May 26, 2003
America is Big Business

Over 1/2 of US employment is in firms with at least 500 employees, and 2/3 is in firms with at least 100 employees. Is this what politicians are referring to when they refer to "small business" being the "engine of American employment?" Of course, some big businesses were once small businesses, but I have a hunch that most employment growth is also in big business; the big companies are the ones that stick around, while it's the little guys that have such a failure rate. And, in fact, US employment has only become more concentrated in large employers over the past decade.

So perhaps political rhetoric, and policy, should match with reality. Big business is where the jobs are.

Posted by ethan at May 26, 2003 09:11 PM

It is rational that the people or organizations that are most effective at deploying capital would have the most employees.

If we really want to create jobs and find the true maximal level of employment in the economy, then we are obliged to find a way to take money away from the most efficient producers in the economy.

I propose that we add a layer of taxation, which I will call a "corporate" tax, on the profits of the collective efforts of a group of like minded individuals.

In this way, by discouraging people from pooling their capital in search of a more productive output, we will induce a lower than normal ceiling on maximal employment, thus creating the need for agencies to look out for these underemployed people.

One way we could put these unemployed people to work is by mandating the use of labor-intensive ethanol fuel in all gasoline sold in the country.

In this manner we could transfer money from a more productive to a less productive part of the economy, creating what Lewis et al have termed a "dynamic tension" of artificially produced employment and unemployment.

Posted by: Cary Lewis on June 8, 2003 11:40 AM
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