Marketplace Logo Donate

Daily business news and economic stories from Marketplace

Small business creating few jobs

Subscribe to our Newsletters

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.

What's Next

Latest Episodes From Our Shows

5:04 PM PDT
3:55 PM PDT
1:43 PM PDT
7:13 AM PDT
Jun 7, 2023
Jun 1, 2023
May 30, 2023
Exit mobile version