January 3, 2012 (The Editor’s Desk is updated each business day.)
Job creation among small and large businesses
From September 1992 to December 2009, firms with fewer than 500 employees accounted for 64.9 percent of quarterly net employment change and an average share of total employment of 56.3 percent.
[Chart data]
In contrast, establishments with fewer than 500 employees accounted for 82.6 percent of quarterly net employment change from September 1992 to December 2009. The average share of total employment for these establishments was 81.7 percent.
Each cumulative size class represents the total percentage of employment that falls within or below the corresponding size class or classes. For all size classes, except the last (1 to 1,000 or more), the establishment’s cumulative size class contribution to net employment change exceeds the firm’s cumulative size class contribution. By definition, multiestablishment firms in any given size class are always composed of establishments from equal or smaller size classes. Therefore, the net employment change that is credited to a multiestablishment firm in a given size class is credited to establishments from equal or smaller size classes.
These data are from the Business Employment Dynamics (BED) program. An establishment is defined as an economic unit that produces goods or services, usually at a single physical location, and engaged in one or predominantly one activity. A firm is a legal business, either corporate or otherwise, and may consist of one establishment, a few establishments, or even a very large number of establishments. To learn more, see "Employment growth by size class: firm and establishment data" (PDF), by Sherry Dalton, Erik Friesenhahn, James Spletzer, and David Talan in the December 2011 issue of the Monthly Labor Review.
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