U.S. Family Businesses Lose Upward Mobility as 25% of Firms Face Rising Costs
Updated
Updated · CNBC · Jun 18
U.S. Family Businesses Lose Upward Mobility as 25% of Firms Face Rising Costs
1 articles · Updated · CNBC · Jun 18
Summary
Multi-generational U.S. business owners say their companies no longer lift families beyond their parents’ standard of living, even when the businesses remain profitable or survive into a fourth or fifth generation.
Rising costs, inflation, customer belt-tightening and tougher competition are squeezing that mobility: one New York factory’s rent climbed to about $15,000 a month from $420 in 1965, while Arizona’s minimum wage rose to $15.50 from $6.75 in 2007.
Examples span industries: a 1910 Georgia funeral home now watches spending closely, a 110-year-old fabric flower maker says income buys less than it did for the prior generation, and an Arizona restaurant chain has shrunk to two locations from eight.
Family businesses still matter broadly—more than a quarter of U.S. firms were family-owned in 2021, and nearly a third of active family businesses have passed controlling ownership to the next generation.
The strain fits a wider decline in U.S. mobility: Opportunity Insights found 90% of children born in 1940 out-earned their parents, versus about 50% of children today, raising questions about entrepreneurship as a path to the American Dream.