Small Matters: Small business a big factor in job creation

When you read the paper, the news is mostly about big business: GM goes bankrupt. Microsoft releases a new operating system. Goldman Sachs posts record profits.

You would think that all businesses in America were big corporations. The president appoints the chief executive officer of General Electric Co., no less, to head up a commission on job creation. GE makes all kinds of stuff and lends money as well, a big financial institution. It employs 300,000 people worldwide, about half in the United States.

But let's put it in perspective. Every week now, more than 400,000 people in the nation file for initial unemployment claims - 428,000 just last week. These people were fired or laid off, and they amount to more than all of GE's employment for a year. That's 1.6 million people a month losing jobs, nearly 20 million people a year.

Yet every year, major recessions excepted, more and more people have jobs. A recent U.S. Bureau of Labor Statistics report indicated that more than 200,000 new jobs were created in a month. So if, say, 1.6 million people were laid off or fired in a given month, we must have hired 1.8 million workers.

That's what job growth in the United States looks like. Labor is the most important asset that the country - or any firm - has, and it is important that workers be free to seek the best pay they can find and that employers be able to adjust their workforces to produce their goods and services at the lowest cost for consumers.

So, if GE and other large corporations aren't big players in job creation, who produces all the new jobs in America? The answer is small business.

These businesses do everything, including building most of the houses constructed in America. Small business employs 67 percent of the private-sector workforce and pays out 44 percent of the private payroll. As the population grows, small firms provide the bulk of the new jobs needed. For many, small business provides their first experience in the world of work.