The report, written by SBE Council chief economist Raymond J. Keating, looks at the trend in business establishments and employment nationally and state by state from 2007 to 2009. The states are ranked in each of ten measures of business establishments and employment.
Nationally, 6.1 million jobs were lost, a decline of 5.1 percent. Meanwhile, the losses in business establishments were overwhelmingly about small and mid-size businesses, which makes sense as those make up the bulk of the economy. Establishments with fewer than 100 employees accounted for 95.6 percent of the overall decline, and firms with less than 500 workers made up 99.6 percent of the decline. At the same time, though, as a percent of each category, establishment declines were bigger for large (500 or more workers) establishments at 6.09 percent and for mid-size (100-499 employees) establishments at 6.68 percent, compared to a decline of 3.45 percent for small firms (with fewer than 100 employees).
As for changes in total establishments, the top states (including the District of Columbia) faring best during the recession were 1) District of Columbia, 2) North Dakota, 3) Alaska, 4) South Dakota, 5) Wyoming, 6) Vermont, 7) Nebraska, 8) Oklahoma, 9) Delaware, and 10) Hawaii. But only the District experienced a net plus. At the other end, the greatest losses in total establishments came in the following: 42) Washington, 43) Arizona, 44) North Carolina, 45) Illinois, 46) New Jersey, 47) Georgia, 48) Michigan, 49) Ohio, 50) Florida, and 51) California.
Focusing on small establishments with fewer than 100 employees, the states (including the District of Columbia) performing best were 1) District of Columbia, 2) North Dakota, 3) Alaska, 4) South Dakota, 5) Wyoming, 6) Vermont, 7) Oklahoma, 8) Nebraska, 9) Hawaii, and 10) Delaware. Again, only the District experienced a net plus. The greatest losses came in: 42) Washington, 43) Arizona, 44) North Carolina, 45) Illinois, 46) New Jersey, 47) Georgia, 48) Michigan, 49) Ohio, 50) Florida, and 51) California.
Taking in all of the comparisons in the report, Keating noted that the states performing least poorly during the 2007-2009 period were Alaska, South Dakota, Louisiana, North Dakota, Wyoming, Oklahoma, Nebraska, along with the special case of Washington, D.C. In contrast, the very worst were Florida, Indiana, Ohio, Michigan, Georgia, Arizona, California, North Carolina, Nevada, and New Jersey.
Keating concluded, "While broad factors, including misguided federal public policies, the housing/credit mess, and troubles in the auto industry, dragged down the entire economy, the effects varied by state. And pro-growth policy environments certainly helped ease problems in some states. Indeed, given the different make up and policy climates state by state, it is not surprising that state economies vary in performance. What's striking about the 2008-09 recession, however, is just how sweeping and deep it was across the entire nation, as reflected in wide declines in the number of business establishments and employment."
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