
Small Business Saturday offers a reason to be extra thankful: businesses with fewer than 20 employees have been the only ones to grow payrolls since COVID-19 hit.
By Bryce Hill | Illinois Policy Institute
Illinoisans have an extra reason to “shop small” on Nov. 30, Small Business Saturday: “mom and pop” shops have been the engine behind the state’s job recovery from the COVID-19 economic downturn. They deserve a “thank you.”
Businesses with fewer than 20 employees have been the only firms to add jobs on net since the onset of the pandemic, accounting for the creation of nearly 110,000 jobs. Meanwhile, firms of all other sizes have yet to restore employment to pre-pandemic levels and remain more than 84,000 jobs below early 2020 levels combined, according to Census Bureau data.

In 2023 alone, businesses with fewer than 20 employees were responsible for creating nearly 31,000 jobs – 74% of the job creation in the state. The state’s largest businesses with 500 or more employees shed more than 17,500 jobs.

While small businesses have been responsible for virtually all net job growth in recent years, their contributions to the Illinois economy are nothing new. In the decade prior to the pandemic, small businesses were the leading job creator in the state. Businesses with fewer than 50 employees were responsible for 64% of the state’s job growth. Businesses with fewer than 20 employees alone created 57% – nearly 312,000 – of the net new jobs.

What is a new development for Illinois’ small businesses and their employees is the impressive wage growth they have experienced in recent years. Historically, wage growth among small businesses has lagged the statewide average and those of larger businesses. This hasn’t been the case in recent years. From 2023-2024, employee wage growth at businesses with fewer than 50 employees was 32% faster than the statewide average, or 3.8% compared to 2.8% statewide. This was higher than for employees of larger businesses. Average wage growth among firms with 500 or more employees was 3.6%, while businesses with 50-499 employees experienced no wage growth on average.
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