Large Companies Hiring, Small Companies Not; Federal Hiring Strong, States Cutting Back; Proposed Solutions; Bright Side of Fed Policies

A recent Gallup survey suggests Larger U.S. Companies Are Hiring; Smallest Are Not

Gallup finds that larger companies are hiring more workers while the smallest businesses are shedding jobs. More than 4 in 10 employees (42%) at workplaces with at least 1,000 employees reported during the week ending Nov. 14 that their company was hiring, while 22% said their employer was letting people go. At the other extreme, 9% of workers in businesses with fewer than 10 employees said their employer was hiring, and 16% said their employer was letting people go.



This Gallup question about company size is new, so it is unclear whether this pattern is a continuation of, or a change from, the past.

Hiring Also Much Higher at the Federal Government



The federal government is hiring more employees than it is letting go, while the opposite is true for state and local governments. More than 4 in 10 federal employees (42%) say their organizations are adding people and 21% say they are letting workers go. In contrast, state and local government employees report a net loss of workers.

Pitfalls, Flaws, Observations

There are huge flaws in the survey as well as a potential for additional flaws in analyzing the survey results. Nonetheless there are some important observations that can be made.

For starters, it is nice to see large corporations hiring, but there is no indication of by how much. Is the total headcount hiring 1 or hiring 2,000? Is the number up or down from last month?

Compounding that lack of information, we have seasonal flaws. Many retailers are now ramping up hiring for the Christmas season. So... is the hiring temporary or permanent?

The survey does not say. Moreover it does not say why they are hiring. Is business expanding or is this a short-term need?

That aside, the survey is not useless by any means. If this expansion was getting stronger, the number of companies hiring would be going up. It is not. Worse yet, small businesses which are the lifeblood of job creation, have not participated in the hiring increase at all.

Small Businesses and Startups Key to Job Creation

For the past 3-4 years I have participated in panel discussions at the Kauffman Foundation regarding creation of small businesses. Every year I stress the same thing, yet Congress inevitably chooses a different path.

A recent Kauffman Foundation reports shows the importance of startups and small businesses in terms of overall job growth. The results may surprise you if you have not yet seen the results.

Please consider Bleak Outlook for Small Businesses and Job Creation; Where Obama Went Wrong, and What to do About It.

I propose my solutions for this economic mess in the above link. Please read if you have not yet done so.

Little Improvement in Small Business Sentiment

In light of rampant overcapacity relative to demand, rising health care costs, rising commodity prices with inability to pass those costs on to consumers because of weak demand it should be no wonder small businesses are nit hiring.

Yet, the Fed's Quantitative Easing solution has done nothing but raise commodity prices, putting a further squeeze on small business.

Bernanke's policies are a disaster on small business, but hey look at the bright side: Bernanke is bailing out Wall Street and the banks, on the backs of the average Joe. Wall Street bonuses will rise again.

Sadly, that is the only "bright side" to the policies of this Fed.

For more on the plight of small businesses, please see NFIB Report Shows Lack of Sales Still #1 Problem of Small Businesses, Inflation Barely Registers

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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