What Bernstein points out, however, is that while the majority of businesses are small--employing between 1 and 100 people--nearly two-thirds of employees are employed by large businesses. So, despite constituting roughly 80% of all businesses, firms that employ between 1 and 100 people only pay out only 30% of total payroll. That means that 20% of businesses account for approximately ~70% of payroll paid out.
I thought that this was an interesting statistic; it isn't necessarily counter intuitive, but it is a little surprising given the political weight given to the "small business." I decided to look at in employment in Chico, just to see if we matched this trend. I couldn't find a breakdown like the one Bernstein supplied specifically for Chico, but I did find one for Butte County. As you can see, we don't exactly match the national trend exactly, but we do follow it loosely. If I was able to find the data for employers that have between 100 and 500 employees, I think the data would look more similar to Bernstein's graph; unfortunately I could only find data for less than 500 employees, and more than 500 employees. Still I think the graph helps to make the point.
Even though small businesses far exceed the number of large businesses, not only in total number of businesses but also in payroll and total employment, the ratio for each is significantly less than that of larger businesses. In other words, each small business has "less bang for its buck." Small businesses comprise 88% of the total number of businesses, but account for only 61% of payroll and 57% of employment. I mean, that's common sense; large businesses employ more people per business and therefore pay more out.
What inspired me to write about this is, as has been the case with several of my previous posts, the Occupy Wall Street movement, among other things. One of the largest gripes of protesters is the excess power of corporations. I agree largely with that take on things. But I think it is important to keep in mind that these large businesses (and true, not all of them are the corporations being protested against) employ a lot of people. What I think is important to fight for, and what is largely being fought for, is the transformation of corporations. To want to eliminate them outright is unrealistic. What is realistic is to want to change their structure, make sure employees are treated well, and that they can easily unionize if they desire. Additionally, I think it's important that, even though large corporations employ a lot of people, their political power should be reigned in (some corporations do not exercise excessive power, however). What other specific transformations corporations should go under, I don't know exactly (with the exception of what I listed). Matt Taibbi, writer for Rolling Stone magazine, has a list of potential goals for the occupy movement that are generally related to excessively powerful corporations here.
Another inspiration for this post came from the political clout that small businesses seem to have. I understand that there a lot of them, but there aren't a huge number of people necessarily associated with them; that is to say they don't employee the majority of people and don't pay the majority of total payroll. I find that interesting. I suppose some of it could just be political rhetoric or political posturing. Taking the side of the "small guy" usually looks good. Whatever it is, small businesses seem to hold a special place in American's hearts, regardless of how much they actually comprise our job market.
Even though small businesses far exceed the number of large businesses, not only in total number of businesses but also in payroll and total employment, the ratio for each is significantly less than that of larger businesses. In other words, each small business has "less bang for its buck." Small businesses comprise 88% of the total number of businesses, but account for only 61% of payroll and 57% of employment. I mean, that's common sense; large businesses employ more people per business and therefore pay more out.
What inspired me to write about this is, as has been the case with several of my previous posts, the Occupy Wall Street movement, among other things. One of the largest gripes of protesters is the excess power of corporations. I agree largely with that take on things. But I think it is important to keep in mind that these large businesses (and true, not all of them are the corporations being protested against) employ a lot of people. What I think is important to fight for, and what is largely being fought for, is the transformation of corporations. To want to eliminate them outright is unrealistic. What is realistic is to want to change their structure, make sure employees are treated well, and that they can easily unionize if they desire. Additionally, I think it's important that, even though large corporations employ a lot of people, their political power should be reigned in (some corporations do not exercise excessive power, however). What other specific transformations corporations should go under, I don't know exactly (with the exception of what I listed). Matt Taibbi, writer for Rolling Stone magazine, has a list of potential goals for the occupy movement that are generally related to excessively powerful corporations here.
Another inspiration for this post came from the political clout that small businesses seem to have. I understand that there a lot of them, but there aren't a huge number of people necessarily associated with them; that is to say they don't employee the majority of people and don't pay the majority of total payroll. I find that interesting. I suppose some of it could just be political rhetoric or political posturing. Taking the side of the "small guy" usually looks good. Whatever it is, small businesses seem to hold a special place in American's hearts, regardless of how much they actually comprise our job market.
I understand your point; however, I have friends who are small business owners who are suffering mightily under the current economic downturn. Many of these small businesses rely on larger corporations to hire or patronize them, and currently many of the larger corporations are freezing spending and hiring of outside contractors. I think that there is a lot of political talk about supporting small business, but the reality does not match the talk. There was no bailout of small business, and not that much is being done to encourage large corporations to hire them. I am glad you posted a link to Matt Taibbi's article because his 5 point plan for reducing the power of corporations is the clearest and best I've seen.
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