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Old 12-20-2012, 12:41 AM
 
4,173 posts, read 3,121,140 times
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Small business comes up a lot these days as an engine of growth and job creation. I did a little research to see what I could find. Not meant to be a criticism of any kind, just food for thought.

The link below provides a little clarification on what is a "small business" and their role in job creation. It would appear there is much more than meets the eye to that subject.

A few quotes for those who might not click the link:

"small businesses destroy almost as many jobs as they create"

"The U.S. Small Business Administration counts companies with as much as $35.5 million in sales and 1,500 employees, depending on the industry"

"These “pass-through” entities include sole proprietorships, partnerships, limited liability companies and S corporations. Some of them are very profitable, but a large number aren’t what most of us would consider a small business, such as a dry cleaner or coffee shop"

"many businesses counted as small aren’t engaged in traditional small-business activity. Instead, they are partners in hedge funds, law firms and private-equity shops, or they are highly paid actors, athletes, speakers and authors"

"recent economic research shows that small companies play no greater role in job creation than large ones do. What matters more is age: New businesses account for the biggest share of job gains. Those companies tend to be small yet unprofitable."

Small Business Is Not a Job Engine - Bloomberg

Last edited by shaker281; 12-20-2012 at 01:06 AM..
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Old 12-22-2012, 10:49 AM
 
1,711 posts, read 1,819,725 times
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This article and "study" looks like it was funded directly by the fortune 500. Let's throw all our small businesses away and go to work at Exxon and Walmart!
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Old 12-22-2012, 10:56 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,116 posts, read 60,137,568 times
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I had a small business and employed 1-4 people at any given time over 17 years, mostly college students. That meant turnover as they graduated but they might have otherwise not gotten the good experience for their future careers. Multiply that times the number of small businesses and that's a lot of people that benefit. The downside is that working for a small business as a career is less secure, as they are more likely to let someone go during lean times. I would not consider them so much an "engine for growth" as a ladder to opportunity.
Of course, when the government definition of small business includes those with 20 million in profits and 1,500 employees, they may not really be small and those at the high end of the range that have been around a while could be just as good for a career as large businesses that pay minimum wage or not much more.
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Old 12-22-2012, 03:33 PM
 
Location: The Triad (NC)
31,168 posts, read 68,032,467 times
Reputation: 37003
Quote:
Originally Posted by shaker281 View Post
"The U.S. Small Business Administration counts companies with as much as $35.5 million
in sales and 1,500 employees, depending on the industry"

which is patently absurd and is the case only because of lobbying efforts

"...but a large number aren’t what most of us would consider a small business,
such as a dry cleaner or coffee shop"

if a dry cleaner or coffee shop isn't a small business pray tell... what would be?

"many businesses counted as small aren’t engaged in traditional small-business activity.
Instead, they are partners in hedge funds, law firms and private-equity shops, or they are
highly paid actors, athletes, speakers and authors"

an interesting point. (I suppose they were bound to have at least one)

"recent economic research shows that small companies play no greater role in job creation than
large ones do. What matters more is age: New businesses account for the biggest share of job gains.
Those companies tend to be small yet unprofitable."

These are essentially the same points raised in the first statement:
"small businesses destroy almost as many jobs as they create"
Having a new plumbing contractor in town isn't going to create more broken toilets.

The classic "responsible party" in this is that same large company and it's wage structure.
Ego alone accounts for a lot... but is far from the only motivator.
My largest criticism against the actually small business is that most are just an exercise in buying
the owner a job and using funds they can rarely afford to put at risk; and as mentioned doesn't have
them doing that wasn't already being done by someone as an employee elsewhere.
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