Jeff Horwich: When candidates are speaking at a mom & pop diner or a small manufacturing company, you will almost unfailingly hear this platitude: small businesses are the engines of growth in our economy. The conventional wisdom holds that these firms create the most jobs.
But here’s Marketplace’s Jeff Tyler with a little truth check.
Jeff Tyler: Does size matter? In the last few years, bigger companies created more jobs than smaller ones.
Ross DeVol is chief research officer at the Milken Institute.
Ross DeVol: We have seen larger firms account for disproportionate share of the increase in employment since the recession bottomed-out.
That’s unusual. DeVol says, historically, small businesses have created the majority of jobs. But ever since credit dried up during the recession, it’s been harder for little guys and start-ups to borrow money.
DeVol: Entrepreneurs have been really constrained in their ability to create jobs.
Others make a distinction based less on size. Robert Litan is vice president for research and policy at the Kauffman Foundation, which promotes entrepreneurship.
Robert Litan: It’s not small or big that matters. It’s young or old that matters.
He says new companies — firms that have been around for less than five years — account for the bulk of new jobs created in this country.
I’m Jeff Tyler for Marketplace.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?