Nums: Do big companies or small companies create more jobs?”

Bit of a trick question since the constant refrain is that small companies are the ones that generate job growth.

According to a Business Week analysis of ADP National Employment data …

Since the U.S. economic recovery began in june 2009, big employers have increased employment 7.5%, while small employers have boosted payrolls only 4.9%.


Mark Zandi, chief economist of Moody’s Analytics, was on the McCain team in 2008 but has changed sides and now regularly advocates for the Administration of TV.

He says: that there are three explanations for why large employers (1,000 employees and up) grew faster than small ones (fewer than 50 workers).

  • Many hard hit construction companies are small and aren’t hiring – they are  struggling to stay afloat.
  • The credit crunch hit small companies hardest … they’re only now able to get loans.
  • Big companies are more internationally focused and have been able to capitalize on the decline of the dollar

Note: not a whisper about ObamaCare.

Curious since CNBC is coincidentally running pieces about how ObamaCare is stifling hiring.

Many folks think that the ObamaCare mandate that companies provide healthcare insurance or pay a fine only applies to companies with 50 or more full-time employees who work 30 hours or more per week. The so-called 50-30 rule.

So, there is widespread conjecture that small companies would simply cap their full-time payroll at 50 employees and then add part-timers to meet their needs … avoiding the clutches of ObamaCare.

Turns out that the law is based on full-time equivalents … not full-time employees.

Part-timers count as fractional full-time employees depending on the number of hours worked.

It’s called the “aggregation rule”.

So, for example, a company would be pushed into ObamaCare territory if it had, say, 30 full-time employees and 41 part-timers working 20 hours per week.

According to CNBC, many small employers have just found out what’s in the bill and have put the brakes on hiring – either full-timers or part-timers.

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