Small Business Jobs Are Vanishing as Mom and Pop Shops Fight for Survival

NEW YORK, NY — The "lifeblood" of the American economy is struggling to keep a pulse. For Shirley Modlin, who started 3D Design and Manufacturing in her Virginia garage 20 years ago, the dream of small business ownership has turned into a nightly battle with insomnia.

Facing component delays and price hikes of up to 400 percent which she attributes to tariffs, Modlin is now 90 days behind on vendor payments.

“Everything is delayed or high-priced. The customer is screaming. It’s killing us,” Modlin told CNN. “I am trying to stay alive. I can’t sleep at night.”

A Year of Consecutive Job Losses

The struggle isn't isolated. Small businesses with fewer than 10 employees have cut jobs for 13 months in a row, according to a new analysis by the Democratic staff at the US Congress Joint Economic Committee.

Data from the Intuit QuickBooks Small Business Index reveals a stark reality:

• 2025 Losses: Mom-and-pop shops slashed 292,200 jobs last year alone.

• Comparison: This figure is more than triple the 87,800 jobs lost in 2024.

• Pandemic vs. Now: Smallest firms cut four times more jobs in 2025 than they did during the height of the 2020 pandemic.

While different metrics from ADP show growth in "small" businesses employing up to 19 people, the very smallest "micro-businesses" are bearing the brunt of the current economic volatility.

The "Muddy Pile" of Economic Pressures

Business owners across the country cite a confluence of factors that are making operation nearly impossible. In California, Trevor Frampton, owner of a pet supply store, says his customers are "buying down" or buying less, leaving him with no choice but to consider a reduction in force for the first time in a decade.

The primary pressure points include:

• Tariff Volatility: Supreme Court battles over global tariffs have left manufacturers unable to predict costs.

• Energy Spikes: As the war in the Middle East lingers, diesel has surged to 7 dollars a gallon, crippling transportation-heavy sectors.

• Industry Specifics: Retail (-41,700), manufacturing (-38,600), and construction (-17,700) have seen the most aggressive layoffs since April 2025.

Policy vs. Reality on Main Street

The Trump administration continues to tout the benefits of the Working Families Tax Cut, which made small business deductions permanent and allowed for 100 percent expensing of equipment. During a National Small Business Week event, President Trump hailed these efforts as "making America great again" by cutting red tape.

White House spokeswoman Taylor Rogers stressed that the administration has eliminated more than 110 billion dollars in regulatory costs.

However, for Jaja Chen, who owns three tea cafes in Texas, the margins are too thin to absorb the costs. Even with policies like the "no tax on tips" provision helping her employees, the cost of ingredients like Japanese matcha continues to skyrocket.

"Restaurant profit margins are already so low—often under 10 percent—that any kind of tariff or inflation can be make-or-break," Chen said.

As the unpredictability of the global economy continues to squeeze local owners, many are calling for Washington to end what they describe as "game-playing" with trade and energy policies. For thousands of owners like Modlin, the stakes aren't political—they are existential.

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