How Many Jobs Do Small Businesses Create in Your State?

The wave of Delta infection rates is finally cresting,1 but we’re still living in the so-called COVID economy. In fact, in spite of last year’s influx of payroll help via the CARES Act, 34% of small businesses remained closed nationwide as of this May.2 

We’re sure you’ve noticed this over the last year and a half, but when small businesses suffer, so does everyone else. After all, small-business owners employ 47.3% of the American workforce.2 And since small businesses comprise 99.9% of all US businesses, a hit to small businesses is a hit to the entire US economy.2

So while bracing for whatever COVID crises this winter has in store for us, we wondered: How many people would be impacted if small businesses have to bear the brunt of another COVID-related economic downturn? This question led us to create a tool—our calculator below—for predicting how many jobs could be lost if small businesses in your state go through another crisis.

Interesting findings

Honestly, there are endless interesting findings we could pull from our calculator, but here are a few that stood out to us: 

  • The US has over six million small businesses that collectively employ more than 61 million people. 
  • The average number of people employed by small businesses per state ranges from 7.4 people per business (Wyoming) to 14.7 people (District of Columbia). 
  • Some states rely more on small businesses for employment than others. Montana’s small businesses employ a full 67.2% of the state’s population. Vermont’s small businesses employ the second-highest percentage of people per state at around 60%. 
  • In contrast, Florida’s small businesses employ just 41.1% of the population. Small businesses in Arizona, Georgia, and Tennessee also employ around 42% of their respective states’ population. 
  • If 5% of existing small businesses closed nationwide, more than three million people would be out of a job. 
  • If 10% closed, more than six million people would lose their jobs.

What happens when small businesses close in each state?

State
Total # of Small Business Employees
% of People Who Work For Small Businesses
Number of people without jobs when 5% of businesses close
Number of people without jobs when 10% of businesses close
Number of people without jobs when 15% of businesses close
USA61,244,03146.79%3,062,2026,124,4039,186,605
Alabama809,02446.74%40,45180,902121,354
Alaska136,45552.27%6,82313,64620,468
Arizona1,092,91842.87%54,646109,292163,938
Arkansas491,38347.10%24,56949,13873,707
California7,339,39048.21%366,970733,9391,100,909
Colorado1,163,58648.01%58,179116,359174,538
Connecticut739,87048.39%36,99473,987110,981
Delaware190,04246.83%9,50219,00428,506
District of Columbia254,92047.25%12,74625,49238,238
Florida3,560,87041.07%178,044356,087534,131
Georgia1,700,14842.76%85,007170,015255,022
Hawaii275,07649.86%13,75427,50841,261
Idaho335,69656.16%16,78533,57050,354
Illinois2,475,17244.80%123,759247,517371,276
Indiana1,239,31444.01%61,966123,931185,897
Iowa652,49647.83%32,62565,25097,874
Kansas601,55049.99%30,07860,15590,233
Kentucky716,73143.64%35,83771,673107,510
Louisiana906,63253.60%45,33290,663135,995
Maine293,31356.82%14,66629,33143,997
Maryland1,166,90549.32%58,345116,691175,036
Massachusetts1,520,21945.74%76,011152,022228,033
Michigan1,907,31348.31%95,366190,731286,097
Minnesota1,261,00446.20%63,050126,100189,151
Mississippi437,79146.33%21,89043,77965,669
Missouri1,160,65745.81%58,033116,066174,099
Montana249,48267.20%12,47424,94837,422
Nebraska415,98949.19%20,79941,59962,398
Nevada523,77142.87%26,18952,37778,566
New Hampshire304,76549.76%15,23830,47745,715
New Jersey1,852,67649.55%92,634185,268277,901
New Mexico343,64854.43%17,18234,36551,547
New York4,126,84549.07%206,342412,685619,027
North Carolina1,734,13545.06%86,707173,414260,120
North Dakota196,36856.73%9,81819,63729,455
Ohio2,176,17144.61%108,809217,617326,426
Oklahoma715,60351.66%35,78071,560107,340
Oregon893,75854.85%44,68889,376134,064
Pennsylvania2,538,48746.34%126,924253,849380,773
Rhode Island230,74252.15%11,53723,07434,611
South Carolina830,09443.61%41,50583,009124,514
South Dakota210,30158.45%10,51521,03031,545
Tennessee1,138,84542.44%56,942113,885170,827
Texas4,870,82545.12%243,541487,083730,624
Utah606,60945.35%30,33060,66190,991
Vermont158,22860.56%7,91115,82323,734
Virginia1,578,66446.61%78,933157,866236,800
Washington1,442,96350.68%72,148144,296216,444
West Virginia272,04249.05%13,60227,20440,806
Wisconsin1,273,94048.96%63,697127,394191,091
Wyoming130,60563.47%6,53013,06119,591

Our methodology

To estimate the potential impact of future COVID-related economic downturns on small businesses, we used the Census Bureau’s 2018 Statistics of U.S. Businesses.3 We narrowed the range of small businesses to ones with less than 500 employees and excluded businesses without any employees.4 From there, we calculated the average number of employees for each small business in each state, then used that number to estimate how many people could lose their jobs if more small businesses shut their doors.

The takeaway

Estimating the potential small-business job loss in your state is pretty depressing, right? We agree—and we’re hoping that showing the hard numbers on small-business job creation (and loss) will inspire state and federal governments to protect small businesses from potential economic downturns. 

Of course, the CARES Act enabled thousands of small businesses to keep people employed last year. But more than half of the money the Treasury allocated for the first round of PPP loans went to over 600 bigger businesses, including several dozen chain stores.5 And while most businesses needed help last year regardless of their size, it’s safe to say America’s chains pulled through just fine. A third of US small businesses didn’t.

We hope the data from calculators like ours can help make a compelling case for why, if a COVID-related downturn is in our future, small businesses deserve more financial aid (or, at least, better safeguards) than they received before. Millions of employees are counting on it.

Sources:

  1. Akshay Syal, NBC News, “Has the Spread of Covid-19 Peaked in the US? What Future Covid Spread Could Look Like,” September 23, 2021. Accessed October 11, 2021.
  2. Iman Ghosh, World Economic Forum, “34% of America’s Small Businesses Are Still Closed Due to COVID-19. Here’s Why It Matters,” May 5, 2021. Accessed October 11, 2021.
  3. United States Census Bureau, “2018 SUSB Annual Data Tables by Establishment Industry,” May 2021. Accessed October 11, 2021.
  4. Andrew W. Hait, United States Census Bureau, “What Is a Small Business?,” January 19, 2021. Accessed October 11, 2021. 
  5. Jonathan O'Connell, Andrew Van Dam, Aaron Gregg, and Alyssa Fowers, The Washington Post, “More than Half of Emergency Small-Business Funds Went to Larger Businesses, New Data Shows,” December 2, 2020. Accessed October 11, 2021.
Kylie McQuarrie
Written by
Kylie McQuarrie
Kylie McQuarrie has been writing for and about small businesses since 2014. Prior to writing full-time, she worked with a variety of small-business owners (from freelance writers to real-estate solopreneurs), which gave her a front-row look at small-business owners' struggles, frustrations, and successes. Currently, she’s Business.org’s accounting and payroll staff writer. Her work has been featured on SCORE.org, G2, and Fairygodboss, among others.
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