Report: Grand Rapids is 9th most dependent on small businesses for employment

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A new report found over half of Grand Rapids workers are employed by small businesses, the ninth-highest percentage among large metros.

Construction Coverage used data from the U.S. Census Bureau to create the ranking, “Cities Most Dependent on Small Businesses,” and 50.36% of Grand Rapids workers are employed by a small business.

“Collectively, small enterprises employ around 60 million Americans, which represents nearly half of the private workforce in the U.S.,” wrote Jonathan Jones in the report. “Compared to larger firms, small businesses tend to be (nimbler), which promotes competition and innovation in the economy. … But with fewer financial resources than larger firms, small businesses are especially vulnerable during economic downturns.”

Jones noted COVID-19 is creating extra difficulties for small businesses, as food services and retail establishments together employ nearly a quarter of all small business employees in the U.S.

Methodology

To identify the locations most dependent on small businesses, researchers at Construction Coverage used data from the U.S. Census Bureau’s Statistics of U.S. Businesses to find the percentage of employees in each metro employed at small businesses, defined as those firms having fewer than 500 employees.

The researchers also calculated the percentage of total payroll accounted for by small business employees, as well as the average payroll per employee at large and small businesses.

To improve relevance, only metropolitan areas with at least 100,000 residents were included. Metros were grouped into cohorts based on population size: small, 100,000-349,999 residents; midsize, 350,000-999,999 residents; and large, with a population of 1 million or more.

Grand Rapids-Wyoming statistics

  • Percentage of employees at small businesses: 50.36%
  • Total number of small business employees: 253,133
  • Total number of small businesses: 19,092
  • Percentage of total payroll paid by small businesses: 48.50%
  • Total small business payroll per employee: $43,895
  • Total large-firm payroll per employee: $47,283

Top 10 cities most dependent on small business

  1. New Orleans-Metairie, Louisiana
  2. Miami-Fort Lauderdale-West Palm Beach, Florida
  3. Oklahoma City, Oklahoma
  4. Providence-Warwick, Rhode Island-Massachusetts
  5. New York-Newark-Jersey City, New York-New Jersey-Pennsylvania
  6. Los Angeles-Long Beach-Anaheim, California
  7. Portland-Vancouver-Hillsboro, Oregon-Washington
  8. Buffalo-Cheektowaga-Niagara Falls, New York
  9. Grand Rapids-Wyoming
  10. San Francisco-Oakland-Hayward, California

Bottom 10

  1. Salt Lake City, Utah
  2. Charlotte-Concord-Gastonia, North Carolina-South Carolina
  3. Memphis, Tennessee
  4. Louisville-Jefferson County, Kentucky-Indiana
  5. Nashville-Davidson-Murfreesboro-Franklin, Tennessee
  6. San Antonio-New Braunfels, Texas
  7. Columbus, Ohio
  8. Las Vegas-Henderson-Paradise, Nevada
  9. San Jose-Sunnyvale-Santa Clara, California
  10. Orlando-Kissimmee-Sanford, Florida

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