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With unemployment at a 26 year high at 10.2%, its no wonder that DC movers and shakers are starting to focus more attention on small business owners.
Statistics supplied by ADP (and reported by CNN) show that small businesses (businesses with less than 50 employees) cut 68,000 jobs this past November. A huge portion of the total 5.3 million jobs lost this year alone was due to the 2 million jobs lost in small business.
With challenges such as small business loans drying up, SBA subsidies running out, and other small business financial institutions going bankrupt, it will be harder to recover those lost jobs. In fact, large banks have axed close to $10 billion dollars in small business lending.
As a result of small business unemployment on the rise, President Obama addressed the credit crunch being faced by small business owners in his job summit held at the White House this week.
The Washington Post quotes Obama in his closing statement as saying, "All the reports that we're getting is that if you are a big corporation right now, the credit markets are working for you. If you are a small business, and in some cases a medium-size business, even if you are profitable, that you're still seeing credit frozen. And we are going to have to unlock that and that's going to require an interface between what we're doing on the recovery side and what we're doing on financial regulation and our banking policies."
Let's hope that the government can get small business lending back on track. Otherwise, it could be hard for small businesses to ramp up employment.
Even Treasury Secretary Timothy Geithner has acknowledged that without credit for small businesses, they simply can not grow. CNN quotes him as saying, "No jobs without growth. No growth without credit."
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