3% of the American workforce.² And since small businesses comprise 99.9% of all US businesses, a hit to small businesses is a hit to the entire US economy.²

So while bracing for whatever COVID crises this winter has in store for us, we wondered: How many people would be impacted if small businesses have to bear the brunt of another COVID-related economic downturn? This question led us to create a tool—our calculator below—for predicting how many jobs could be lost if small businesses in your state go through another crisis.

Honestly, there are endless interesting findings we could pull from our calculator, but here are a few that stood out to us: 

• The US has over six million small businesses that collectively employ more than 61 million people. 
• The average number of people employed by small businesses per state ranges from 7.4 people per business (Wyoming) to 14.7 people (District of Columbia). 
• Some states rely more on small businesses for employment than others. Montana’s small businesses employ a full 67.2% of the state’s population. Vermont’s small businesses employ the second-highest percentage of people per state at around 60%. 
• In contrast, Florida’s small businesses employ just 41.1% of the population. Small businesses in Arizona, Georgia, and Tennessee also employ around 42% of their respective states’ population. 
• If 5% of existing small businesses closed nationwide, more than three million people would be out of a job. 
• If 10% closed, more than six million people would lose their jobs.

To estimate the potential impact of future COVID-related economic downturns on small businesses, we used the Census Bureau’s 2018 Statistics of U.S. Businesses.³ We narrowed the range of small businesses to ones with less than 500 employees and excluded businesses without any employees.⁴ From there, we calculated the average number of employees for each small business in each state, then used that number to estimate how many people could lose their jobs if more small businesses shut their doors.

Estimating the potential small-business job loss in your state is pretty depressing, right? We agree—and we’re hoping that showing the hard numbers on small-business job creation (and loss) will inspire state and federal governments to protect small businesses from potential economic downturns. 

Of course, the CARES Act enabled thousands of small businesses to keep people employed last year. But more than half of the money the Treasury allocated for the first round of PPP loans went to over 600 bigger businesses, including several dozen chain stores.5 And while most businesses needed help last year regardless of their size, it’s safe to say America’s chains pulled through just fine. A third of US small businesses didn’t.

We hope the data from calculators like ours can help make a compelling case for why, if a COVID-related downturn is in our future, small businesses deserve more financial aid (or, at least, better safeguards) than they received before. Millions of employees are counting on it.