Tuesday, June 9, 2015

What Share Work for Large Employers?

What proportion of Americans work for large employers? And how is that share changing over time? Anthony Caruso of the US Census Bureau presents some of the data in "Statistics of U.S. Businesses Employment and Payroll Summary: 2012," published in February 2015 (G12-SUSB).

The share of Americans working for large employers has been rising in recent years, and now more than half of Americans work for a "large" enterprise with more than 500 employees. In this table, "very small" means fewer than 20 employees, "small" means 20-99 employees, and "medium" means 100-299 employees. You can go to the website for this data source and look up data as far back as 1992, when the share of those working for a firm with more than 500 employees was 47%.

Caruso's report also offers a sectoral breakdown. The blue lines reaching left show how many workers are employed in a given industry by firms with less than 500 workers; the yellow lines reaching to the right show the number of those working for firms with more than 500 workers. Thus, when yellow lines are longer than blue lines, large employers are more important. The combined blue and yellow lines show how many workers are in a given industry.

I won't try here to explore various reason why large employers have become more prominent over time. Surely part of the reason is related to the fact that US business startups have been slowing down in recent decades, and a declining share of workers who are working for smaller and newer firms is of course the same as a rising share of workers at larger firms. But I will note one general advantage of larger firms: on average, they tend to pay better.

The data available in this report is just overall average pay per employee (that is, it's not a survey of the range of pay inside enterprises). But the tables show that in an enterprise with more than 500 employees, average pay per employee is $52,554; for a medium-sized enterprise with 100-499 employees, average pay per employee is $44,916; for a small-sized firm with 20-99 employees, average pay is $40,417; and for a very small firm of less than 20 employees, average pay per employee is $36,912.