How to get America back to work is the subject of hot debate. There is near universal agreement that more jobs must be created if the U.S. economy is going to continue to recover but little consensus on the best way to accomplish this goal.
As we continue our review of America’s job-creation triumvirate — small businesses, entrepreneurs and big business — a surprising new leader is emerging that is taking us back to our roots to propel America into the future.
But before we talk about that, it is important to delve more deeply into the pros and cons of using big business as the country’s primary job growth generator.
- As noted in a recent Washington Post article and our previous post, big business represents a miniscule percentage of all U.S. employers (just 0.3%); yet large corporations create 1 in 3 jobs. Over the last 20 years, big business (defined as companies with 500 or more employees) has created 65% of new jobs, even though they employ only 45% of America’s total work force. Large corporations are also more likely than small businesses or entrepreneurs to create jobs with higher salaries.Given that track record, you’d think the feds would be bending over backwards to provide big business with huge incentives to promote job growth, but there’s a catch. Over the past decade, big business has been shifting job creation overseas to take advantage of low labor costs and proximity to emerging markets. According to the post, large corporations now have more than twice as many workers overseas as they do in the U.S.Critics also accuse big business of losing its innovative edge. Small businesses now create 16 more patents than their larger peers. Even more telling is that the kind of innovation accomplished by small businesses is more likely to result in job creation.
Next time: Back to the Future