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April 30, 2010

Who creates jobs?

There is an often-repeated statement that jobs are created primarily by small businesses. What do the numbers say about employees in different-sized firms?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"It is actually a very interesting pattern. Let's look at firms who have less than 100 workers -- that's really considered to be the standard for small business. If you look nationally, those firms with less than 100 workers employ 37 percent of all workers.

"But at the other end of the spectrum, this is where it is interesting: At the other end of the spectrum, firms with more than 2,500 workers -- those would be considered big firms -- they also employ 37 percent of the workers.

"So ... very small firms and very big firms are really the dominant employers. And then of course firms in the middle -- those would be firms that have between 100 and 2,500 employees -- they employ the rest, which comes out to be about 26 percent.

"Now actually another way of looking at it is if you take 500 workers as the dividing line -- firms with less than 500 workers, firms with more than 500 workers -- you exactly split the work force in half. Firms with less than 500 workers employ 50 percent of the workers. Firms with more than 500 workers also employ 50 percent of the workers."

Posted by deeshore at April 30, 2010 09:42 AM