Small businesses account for largest percentage of job lossses

New statistics from the Department of Labor underscore how small businesses continue to lag behind in the economic recovery.

This week, the agency revealed that businesses with 50 employees or fewer comprised 61.8 percent of all job cuts in the fourth quarter. These small businesses also created 54.1 percent of new jobs.

These numbers are the inverse of those posted a year prior, when small firms accounted for only half of job losses, yet made up 53.9 percent of all job gains.

While many economists believed that the recession would come to a close at the end of 2009, small businesses have continued to struggle. “Although small businesses account for a large share of gross hiring activity, they also account for a large share of gross firing activity. There is a huge amount of churn in the small business labor market,” Zach Pandl, an analyst for Nomura Securities, told the Wall Street Journal.

In comparison, companies with 1,000 or more employees hired more individuals than they laid off - accounting for 17.7 percent of job losses versus 18.3 percent of job gains.