SBEC: America’s Freight Railroads are a Small Business Story

By: Raymond J. Keating, Small Business & Entrepreneurship Council Chief Economist
Date: March 2018

Given the changes made on the policy front with the Staggers Act and the resulting efficiencies and investments, freight railroads stand out as an essential bloodline for the U.S. economy. But make no mistake, the story of America’s freight railroads also is a small business story. The U.S. economy very much is an entrepreneurial, small business economy, with smaller firms being the majority in most industries. That is no different in the sectors directly and indirectly impacted by freight railroads. The role of small business in each of these sectors is significant:

  • In all but one of the 13 industries highlighted, the majority of employer firms were small businesses with fewer than 20 employees – ranging from 51.2% of firms in the warehousing and storage sector to 93.2% in the agricultural sector.
  • In all 13 sectors, firms with fewer than 100 employees made up at least 69% of employer firms – ranging from 69.7% in warehousing and storage to 99% in construction.
  • And among all 13 sectors, the percentage of firms with fewer than 500 workers ranged from 83.3% again in warehousing and storage to 99.8% in construction.

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