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The Honolulu Advertiser
Posted on: Wednesday, March 20, 2002

Big businesses now dominate job market

By Jim Hopkins
USA Today

SAN FRANCISCO — For the first time, big businesses appear to employ more U.S. workers than small businesses.

Big companies employed 49.7 percent of the 111 million U.S. workers in 1999 — up from 45.5 percent in 1988, the latest U.S. Small Business Administration data show. The share of the work force employed by big companies probably passed 50 percent in 2000, the SBA says.

The SBA defines big firms as those with 500 or more workers. Experts say the shift toward big companies is likely to continue as the U.S. economy matures and consolidates.

"The general trends are in place," says economist Mark Zandi with Economy.com.

The shift will have a big impact on employees. As more people work for big companies, more will have health insurance. About 82 percent of big employers offer health insurance vs. 68 percent of small firms, says the Employee Benefit Research Institute.

Also, only 46 percent of employees at small companies have retirement plans vs. 79 percent of employees at bigger companies, EBRI says. As more employees work for big companies, more are likely to have those plans.

Certainly, small firms still have clout. They create 75 percent of all new jobs. They are one of the most powerful political lobbies in Washington. About 89 percent of the nation's 5.6 million employers have fewer than 20 workers.

But big firms are moving up as industries consolidate.

The nearly 17,000 big companies have about 55 million employees. The retail sector consolidated more than any other in the 1990s. The prime example: Wal-Mart last year became the USA's biggest company based on revenue. Its 1 million U.S. employees make it the nation's single-biggest private-sector employer.