Myth: Small businesses create the most jobs

One clear myth that both parties have been embracing is that small businesses are the engines of economic growth.
They say that most new jobs are created by small businesses.

In fact, most new jobs are created by small businesses.
The problem is that most job losses are caused by small businesses too!
Small businesses are constantly going out of business. Most small businesses fail within a year or two of starting.
So at the same time that a bunch of small businesses are starting, a bunch of other small businesses are closing.

Somewhere on the web (that I couldn't find again) someone points out that if small businesses were really creating a net increase in employment, the percentage of people working for small businesses would increase over time.
But that isn't happening: the percentage of people working for small companies is stable over time.

There are lots of good articles on the web with more details, including this, this, and this.

Back to the list of economic myths