Don’t let the word “micro” fool you: businesses with fewer than ten employees are big drivers of the national employment rate. Micro-business employees and self-employed workers actually account for more jobs in the economy than the entire U.S. manufacturing sector. Between 2000 and 2013, micro-businesses represented over 20% of the job gains and losses in the U.S. economy.
During the Great Recession, micro-businesses were the only kind of firm that still created jobs. In fact, if just one in three micro-businesses hired one additional employee, the United States would reach full employment. However, micro-business employment rates have been on the decline in recent decades. In 1979, micro-businesses employed 15% of all workers, which declined to 11.5% in 2013. Compared to the years before the recession, small businesses are now more likely to be owned by self-employed individuals without employees. Some of this decline has to do with the disappearance of small agricultural businesses, but it also is the result of a climate of small business support that is often hostile to the smallest businesses.