According to the US Census Statistics of US Businesses (SUSB) establishment survey in 2021, there were more than 32 million small businesses (fewer than 500 employees) in the United States, accounting for 46.8 percent of US private-sector employees. Small businesses have always represented a major source of employment for workers of all ages – particularly older workers, who are also more likely than their younger counterparts to own a small business.
This fact sheet provides details on older workers’ prominent position in what remains a key driver of the labor force and overall economy: small businesses.
- More workers ages 50+ work at private small businesses—defined as those with fewer than 500 employees—than at larger firms.
- Because of the overall aging of the workforce, the share of older workers in the total small business workforce is growing.
- In the past decades, very large companies have come to dominate market share for goods and services. These shifts account for the declining percentage of people of all ages who work for small businesses.
- The pandemic has influenced short-term trends in small business employment. During the toughest months in 2020 many small firms laid off employees or even closed, but as the economy improved in 2021, many new small firms formed.
As the workforce has aged more broadly, and as the labor force participation rate of older workers has grown, the share of workers ages 50 and older in the private small business workforce has also grown. Overall, the trends indicate that, in the years ahead, private small businesses will remain a vital part of the US economy, with older workers playing an important role—as both employees and employers—in their success.
Schramm, Jennifer, and Carlos Figueiredo. US Small Business Employment and Older Workers. Washington, DC: AARP Public Policy Institute, April 28, 2023. https://doi.org/10.26419/ppi.00190.001.