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Business-owning Households More Likely Than Others to Have Higher Income and Wealth

February 7, 2010 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

1/28/2010 SBA Office of Advocacy Press Release

WASHINGTON, D.C. – Does small business ownership help increase a household’s overall well-being? One way to look at this is to examine how the income and wealth of households owning small businesses changed in the most recent economic expansion and recovery period. That task was undertaken in a study just released by the U.S. Small Business Administration’s Office of Advocacy.

“The report released today finds that households owning small firms in the 1998-2007period were more likely than other households to be in the top 50 percent in income and wealth,” said Susan M. Walthall, Acting Chief Counsel for Advocacy. “It will be important to continue to examine this data series to assess the well-being of small businesses in the current economic environment.”

Income and Wealth: How Did Households Owning Small Businesses Fare from 1998 to 2007? by George W. Haynes, updates previous Advocacy-sponsored studies and is based on additional data from the 2007 Survey of Consumer Finances. Household income is the sum of wages, salaries, interest, dividends, asset sales, rents, and other income sources. Household wealth is estimated by generating a balance sheet subtracting total liabilities from total assets. Findings include the following:

Households owning any business were significantly more likely to be high income earners in 2007 than in 1998; the largest percentage gain was among owners with more than one business.
In the latter part of the period—between 2004 and 2007—the likelihood that households owning a small business had a high income increased by 4.2 percent and the likelihood that they had a high level of wealth increased by more than 20 percent, compared with increases of 2.1 and 5.2 percent, respectively, in households not owning businesses.
 
The characteristics of households and businesses were somewhat different in 1998 than in 2007. By 2007, high income households were headed by younger people, while higher wealth households were headed by older people.
From 1998 to 2007, households not owning a business increased real mean wealth by just under 40 percent; the comparable increase for those owning a small business was 63.4 percent.

For a copy of the study, visit the Office of Advocacy website at www.sba.gov/advo.

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Small Businesses Are Important Players in U.S. Business and Job Growth

October 31, 2009 By Paul (Founder, WorkAtHomeTruth) 1 Comment

October 29, 2009 Press Release from the Small Business Administration’s Office of Advocacy:

 

    WASHINGTON, D.C. – Small businesses will play an important role in the nation’s economic future. The Office of Advocacy’s Small Business Profile for the United States, released today, provides details about small business employment, business starts and closings, bank lending in 2008, the demographics of business ownership, and firm and employment change by major industry and firm size.“The United States continues to depend on the health and ingenuity of its small business sector for the nation’s economic growth,” said Susan Walthall, Acting Chief Counsel for Advocacy. “In today’s economic climate, it is especially important for policymakers to keep small business concerns in mind as they formulate policy.”

    In 2008, the United States saw an increase of 0.7 percent in GDP and a private sector employment decline of 0.7 percent. The U.S. profile also shows that:

    Ø Small employers in the United States numbered 6 million in 2006 (latest data). There were also 20.8 million nonemployers, which increased to 21.7 million by 2007.

    Ø Small businesses added 2.5 million net new jobs in 2005-2006. Overall, they employed 50.2 percent of the nation’s nonfarm private workforce in 2006.

    Ø Businesses owned by women, and by Asian Americans, African Americans, Hispanic Americans, and Hawaiians and Pacific Islandeers all increased significantly over the most recent period for which Census data are available.

    As additional small business data become available over the coming months, they will be incorporated in a new edition of the state profiles, to be issued in early 2010.

    For more information and a complete copy of the state and territory small business profiles, visit the Office of Advocacy website at www.sba.gov/advo.

     

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    The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. For more information, visitwww.sba.gov/advo, or call (202) 205-6533.

 

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Strong Dollar Has Little Effect On Small Retailers, Larger Effect On Wholesalers

May 2, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

5/1/2009 SBA Office of Advocacy Press Release:

Small Wholesalers More Likely To Close Due To Rising Dollar

WASHINGTON, D.C. – A strong dollar (making imports cheaper and exporting more difficult) appears to have little effect on the survival rate of small retailers, according to a study released today by the Office of Advocacy of the U.S. Small Business Administration. The study covers 15 years of data, from 1990 through 2005, from the U.S. Census Bureau’s Statistics of U.S. Businesses and other sources.

On the other hand, the study’s authors found that real exchange rate appreciation lead to increased rates of small firm exit in the wholesale sector. In wholesale firms with more than 10 employees, a 10 percent real dollar appreciation leads to a roughly 20 percent increase in firm closures. This finding suggests that wholesalers are closely tied to domestic manufacturers, and find it hard to switch suppliers to take advantage of falling import prices.

“For many people, the idea of currency exchange rates has no relevance other than how far their dollars will go while on vacation,” said Shawne McGibbon, Acting Chief Counsel for Advocacy. “But it is of vital importance to the owners and employees of small wholesalers. Policy makers should take these concerns into account when making decisions affecting the relative strength and weakness of the dollar,” she added.

Robert M. Feinberg wrote Effects of International Competition on Small Wholesale and Retail Trade Firms with funding from the Office of Advocacy.

For more information and a complete copy of the report, visit the Office of Advocacy web site at www.sba.gov/advo.

The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

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The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers. For more information, visit www.sba.gov/advo, or call (202) 205-6533.

Filed Under: SBA Releases
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