Petaluma, Calif. – On Friday, the U.S. Department of Labor (DOL) announced the national unemployment rate jumped to 9.1 percent in May.  The figure marks a high point for unemployment during 2011. Labor’s most comprehensive unemployment figures, U-6 unemployment, remained shockingly high at 15.8 percent in May. (http://www.bls.gov/news.release/empsit.t15.htm)  

“It’s no surprise that the Obama Administration’s economic policies are not working. It’s real simple; small businesses create over 90 percent of net new jobs, and yet the administration is giving billions in federal small business contracts to some of the largest companies in the world,” American Small Business League (ASBL) President Lloyd Chapman said.  The federal government is failing to hit its congressionally mandated small business goal by a long shot, Chapman added.

Labor’s statistics come in the wake of the eighth anniversary of the first congressional investigation into the diversion of federal small business contracts to corporate giants.

Since 2003 a series of federal investigations have uncovered billions of dollars a year in federal contracts intended for small businesses actually going to large businesses.  In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.”  The SBA IG has named the issue as the agency’s top management challenge for the last six consecutive years. (https://www.asbl.com/documentlibrary.html#5-15)  

In February of 2008, President Obama recognized the magnitude of the problem with the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”  To date, the Obama Administration has failed to end the abuse. (https://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf)  

Data from the U.S. Bureau of Labor Statistics indicates that 98 percent of all American businesses have less than 100 employees.  Moreover, the U.S. Census Bureau reports small businesses are responsible for more than 50 percent of GDP, 50.2 percent of private sector employment, 90 percent of exports and 90 percent of innovations. (http://www.bls.gov/bdm/table_g.txt)  

“Since President Obama was elected, unemployment has jumped from 7.6 to 9.1 percent, the price of a gallon of gas has sky rocketed, and we have lost 2.5 million jobs,” Chapman said. “It is clear President Obama’s policies are not working.  Ending the diversion of federal small business contracts to corporate giants would redirect more existing federal infrastructure spending to the middle class, and create more jobs than anything he has proposed so far.”