Small Businesses NOT Big Net Job Creators
Small business – or at least the CFIB – consistently claim to be the big job creators in the economy. This has never been borne out by the available data on net job growth by firm size. And Statscan has now added to our knowledge by releasing a new paper and new CANSIM data today.
The paper looks at the 2001 to 2009 period and finds that employment shares by firm size in the private sector were largely stable, with a slight tilt to net growth in small firms with less than 50 employees. Â The share of both firms with less than 50 employees and firms with more than 500 employees grew modestly at the expense of medium sized firms over that period. (See CANSIMÂ 527-006.)
It is interesting, however, to discover that larger firms led in more recent years.
As shown in the Table below (from CANSIM 527-0006) showing data for 2005-09, net employment growth of firms with more than 500 employees exceeded the overall private sector net growth rate every year, as did net employment growth of firms with 100 to less than 500 employees except in the recession year of 2009.
|Employment flow rate||Firm size||2005||2006||2007||2008||2009|
|Net employment growth||Private sector||1.1||2.6||3.1||1.8||-3.2|
|Less than 5 employees||-8.8||-6.0||-2.9||-4.2||-10.2|
|5 to less than 20 employees||0.7||2.2||3.6||2.2||-0.8|
|20 to less than 50 employees||2.1||3.9||4.5||3.3||-2.7|
|50 to less than 100 employees||2.3||4.6||4.0||2.9||-3.9|
|100 to less than 500 employees||3.1||4.5||3.9||2.3||-4.1|
|500 employees or more||2.4||3.2||3.5||2.3||-1.9|