Thursday, July 19, 2012

Another thing you think you know... that isn't true

Jared Bernstein (see here) takes a close look at BLS data regarding firm size and job creation (see graph below, click to enlarge).


Bernstein says,

"So, the question is, do any of these size classes contribute disproportionately to job growth?  In fact, they do, and the winner is…not small firms.  Whether is business cycle expansions or the full run of these data, large firms — 500+ employees — contribute disproportionately to job growth.  The small firms — less than 50 workers — in fact, contribute proportionately less than their share."

As he explains in his post, the BLS looks at the data by firm size, while others (especially those who make the claim that small business contribute more to employment) do so by establishment size.  An an establishment can be "units of large firms."

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