Small businesses gain ground; employ over 50% of private-sector workers
Reversing a long-term trend, small businesses are
taking a growing share of U.S. employment. Small firms employed
50.9% of private-sector workers in 2004, up from 50.7% in 2003,
according to the latest government data. It was the
third-consecutive year of small firms gaining, and followed nearly
uninterrupted annual increases by big employers since 1988, according to the Small
Business Administration data. (via USA
Today)
As more Americans work for small firms, however,
they are less likely to get medical coverage and other benefits such as
retirement plans, because small firms are less likely to offer those
benefits. For example, 60% of companies with three to 199
workers offered health benefits this year vs. 98% of those with 200 or
more workers, says the Kaiser Family Foundation.
Driving the employment trend:
- Big companies — defined by the SBA as those with 500 or more employees — are more likely than small businesses to shed workers during recessions and slow-growth economies.
- Big corporations are more likely to be in manufacturing, a sector ripe for replacing workers with automation through investments in technology.
- Small companies are often in service industries such as consulting and health care, fields that require workers rather than machinery
- Planned job cuts, especially in the automotive industry, soared 54%, to 100,315, last month from August, according to outplacement firm Challenger Gray & Christmas.
CEOs of Fortune 500 companies have grown more pessimistic about hiring, according to the Business Roundtable's most recent quarterly survey. 32% of CEOs said they expected U.S. employment would be higher in the next six months, down from 41% in the previous survey.
