62,000 Business Could Fail In 2009

Cutting jobs is one thing. Going out of business is another. As it becomes clear that millions of jobs will be lost by companies which are weak but will probably make it through the recession, the concern is shifting to companies which will not make it at all.

Since, by many estimates, businesses with under 100 employees represent more than 50% of the jobs in the US, watching a huge number of them burn out has become cause for increasing alarm, an alarm which does not appear to be addressed by any government bailout program.

According to the FT, The US will see 62,000 companies go bust next year, compared with 42,000 this year and 28,000 last year, says a report by Euler Hermes, part of German insurer Allianz. If the median number of people at those companies is 50, another three million people could be out of work.

Read the whole story here.

Comments

[BOBONDE]

This is the mess the republicans have given us, thanks to them even jobs like janitors and garbage men will be hard to come by!

[SailFree]

Way more could fail if we push the stupid global warming green agenda.

"2008 Will Be Coolest Year of the Decade"--headline, Guardian (London), Dec. 5

So much for the hysteria.

[unite4change]

Big business is just a brand now. Big corporations once manufactured their own products. Now, they are having the products produced in China, India, and third world countries for pennies on the dollar with unheard of profit margins. When these products are sold in the US, customers are not getting a break they are basically paying more as if they were produced in the U.S. by companies paying employees and benefits.

[orangepetal]

This has already been going on for awhile. There is only one way to stop a catastrophy and that is people who do have money need to spend. It sounds crazy but it is the only way out. The government investment program can help, unfreezing the credit market can help, but the only thing that will bring back a semblance of stability is if people and small businesses spend. Spending in Costco and Walmart unfortunately will not count. Commercial property owners and management companies should lower rents before there will be even more empty stores with no takers.

[darthdarcy]

It's gonna be a full scale depression...

The bankers have decreed it and that's why they are cashing out and leaving the table...

[Gladys1963]

What's with the headline--shouldn't it be businesses? Will the HuffPo copy editor lose business as well?

[Artos]

Corporations or Big Businesses as opposed to Small Businesses, don't care if small businesses fail. They don't need them. For that matter it is Big Businesses goal to dispense with all forms of middlemen. They intend in the final analysis to cut as much of their overhead as possible. They already have most Americans buying their products Online. By doing this they can cut out the retailer and shipping expenses. You buy their products online and pay for shipping by having a shipper like UPS or Fedex send it directly to you. The Corporations have their products made in Third World Nations where their production costs are low and they have no fear of the U.S. Governments regulations. The savings are enormous. Think of the old metaphor of the Larger fish eating the smaller fishes and you will get the appropriate picture. Why should it concern Big Business if we all have to work in Service Industries. We'll all be serving them.

[unite4change]

One word "profits".

[ThePeacemakers]

What work in the service industry?
People anywhere in the world can take an online order and have it shipped to you.

[SENATORCALLENBOWE]

NOT IF THAT TAX PAYERS HAVE ANYTHING 2 SAY ABOUT IT...WAIT...THEY DONT....

[Peter007]

Many small business's complain about he rules, and regs that local and state governments make them jump through. Large companies can afford to pay for the red tape but small firms usually can't. I pay $600 a year for my state license. Before 1990, there was no license requirement.
Now I don't have any work. How can I pay for my license? What do I get in return?

[Artos]

Peter007,

Your questions should then be, ' Why do we have State Governments and why are they allowed to constantly resort to graft and blackmail." If you don't want your State Government to set these high fees then do something about it.

[FrictionSoul]

It might also be because many small businesses get horrible advice, such as their business structure. Then there's that horrible computer called Windows - nobody I know every gets anything done that without having to call someone in to make sure it's running to begin with. There's a huge amount of wastefulness with small business.

That being said, these small businesses need to get active again. I see no reason why we should sit around and hope someone notices us when we can contact our local reps and let them know what the issue is. Have to. They don't know what they don't know.

I think there are great opportunities for small, local businesses to meet needs far quicker than the big corporations who long ago lost their acumen. Think about it: what do those big corporations server: your needs or your wants? 90% of them server your wants.

Wall St. has gone and messed up one of our biggest needs: housing. To hell with them. NOW is the time to make sure big business doesn't mess up our food with GMOs and keep the religious right from tampering with our sex drives.

[ICanHasDemocracy]

Yeah SMB's are a ddriving part of the economy- but so too is the NAFTA-Walmartizing of goods and services as well. And when automakers cry poorhouse- who really loses?

[texastrixie]

Helping keep small businesses alive is part of the reason for theStimulus package. It is hoped that by making sure more Americans have some sort of salary, more economic activity (purchasing) will occur.

The problem is that many small businesses provide either goods or services that no one really needs in a downturn. If Joe the plumber has a small plumbing company, he should be able to survive the downturn because people need plumbers. If Joann, the hair stylist, charges $50 for a haircut, she may not. This is not to say that $50 for a woman's haircut is too much, its not. But it may be too much when people are cutting back. And the small retail outlets that are filled with what my husband calls, "junk," well, they may go under too.

The big lie of our current economy is that somehow people need services and "things," as much as big ticket items like cars, refrigerators and small items, like shoes. The fact that this country imports a large percentage of all these items means we do no get to keep the majority of the dollars paid for them in this country. We are like overpriced deliverymen. We don't make it; we just get it from the foreign manufacturer to your house.

[ianmcc]

Americans have far too short a memory. Remember a year back when Bush et. all. in the neocon pack made it virtually impossible for the average man to file for bankrupcy? They KNEW this day was coming down the pipeline and tweaked the laws accordingly. Yet today they made sure to give trillion dollar pay outs for all their corporate buddies who can invest in who? Why the top 2% in charge of all these companies of course! And then they show their classism when the auto makers want a piece of the pie for their greedy incompetence, but since the auto industry has strong unions some of that money would actually filter to the middle class, which as always the sheer thought of THAT disgusts the neocons. They want to ensure that the retirement money of the baby boomers is depleated so it cannot be given to the next generation, ensuring the continuation of the greater divide of the haves and have not's that has been happening since Reagonomics.

[Artos]

ianmcc,
And yet Americans are still out there spending their hard earned last dollars on the Junk that Corporations want you to buy. They keep screaming at us to spend when we have little to spend because they want all of our money, not just the huge portion they already control in their coffers. These bailouts are nothing more than their attempt to get the rest by stealing it from the Treasury which is our money too. When will Americans learn or are they that hardheaded?

[Samalabear]

There was a very interesting story on NPR last year on how the new bankruptcy laws were having a severe chilling effect on entrepreneurship and innovation in America. And, of course, Keith Olbermann talked earlier about how the health care debaucle also had this effect, i.e. people worried about losing health insurance if they took the risk and followed their dreams or ideas.

[Samalabear]

Small business is still the engine that runs America. This is a great article. And, of course, as these small businesses fail, this will further fuel the foreclosure problem.