Oregon's Small Businesses

It is often said that small businesses are the primary driver of America's economy - they bring innovation, progress, and employment. Unfortunately there is no widely used definition of a small business. Classifying employers with fewer than 100 employees as small firms allows us to zoom in on some interesting business dynamics that occur throughout the state.

The vast majority of the state's firms employ between one and nine people. However, firms that employ 100 people or more account for nearly half of all private employment.

For firms that had at least one employee, the average annual payroll per employee was about $39,800 during the first three months of 2008. Annual average wages ranged from a high of $45,800 at firms which employed 100 or more people to a low of $31,000 among the smallest employers (1-9 employees).

Small businesses tend to pay less than large firms, and this disparity is larger in non-metro areas. As any rural Oregonian can tell you, the best wages are found at the largest employers. In non-metro counties, employees of firms with nine or fewer employees earn just 60 percent of their counterparts' wages at large firms (100+ employees), compared to 67 percent in the metro counties.

In 2006, Oregon had 248,194 businesses with no employment - at least twice as many as those with employees. While they may not employ people directly, these firms are an important part of the state's economy - they reported total receipts of $11.3 billion in 2006.

Read the full article, which was published in the most recent Oregon Labor Trends, for more information about Oregon's small businesses.