October 25, 2014

Small Businesses Created 45 Percent of the New Jobs in June

new jobs

Small businesses continue to spur U.S. job growth. Companies with fewer than 50 employees created 45 percent of the 188,000 new jobs in June, a recently released ADP National Employment Report said.

The 84,000 jobs created by small firms represent nearly half of the jobs created by U.S. businesses and the percentage of jobs created by small companies continues to grow.

This is the second consecutive month for growth in job creation among smaller firms. In May, small businesses created 63,000 jobs, up from 57,000 in April. That month saw a major decline from March’s 72,000 jobs added by smaller companies.

Smallest of the Small Carry the Load

Also, as in previous months, the smallest of the small represented the majority of small business job creation, the ADP Small Business Report said. Between May and June, 54,000 jobs were created by businesses with less than 20 employees. By comparison, businesses with 20-49 employees added 31,000 jobs during the same period.

The results are part of an ongoing trend. In May, companies with between 1 and 20 employees created 37,000 of the 58,000 jobs credited to small businesses. And in April, businesses in the same category created 34,000 of the 50,000 jobs added by small businesses as a whole.

Where Job Growth Occurred

As usual the largest job growth occurred in the service sector with small businesses creating about 70,000 of these jobs. The sector includes jobs pouring lattes but there are many other kinds of jobs and businesses represented as well.

The service sector includes financial, professional and business services, but also includes employees like restaurant workers, housekeepers, teachers, health care workers and retail sales workers too.

June also saw the largest increase of jobs in the goods producing sector in four months with 27,000 new jobs added, 14,000 among smaller companies. For small businesses, this sector includes mainly construction and manufacturing.

Obamacare Not Affecting Job Growth … Yet

It’s obvious that companies with fewer than 50 employees continue to represent a growing percentage of jobs being created. Fifty full-time employees is the number at which businesses will be required under the new Patient Protection and Affordable Care Act to provide medical benefits or pay a penalty per employee for not offering them by Jan. 1, 2015.

Still, in a prepared statement issued with the report (PDF), Mark Zandi, chief economist of Moody’s Analytics, insisted:

Health Care Reform does not appear to be significantly hampering job growth, at least not so far.

Has your small business added any jobs in the last few months?  Do you have any plans to do so in the near future?

Job Growth Photo via Shutterstock

9 Comments ▼

Joshua Sophy - Staff Writer


Joshua Sophy Joshua Sophy is a staff writer for Small Business Trends, covering technology and business news. He is a journalist and editor with 15 years experience in media. A former newspaper reporter and editor, Joshua also serves as President of the Board of Directors of a curling club and is editor of a regional newsletter focused on the sport of curling in the Eastern U.S.

9 Reactions

  1. I absolutely agree that small businesses are creating new jobs. Everywhere you look people are starting their own companies and I think the reason is because we have come to an age where people must be in charge of their own income.

    People are turning to smaller corporations where they can know who they are working for, and I think, are happier doing so.

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