On Friday, unemployment numbers come out. They might be up or down a tenth of a point, but one thing we know is that we still need to create a lot of jobs.
If we want job growth, if we want to solve our long-term unemployed problem, then more small businesses need to be created. Businesses like small organic farms, childcare centers, niche manufacturers, gourmet food trucks, solar installation firms, home health care agencies -- the list goes on.
These very small businesses are the future our economy. The reality is that firms are starting smaller and staying smaller and that more people want to be their own boss. The Bureau of Labor statistics reported in March that the average size of new start-ups went from 7.6 employees in the 1990's to 4.7 employees in 2011. And the share of the self-employed in the labor market has grown by 3.5 percent a year since 2000 -- that's more than twice as fast as it was growing pre-2000.
We need good strategies to help these businesses start and thrive. We need good strategies to help the unemployed create their own jobs.
Efforts like Start-up America, loosening visa restrictions, tax credits for hiring are good for helping high growth firms, you know -- Twitter, Zynga, and the like. However, the Organization of Economic Development and Cooperation (OECD) reported last year that less than one percent of start-ups have the potential to grow in terms of jobs.
To create more businesses, we need to broaden the spectrum of businesses that we purport to help with current policy.
Thumbtack.com and the Ewing Marion Kauffman Foundation surveyed 6,000 small businesses about what they value from their government. The answers might surprise some people -- easy to understand licensing requirements were twice as important as tax-related regulations and business training is very important.
For me, the survey formalizes what I've learned in my 25 years of experience -- the first step to success for locally grown small and micro-businesses is business assistance. Then they are ready to get a loan and grow and add jobs. Businesses that receive assistance have an 80 percent success rate as compared with the 50 percent to 80 percent mortality rate for small businesses overall.
For example, Jose and Rosie Rodriguez own King City Tires in the southern Salinas Valley in California. Their region is very distressed with an official unemployment rate of over 16 percent and a real rate closer to 30 percent. King City Tires found a niche servicing tractors in the fields, 24/7. It took two years of business counseling from El Pajaro Community Development Corporation for the Rodriguez' to qualify for a $1.5 million Small Business Administration loan to expand their business. Now they employ 16 full-time workers.
El Pajaro CDC is one of 85 CAMEO member organizations in California that provide business training, technical assistance and financing to entrepreneurs. In 2010, the organizations served 22,000 very small businesses with training, business and credit assistance and loans. These firms -- largely start-ups with less than five employees -- supported or created 38,000 new jobs in California.
I urge policy makers to do something that will help people BYOB -- build your own business -- and help the majority of small businesses. I urge them to support business start-ups with business assistance and microloans. Specifically, Congress should fund the SBA PRIME Program, the Microloan Technical Assistance programs, Women Business Centers, and Small Business Development Centers at their 2010 levels. Funding these programs is a small investment that has a huge payoff for the businesses, for their communities, for job creation and for our economy.