Are Most New Jobs Created By Small Businesses?

Not exactly. It turns out most new jobs are created by large firms (500+ employees). But as economist Jared Bernstein explains, some data series refer to the size of "establishments" which might be the local outlet for a large business, and some refer to "firms," in which employees of the local outlet would be included in the larger entity. Think, for example, Wal-Mart.

Bernstein explains: "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."

Neither Bernstein nor I have anything against small businesses, we just want the discussion and any resulting policy to reflect reality.