ADP January Unemployment Stats indicate Small Business Job Loss


By Prof. Samuel D. Bornstein, the author of the NASE Survey


The unemployment statistics issued today by ADP confirm my research that small businesses will shed millions of jobs beginning in the 4th quarter 2008 through 2012. This is due to the fact that they fell prey to the “Toxic” mortgages that are resetting at this time. Unfortunately, there is more to come.  These resets will precipitate the 2nd “Tsunami” Wave of Foreclosures which will take Alt-A, Option ARMS, etc. the “Toxic” mortgages.

Many fail to realize that there are millions of self-employed small businesses, who employ from 1-10 employees, that are holding these mortgages. Many experts believe that this will constitute the 2nd Wave of Foreclosures that will dwarf the Subprime Mortgage Crisis. The tragic aspect is that these borrowers are Prime and Near-Prime borrowers who hold ALT-A, Option ARMs, Interest-Only mortgages. There are $1 Trillion ALT-As, and $500-600 Billion Option ARMs.

So, here we have a major problem… Not only will these small business owners lose their homes, but there will be the resulting JOB LOSSES on their business failure. Note, although President-Elect Obama is stressing the need to create 3 million new jobs, we must understand that “JOB RETENTION IS AS IMPORTANT AS JOB CREATION”.

A NASE Survey sheds light on this critical issue. The NASE survey is at   

According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other toxic mortgages, and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected Resets that are scheduled to begin in 4th Quarter 2008 through 2012.  

Samuel D. Bornstein is Professor of Accounting & Taxation at Kean University, School of Business, Union, NJ

Tel: (732) 493 – 4799


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