Chicagoans have even more to be thankful for on Small Business Saturday: small businesses created all Cook County’s net new jobs since the pandemic.
Chicagoans will have an extra reason to “shop small” on Nov. 29, Small Business Saturday: small businesses have long been the key driver behind job growth, but since the pandemic they’ve been the sole creator of new jobs.
In Cook County, businesses with fewer than 20 employees have been the only firms to add jobs on net since the onset of the pandemic, creating nearly 65,500 jobs. Firms of all other sizes have yet to bring their employment back to pre-pandemic levels. They remain more than 57,000 jobs below early 2020 levels, according to Census Bureau data.
This trend continued last year as businesses with fewer than 20 employees added nearly 14,000 jobs – 91% of the jobs created in Cook County. Firms with 50-249 employees added nearly 1,400 jobs, and firms with 250-499 employees added just 66 jobs last year. Firms with 20-49 employees shed nearly 1,100 jobs. The largest firms in the county, with 500+ employees, lost more than 5,500 jobs last year.
Small businesses have been crucial for job growth across the nation, but they have been even more vital for growth in Cook County. Nationwide, businesses with fewer than 20 employees have been responsible for 81% of job growth since the pandemic, statewide the figure is 99% and in Cook County 100%.
The importance of small businesses to the Chicago economy and the extreme struggles of large businesses in recent years have important implications for public policy, especially as Chicago Mayor Brandon Johnson works to pass the city budget before the end of the year.
The city’s unfriendly business environment has already pushed many employers out of the city and led to plummeting commercial real estate values. This has contributed to Chicago’s highest-in-the-nation commercial property tax rate, which is more than double the national average.
Johnson is pushing for another $500 million in tax hikes in his upcoming 2026 budget. The largest would be a $330 million increase to the city’s “cloud tax,” which applies to computer software and artificial intelligence platforms used by businesses. Although it received heavy criticism from business leaders when it was raised from 9% to 11% last year, Johnson again wants to hike the cloud tax to become the highest in the nation in 2026. He plans to increase it from 11% to 14%. Employers, regardless of size, would be hit by the tax increase.
Perhaps his most harmful proposal is to revive Chicago’s corporate “head tax.” Once described as a “job killer” by former Mayor Rahm Emanuel, this tax would charge any business with over 100 employees $21 a month per employee.
The tax is expected to cost $100 million if passed. While only affecting large businesses – for now – the head tax is a direct impediment to employing Chicagoans: with every job added, employers pay higher taxes.
Large businesses have already been struggling to hire workers – failing to regain employment levels seen prior to the pandemic. They lost thousands of jobs just last year.
Chicago’s unemployment rate still sits far ahead of the national average, and the city continues hemorrhaging residents and businesses. Johnson’s proposed tax measures won’t protect Chicagoans – they’ll make matters worse.
Just like the city’s shoppers should thank their local retailers this Small Business Saturday, politicians should do the same. Rather than explicitly making it harder for these businesses to hire Chicagoans, the city should be focused on fostering an environment where businesses can thrive.
