Steve Kimatian (Matt Cohen)
The Statement: an economic proposal with praise for small businesses
From: Steve Kimatian, the Republican mayoral candidate
Type: Interview
Date: Aug. 18, 2009.
Place: Interview with News10Now
URL: http://news10now.com/cny-news-1013-content/480114/steve-kimatian–r–
SUMMARY:
In an interview on his economic proposals, Steve Kimatian praised the role of small businesses in generating economic growth and jobs. He promised to support economic development policies that help small businesses. At the time, Kimatian was running for the GOP nomination against Otis Jennings. In a primary on Sept. 15, Kimatian won the nomination.
What He Says:
In the interview, Steve Kimatian says: “We need to develop small businesses. That’s where the most of the employment will be.”
The Facts:
“We need to develop small businesses. That’s where the most of the employment will be.”
That’s accurate.
First, let’s clarify the definition of small business. The federal Small Business Administration defines a small business as one with fewer than 500 employees.
Government statistics paint this picture of small businesses’ role in the U.S. economy:
- Small businesses accounted for 64 percent of the 22.5 million net new jobs between 1993 and the third quarter of 2008, according to U.S. Bureau of Labor Statistics.
- They employ over half of all private-sector employees, reports the Department of Commerce and the Department of Labor.
- They pay 44 percent of total U.S. private payroll, according to those federal agencies.
- And they create more than half of the nonfarm private gross domestic product, or GDP.
The recession has forced small and large businesses to shed employment. But research suggests that smaller firms have been able to increase employment more rapidly than their larger counterparts in economic downturns.
For example, in the first three quarters of 2009, the United States lost 1,695,000 jobs. Of those, 60 percent were in small businesses, according the Small Business Administration.
But data from the U.S. census.gov/” target=”_blank”>Census Bureau indicated small businesses created most of the jobs in the immediate years following the 1990-1991 and 2001 recessions. Large businesses grew little.
During these two recessions, firms with fewer than 20 employees were the only ones who created more jobs than they lost, according to the U.S. Census Bureau. The larger category of small businesses and large firms both had net losses of jobs.
Conclusion:
Kimatian’s statement is accurate. Small businesses created 64 percent of net new jobs from 1993 to 2008. Also, it was the engine of job growth in recovering from the 1990 and 2001 recessions.
(Lynette Chen is a graduate student in magazine, newspaper and online journalism.)
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