Which employment statistic about small businesses is true?
Multiple Choice
A. great majority of U.S. workers find their first jobs with a small business.
B. Small businesses employ less than one-third of all private-sector employees.
C. About 100,000 employee-hiring small businesses are started every year.
D. Small businesses create about 15% of all new jobs in the United States.
The correct answer and explanation is:
Correct Answer: A. The great majority of U.S. workers find their first jobs with a small business.
Explanation:
Small businesses play a critical role in the U.S. economy, particularly as a gateway to employment for millions of workers. Data from the U.S. Small Business Administration (SBA) and other research indicates that small businesses serve as the primary entry point into the workforce for most Americans. These businesses often provide opportunities for individuals to gain their first job experience, acquire essential skills, and build professional networks.
Small businesses are defined as companies with fewer than 500 employees, but many employ far fewer people. They account for approximately 99.9% of all businesses in the U.S. and are crucial contributors to job creation, local economies, and innovation. This makes them ideal for fostering new employment, especially for younger workers, part-time employees, and those seeking flexible job opportunities.
Let’s examine why the other options are incorrect:
- B. Small businesses employ less than one-third of all private-sector employees.
This is false. Small businesses employ nearly 47% of the private-sector workforce in the United States, highlighting their importance in job creation and sustaining economic activity. - C. About 100,000 employee-hiring small businesses are started every year.
While many small businesses are started annually, the number varies significantly, and many do not initially hire employees, focusing instead on sole proprietorship or partnership operations. - D. Small businesses create about 15% of all new jobs in the United States.
This underestimates their impact. Small businesses actually account for about 60-65% of net new jobs created annually, according to SBA data.
By offering opportunities for first-time workers, small businesses lay the foundation for career growth and economic development, emphasizing their essential role in the U.S. economy.