A new study contends the Tucson area is among the worst in the nation in which to work for a small business.
According to the financial advice firm WalletHub, Pima County has a relatively low number of small firms — those with 250 or fewer employees — on a per capita basis compared with the 99 other largest metro areas in the nation.
But that’s only part of the picture that resulted in the area being ranked No. 92 lowest out of 100.
WalletHub staffer Jill Gonzalez said the number of small businesses in the area shrank by more than 8 percent between 2007 and 2013, more than most other areas. And while there was some growth in the last year it amounted to less than two-tenths of a percent.
Earnings for those working for small firms were far below average for similar-size companies in other communities, even after adjusting for the cost of living.
What really tanked the Tucson area in the ratings, though, was when WalletHub looked at the percentage of small businesses that provide health insurance to their workers.
In that category, Tucson was at the very bottom, with fewer than one in four firms providing these benefits.
“Your employees are going to be leaving if they know they can get benefits — and better benefits — elsewhere,” Gonzalez said. “And I think that leads to then small businesses shutting down if they keep on losing these employees.”
Steve Juhan, whose family rents commercial space to small businesses, said he has personally seen what has happened.
Juhan, owner of Legacy Business Properties, said he used to get one call a day from a firm looking for space. Then the growth just stopped.
“Now you’re lucky if you get a call once a year,” he said.
The result is that rents he can demand have stagnated.
The “why” behind that, said Juhan, is more complicated. But he thinks that in the last two decades the Phoenix area has become a far more attractive place for people to set up shop than Tucson. Among other reasons, “It just has better curb appeal,” he said.
In putting Tucson at No. 92 on the list, WalletHub took some other factors into account that may be beyond the control of the employers.
Most notable is that the population of the Tucson area is expected to grow by less than 48 percent by 2042. That figure is an indicator of opportunities for people to find jobs in small firms.
By contrast, WalletHub predicts the Phoenix metro area will post an 88.4 percent growth over the same period, the fifth fastest in the nation.