Small businesses have been at the losing end of the U.S. economy for decades, but nothing has diminished their stature like the Covid-19 crisis. Thousands of small firms have been driven out of business while their larger counterparts have largely survived and, in some cases, even flourished.
The danger is that as a result U.S. economic power will reside in fewer hands, diminishing the innovation and entrepreneurship that have helped drive the country’s success.
In 1989 businesses with fewer than 100 employees accounted for 40% of the workers employed by all U.S. firms, according to the Census Bureau. Newly released data show that as of 2018 that had fallen to 33%.
Now it is almost certainly even lower. Small-business transaction data collected by software and business-services provider Womply show that about 1 in 5 businesses that were open in January have stopped transacting entirely. Most of them have likely closed