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Posted by on in Minimum Wage
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Small firms vital to tackling unemployment

With unemployment expected to remain unchanged at 8%, new findings from the Federation of Small Businesses (FSB) show just how vital small firms are to the recovery, as 88% of unemployed people that find jobs in the private sector either start up or work for an SME.

Data tracked since the onset of the recession in 2008 shows that 88% found work in a small business: a quarter (24%) worked in a micro businesses, 27% with a small firm and 17% started their own business.

Although there have been signs of a marked improvement in the labour market in recent months, levels of joblessness are still stubbornly high. FSB's new research demonstrates that small firms are vital to reducing this number and need to be supported.

As a result, the FSB is calling for the Government to urgently review its current National Insurance Contributions holiday to allow more small firms to take on staff. The organisation believes that by allowing more small businesses to take advantage of the scheme, more jobs could be created. Crucially, these could be full time jobs at a time when many people are taking on part-time work. 

The New Enterprise Allowance also needs to be available from day one of a person claiming Jobseekers Allowance, and should be in line with the national minimum wage. This would help to encourage more people to start a business and if the funding was available for a full year, mean the business had more chance of survival.

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