from the all-jobs-are-not-the-same-either dept.
The Register has a report claiming that it is small and medium sized businesses that create jobs. While that is too sweeping a generalisation, it points out the problems regarding layoffs from both Microsoft and Hewlett-Packard because, the article claims, they have lost their way. From the article:
The recent news of layoffs from computing giants provides proof, once again, of an old economic saw. It's not actually big businesses that create jobs, it's the small and new ones that do.
Our problem is that we've a political class (yes, all of it) that doesn't really quite get this. They would like there to be lots of jobs, of course, but they think that the way to get them is to suck up to to give privileges to large extant employers instead of the people who actually do create jobs.
Microsoft is laying off 18,000 because they're not sure what they should be doing (other than indulging in corporate doubletalk that is). HP is going to lay off even more people because, err, they don't know what they should be doing either. And all of this really shouldn't be a surprise to observers of the scene economic. We expect big business to continually be shrinking its workforce. Perhaps not with quite this sort of vehemence but over time it's the standard assumption.
[....]
Each year the UK economy destroys some 3 million jobs. Yes, really, 10% of all jobs disappear each year. Some of this is bankruptcy of firms, some of it is technological advance (to the extent that the first isn't caused by the second). Each year the UK economy also creates some 3 million jobs. The change in unemployment is the balance between those destroyed and created numbers and what happens in recessions isn't that, particularly, more people get fired or more companies go bankrupt. It's that many fewer new firms start up, many fewer small ones expand. And it's that which produces the imbalance that leads to higher unemployment rolls. Not a greater destruction of extant jobs, but an absence of job creation.
While this might not seem to ring true to the many that are currently out of work and struggling to get by, the article does give more explanation and provides much food for thought. What do you Soylentils think?
(Score: 2) by The Mighty Buzzard on Wednesday July 23 2014, @10:51PM
I thought this was already fairly well accepted by anyone with half a brain.
At least here in the States, small businesses only, not medium, account for over half of the new jobs pretty much every year.
My rights don't end where your fear begins.
(Score: 1) by frojack on Wednesday July 23 2014, @11:01PM
Depends on the definition of small and medium business.
The SBA considers firms with fewer than 500 employees small, placing nearly every business in the country (99.7 percent of firms that have employees) under that umbrella term — thus, it is no surprise they employ the most workers.
A more strict definition of small business, using a limit of 50 employees, would still include the vast majority of the country’s businesses, but it would trim their share of the workforce to less than a third.
No, you are mistaken. I've always had this sig.
(Score: 0) by Anonymous Coward on Wednesday July 23 2014, @11:50PM
lol cut-n-paste plagiarist exposed by utf encoding error
http://www.washingtonpost.com/business/on-small-business/who-actually-creates-jobs-start-ups-small-businesses-or-big-corporations/2013/04/24/d373ef08-ac2b-11e2-a8b9-2a63d75b5459_story.html [washingtonpost.com]
(Score: 2) by The Mighty Buzzard on Thursday July 24 2014, @12:07AM
Yeah, look for that to cease happening come the 14.08.01 release.
My rights don't end where your fear begins.
(Score: 2) by frojack on Thursday July 24 2014, @07:36AM
Its fair use, not plagiarism. I don't bother to link sources to back up every truth, because there's always some smart-ass AC that won't accept any source anyone lists. Its pointless even talking to ACs.
No, you are mistaken. I've always had this sig.
(Score: 5, Interesting) by Thexalon on Thursday July 24 2014, @01:31AM
The reason for the wildly varying definition of "small business" is about propaganda: When you use the phrase "small business", most people think something along the lines of "Mike's Plumbing", with a working owner and a few employees who are either related to the owner or will soon be able to start small businesses of their own. What they don't think of is one that I worked for, which was a 250-employee corporation with 9-figure revenue.
The reason for this is that there are special rules in place to benefit small businesses, and the 250-employee corporations want in on that, so any definition of small business that includes Mike's Plumbing will be changed (for an appropriate fee) to include the 250-employee corporations. And if anyone tries to change that, for any reason, they will promptly say that they're trying to get rid of Mike's Plumbing and stay silent about the 250-employee corporation.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Thursday July 24 2014, @11:29AM
The trouble is that people have trouble with any categorization system greater than 3. So, small, medium, and large businesses are ok; but family, small, medium, large, and zaibatsu would be confusing. This means we're left trying to group entities together that range in size from a single owner-employee with $5,000 revenue to a million or more employees and $100,000,000,000 revenue. There's no good way to break 6-9 orders of magnitude into 3 groups.
A 250-employee company with $100,000,000 revenues is a small company by economic standards. It would fit in your local industrial park; probably in just one building. We ought to encourage the development and growth of companies that size, over the expansion of multinational monoliths; and we ought to protect those little guys from the megacorps who could crush the little guy using their lunch-time sales. Why? because the little guys are where the innovation happens and the big guys are where business-model protection happens. For the same reason, we should encourage and protect those owner-operator businesses from the small businesses that could crush them like bugs.
(Score: 4, Insightful) by Blackmoore on Wednesday July 23 2014, @11:11PM
What? Jefferson was right? TR was right?
Until large corporations are put back under the control of law (something that hasn't happened in the US since WWII) and forced to do more than buying out smaller companies we are going to see the same kind of job destruction year after year.
If the market was really built in a way that new companies could start up and compete, you really could see job growth, income growth, and more and more disruptive technologies. But hey, we cant do that - the money has a patent on all those ideas for the next 75 years..
(Score: 2, Insightful) by Anonymous Coward on Thursday July 24 2014, @04:48AM
in a way that new companies could start up and compete
We need to replace that Land of the free[1] and home of the brave[2] nonsense.
I suggest "We do anti-competitive better than anybody else."
Alternatively: "We're tops in mass firings."
[1] The whole place is supposed to be a free speech zone--not just designated areas enclosed by chain link fences.
[2] Remember when American weren't afraid of EVERYTHING?
-- gewg_
(Score: 0) by Anonymous Coward on Thursday July 24 2014, @11:45AM
No, actually, I can't say I remember a time when there wasn't a Terrorist Scare, a Drug Scare, a Red Scare, or an Anarchist Scare. I can't remember a time when the general public complained about there being too many murderers or muggers in prison and not enough released back into their neighborhood. I can't remember people ever protesting that the army was too powerful to defend our borders.
I do remember celebration and adulation for various idle rich going off on crazy adventures - flying solo across the Atlantic, going to see the North Pole, sending a private rocket to space... I remember stories of government hand-out programs that encouraged immigrants and the desperate poor to push the indigenous people out of the midwest. These things wouldn't be stories we keep telling if they weren't exceptions. You don't remember Americans being afraid of EVERYTHING for the same reason you don't remember whether it rained this day last year.
(Score: 2) by Phoenix666 on Thursday July 24 2014, @03:52PM
Hadn't you heard? "Land of the Free, Home of the Brave," has been replaced already. It was replaced about 14 years ago when Bush & Cheney founded the Department of Homeland Security. So it's a "Homeland" now, because "Fatherland" and "Motherland" were already taken, and they wanted to be be just as ominous, but in a different way, than the Nazis and Soviets had been.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Thursday July 24 2014, @09:09PM
but whenever I hear the word "homeland" I always thinks of Apartheid. The "homelands" where the rich white class stuffed the black peoples in south africa....
(Score: 2) by HiThere on Thursday July 24 2014, @08:23PM
The problem is that there are tasks that can only be tackled by companies larger than a certain size...what size depends on the task.
Personally, I think that the whole idea of a corporation needs redesigning. Corporations should have a charter that calls for them to tackle a specific problem, and gives them a limited time to do it. After than they should dissolve. The problems are:
0) Corporations should not be considered people.
1) avoiding malign incentives: The management must benefit most by solving the problem quickly, and be actually fined if they don't solve it within the alloted time.
2) rewarding the investors.
3) How do you tackle on-going tasks, like, say, teaching the new generation. I don't think corporations should be allowed to do that, but whatever kind of organization is set up to handle it needs to solve the problem of managers over time acting to benefit themselves at the expense of the investors. And I don't have a clear view of how to do that. (This problem is ONE of the reasons an ordinary corporation should have a limited lifetime.)
4) Even if a problem has a definite completion, how do you know ahead of time how long it will take? Whoops!
Perhaps small corporations could have an extended charter, say a century, with possible renewals if:
1) They continue go be small, and
2) They can demonstrate value to society, not just their stockholders.
But large corporations need to also be for special purposes, with a strictly limited lifetime. (Say 20 years maximum.)
N.B.: The limits on corporations don't apply to companies. But companies should still need to periodically prove that their existence is a net social benefit.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 4, Interesting) by prospectacle on Wednesday July 23 2014, @11:25PM
Given how much money you need to get elected in America it may be that the politicians don't believe for a second the big-business messages that they repeat and champion. They just want to be seen to be supporting the people who are able to support them.
What chance do the facts have under such a system?
If a plan isn't flexible it isn't realistic
(Score: 3, Interesting) by Thexalon on Thursday July 24 2014, @01:22AM
The size of the business isn't really what defines whether it creates jobs or not. What creates jobs is labor-intensive businesses, period.
For example, restaurant chains employ a relatively large number of people, because so much of what they do is service with a smile, and most customers would rather have their food served by a waitress than a robot. By contrast, manufacturers are rapidly shrinking their work force, because robotic manufacturers can make and assemble the same 600 parts in the exact same way 3 million times faster and cheaper than a human worker can.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Thursday July 24 2014, @11:59AM
You really do have to be a relatively large manufacturer before it makes sense to automate. Humans are just still too much more flexible than robots, so you can quickly and easily rearrange a single team of humans to make more and different things than a handful of robot/machines. The humans can adjust to variations in the work material or flow more easily. If you can't sell 1.2 trillion parts, it doesn't matter that the robot is 3 million times faster.
Maybe just as important: they humans only have to be paid as they go. It may be possible to replace a $50k/year human with a $200k robot, but if you don't have $200k, then you have to lease the robot, and your choice comes to replacing a $4k/month human with a $3k/month robot. You can lay off the human if business slows, but the lease has to be paid regardless.
(Score: 1) by Murdoc on Thursday July 24 2014, @09:45PM
(Score: 2) by tathra on Friday July 25 2014, @04:59AM
you forgot option c) kill the unemployed. personally i'm a fan of option b, but far too many people are still tied to forcing the idea of "work or die" on everyone. straight-out executing the unemployed would be far more humane that what we do today, forcing people who can't find work because the jobs don't exist to slowly starve to death since food assistance programs continue to be gutted and cut.
(Score: 2) by tibman on Thursday July 24 2014, @03:23AM
Probably people who helped start a previous small company that a large company bought for stupid money. The large company "fixes" their new acquisition and eliminates redundant positions. Eventually it rots and they don't make anything new. Just maintain the old and "trim the fat" until there is just bones left. A new company starts taking some of their clients and draws the attention of a large company.
SN won't survive on lurkers alone. Write comments.
(Score: 1) by SomeRandomGeek on Thursday July 24 2014, @04:39AM
The businesses that create most new jobs are difficult to categorize as small, medium, or large. A better description would be startups.
Think of Microsoft in the early 80s, or Amazon in the late 90s. These businesses start small, but rapidly become very large. And in between, guess what? They create lots of jobs.
Businesses that can be unambiguously categorized as small businesses, like pizza shops for example, do not actually create a lot of jobs.
So, as far as policies to encourage job growth are concerned, those targeted at small business and those targeted at large business both miss the mark. Policies to encourage job growth should be targeted at startups.
Of course, startups also destroy the most jobs...
(Score: 4, Interesting) by PizzaRollPlinkett on Thursday July 24 2014, @11:17AM
I think what's wrong in America with jobs is the professional management class took over corporations in the past decade or two, which was a big generational change. These are people who learned management in college, have MBAs, and have never done anything but manage. They have no real-world experience actually doing anything. All they know is how to manage by spreadsheets. Their decisions seem to always be from short-term thinking, and against the best interests of their organizations and society itself.
As simply as I can put it, the professional management class can't create anything. All they can do is ruin companies, fire people, and so on. They know how to reduce costs. They know how to do mergers and buyouts. But they can't do anything creative that adds new value to the world. When they try to be creative, you get things like Windows 8, a disaster that can only come from professional managers.
With technology companies, the professional management class is clueless, because technological innovation is not fungible. Management sees programmers as fungible. This means they order them by a specifications checklist of the skills they need. Just like you would buy a cookout grill at Wal-Mart or Lowes by looking at the features. As fungible commodities, management wants the cheapest ones. So you have companies like HP, IBM, etc going down the tubes almost completely because of professional managers running them.
I could write a whole book on this topic. But I won't.
(E-mail me if you want a pizza roll!)
(Score: 2) by kaszz on Thursday July 24 2014, @01:03PM
I can see the new book title: "Management by spreadsheets - or how to maintain low costs until you don't exist" .. ;-)
(Score: 2) by Immerman on Thursday July 24 2014, @02:47PM
See this is why they have editors, that should be:
"Management by spreadsheets - or how to take home obscene bonuses while maintaining low costs until your company doesn't exist"
(Score: 2) by Phoenix666 on Thursday July 24 2014, @03:58PM
Yet you ought to write a book on it, because what you're saying is exactly correct. Moreover, we not only have the professional managers you describe who are driving companies into the ground, but the politicians they pay to enable them and cover their moves with the public. So one deleterious dynamic begets another, which then work in tandem to destroy the rest of us and the world we live in.
The only comforting thought is that it is not a self-sustaining system, but one that recursively destroys itself; so those responsible will eventually pay the price.
Washington DC delenda est.
(Score: 2) by DeathMonkey on Thursday July 24 2014, @05:38PM
I'm no fan of Microsoft but they are estimated to employ 94,000 people.
Of course nobody wants to see people laid off. However, 94,000-18,000 = 76,000 jobs.
So I guess if you ignore 76k jobs, MS doesn't create any jobs.
reference [reference.com]
(Score: 0) by Anonymous Coward on Thursday July 24 2014, @08:53PM
my first thought was "those evil huge businesses" but then.. (well they still are but of other reasons)
...I thought well, isn't that a good thing?
that humankind need less amount of working hours to get the stuff we need to be done, done?
We should be happy if there is less work - that means there is more free time, more human time to think about how to solve Earths problems for example. And I can assure you there is no lack of those. And not only environment problems, but how to decouple the consumption ability from the work perhaps, and how to distribute the work that sadly still must be done in other more even ways.