THE SMALL BUSINESS RECESSSION WSJ’s Kate Da
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Posted On: 04/28/2015 12:07:07 PM
THE SMALL BUSINESS RECESSSION
WSJ’s Kate Davidson: “The economy has taken longer to recover since the latest recession than previous economic downturns. But that lag is even more pronounced for small businesses, according to new research from Goldman Sachs. … . Call it a two-speed economy. While large corporations have generally performed well since the crisis, generating strong revenue growth and boosting wages for workers, business formation has dropped off for small firms and employment growth is tepid. ‘The recovery felt by large firms and the people who work for them is very different from the recovery felt by small firms and the people who work for them,’ researchers from Goldman’s Global Investment Research group argue in a new paper.
“The primary reason, they say, is new bank regulations imposed in the years following the financial crisis. The rules, including higher capital requirements, have increased the cost and reduced the availability of credit for small businesses, which rely mostly on banks for financing, they argue. New regulations also increase the fixed costs of doing business, which hurts small firms more than large companies that are able to spread new costs across a larger volume of business. … In addition, the number of small businesses has actually declined over the five years since the start of the financial crisis — the only such decline since the U.S. Census Bureau data first became available in the late 1970s.”
http://on.wsj.com/1bNjD9a
WSJ’s Kate Davidson: “The economy has taken longer to recover since the latest recession than previous economic downturns. But that lag is even more pronounced for small businesses, according to new research from Goldman Sachs. … . Call it a two-speed economy. While large corporations have generally performed well since the crisis, generating strong revenue growth and boosting wages for workers, business formation has dropped off for small firms and employment growth is tepid. ‘The recovery felt by large firms and the people who work for them is very different from the recovery felt by small firms and the people who work for them,’ researchers from Goldman’s Global Investment Research group argue in a new paper.
“The primary reason, they say, is new bank regulations imposed in the years following the financial crisis. The rules, including higher capital requirements, have increased the cost and reduced the availability of credit for small businesses, which rely mostly on banks for financing, they argue. New regulations also increase the fixed costs of doing business, which hurts small firms more than large companies that are able to spread new costs across a larger volume of business. … In addition, the number of small businesses has actually declined over the five years since the start of the financial crisis — the only such decline since the U.S. Census Bureau data first became available in the late 1970s.”
http://on.wsj.com/1bNjD9a
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