Big business stepping up job creation

If someone asked you who employs more people - big businesses or small businesses - you’d probably reply small business.  That is the perception most of us have but it really isn’t quite that simple.

Every five years the U.S. Census Bureau collects data on the number of businesses, number of establishments, number of employees (full and part-time), annual payroll, cost of benefits and annual hours worked in each of 21 major industry sectors as a part of its Economic Census. They are incrementally releasing the 2012 Economic Census data as new reports are completed.

The Los Angeles Economic Development Corporation (LAEDC) has been reviewing the data and discovering some interesting facts.  For the sixth consecutive year, more than half of U.S. workers were employed by businesses with 500 or more employees.  The percentage of workers employed by big businesses is increasing and has since 2004 when it was 49.1 percent.

Of course, the employment data varies widely by sector.  In healthcare and social services, the largest U.S. employment sector, 54 percent of the jobs are with large businesses or organizations.   Jobs in retail sales and utilities are also dominated by big employers providing 64.1 percent and 82.6 percent of the total jobs respectively.

LAEDC found several business sectors that are populated primarily by medium, small or very small establishments.  These include personal services (85.8 percent), construction (83.3 percent), real estate and leasing (69.3 percent), arts, entertainment and recreation (63 percent), accommodations and food services (59.9 percent), wholesale trade (59.6 percent), and professional, scientific and technical services (59.5 percent).

Large employers - those with more than 500 positions - employ 51.6 percent of the workforce.  Medium size employers - those with 100 to 499 positions - employ 14.0 percent of the workforce.  Small employers - 20 to 99 positions - employ 16.7 percent while very small - fewer than 20 positions - employ 17.6 percent. 

In California, 50 percent of businesses have 500 or more employees just 1.6 percent fewer than the national average, with the remaining 50 percent of employment spread between medium, small and very small businesses.

Why do we usually associate more jobs with medium and small business? Probably because small business grows faster and are created more frequently than larger ones. Small businesses are often more innovative.   But they are also more vulnerable to economic swings and can lost jobs quickly. 

Still medium and small businesses are a critical part of our economy and they are producing new jobs for Southern California every day.

If you want like more information on jobs creation in Los Angeles County and the San Gabriel Valley, plan to attend the San Gabriel Valley Economic Partnership’s 2015 Economic Forecast on Tuesday April 21, 2015 at Pacific Palms Resort.  Dr. Robert Kleinhenz Chief Economist of the Kyser Center at LAEDC will provide the most recent data. More information is available at sgveconomicoutlook2015.eventbrite.com or www.valleyconnect.com