Michael Lind has an interesting post on why we need to have both Big Government and Big Business as they’re absolutely necessary for our economy to function properly. I don’t have much to add to his overall points (which I mostly agree with), but I was taken aback by this claim:
It is true that 99 percent of Americans work for small businesses. But this is only because the federal government defines a small business as one with fewer than 500 employees. How many ordinary people think of a company with 499 employees as small?
Even with that loose definition, I had trouble believing that only 1% of the American workforce works for a company with more than 500 employees. The total American workforce is roughly 150 million. That would mean that only 1.5 million would work for large companies. From Wal-Mart’s website:
At the end of fiscal year 2010, Walmart and its subsidiaries employed over 2 million associates worldwide, with approximately 1.4 million associates in the United States.
Maybe those subsidiaries are considered “small businesses” and therefore not all of the 1.4 million count towards that figure. But McDonald’s still employs over 500,000. Doing some more searching, I found this census page which says that 56 million people worked for businesses with 500 people or more, so I’m at a complete loss as to where that figure comes from.
UDPATE: As was pointed out in the comments, each McDonald’s franchise is counted as a “small business”, so it’s not clear if all of those employees count in the 1%, although I’d question defining it that way. Either way, the census figures certainly don’t match up, and if the difference comes from how franchises are counted, that doesn’t really square with the perception of companies like Starbucks and McDonald’s, which few would exclude from the definition of big business.
UPDATE 2: Well, it looks like Lind corrected his post:
It is true that 99 percent of American firms are defined as small businesses. But this is only because the federal government defines a small business as one with fewer than 500 employees. How many ordinary people think of a company with 499 employees as small?
Quite a difference. And my earlier update appears to be incorrect. A McDonald’s franchise isn’t considered a small business in this record-keeping.