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Entrepreneurship, small businesses massacred in U.S. recession
By Catholic Online (NEWS CONSORTIUM)
July 27th, 2012
Catholic Online (www.catholic.org)
July 27th, 2012
Catholic Online (www.catholic.org)
More than 170,000 small businesses in the U.S. collapsed between the
years of recession, 2008 and 2010. According to newly released census
data, a total of 6.79 million small businesses operated within the
nation's 938 urban areas in 2010, the latest year for which official
statistics. The recession officially began in December 2007.
The downward trend was not limited to any one region. Seventy-five of the nation's 100 biggest markets had fewer small businesses in 2010 than the year previously. Reno, Nevada, took the biggest hit at 2.6 percent.
Entrepreneurship was another casualty of the financial crisis. The number of self-employed Americans dropped four percent to 9.8 million between November of 2007 and June of 2009. Twelve percent more "mom-and-pop" shops went out of business in 2009 than in 2007.
The news is a double-edged sword, as many people who lost their jobs in the recession started small businesses out of necessity.
Eighteen percent of entrepreneurs who launched their own enterprise in the last 12 months have done so after being laid off, double the rate before the recession.
Times are tough for the self-employed. Nearly four in five businesses have no employees and they make an average $45,000 annually, according to the U.S. Census Bureau.
These troubling statistics come on the heels of comments made by President Barack Obama that one cannot build a business alone.
"If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive," Obama said in a speech in Roanoke, Virginia.
"Somebody invested in roads and bridges. If you've got a business - you didn't build that. Somebody else made that happen."
Republican nominee Mitt Romney has used those controversial comments to his advantage. In a Romney campaign ad, the founder of a metal fabricating business in New Hampshire asks, "My father's hands didn't build this company? My hands didn't build this company? My son's hands aren't building this company?
"Did somebody else take out the loan on my father's house to finance the equipment? Did somebody else make payroll every week or figure out where it's coming from? President Obama, you're killing us out here. Through hard work and a little bit of luck, we built this business. Why are you demonizing us for it?"
President Obama and his team have gone into damage-control mode, releasing a new TV ad in which the president says that "we're all in this together.
"Of course Americans build their own businesses," he says in the video. "Every day, hard-working people sacrifice to meet a payroll, create jobs, and make our economy run. And what I said was that we need to stand behind them, as America always has."
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