When it comes to defining a small business, most of us think really small. And we would be right. How a small business is defined makes a big difference. Using one set of standards, a small business would have no more than four employees, while in another set, 500 employees is the threshold.
A new report from the Congressional Research Service presents data for non-farm employers for 2019, with several data points broken down by number of employees. The report is titled “Small Firm Size Standards: A Historical Analysis of Contemporary Problems. “
The following table presents summary data on the number of US businesses broken down by number of employees. Data on the U.S. self-employed was not included because it was not available for 2019. In 2018, 26.49 million Americans were self-employed.
|Number of employees / company||Number of companies||Cumulative percentage of total companies||Total employment||Cumulative percentage of total employment||Annual pay||Cumulative percentage of payroll|
|0–4||3,556,927||61.6%||5,632,339||4.3%||$ 283.5 billion||3.4%|
|5–9||959 641||78.3%||6,329,828||9.3%||$ 257.6 billion||7.5%|
|10–19||609,355||88.8%||8 211 284||15.7%||$ 347.8 billion||12.3%|
|20–99||532,972||98.0%||20 893 780||31.8%||$ 960.9 billion||25.6%|
|100-499||92,159||99.6%||18 235 627||46.0%||$ 1.01 trillion||39.5%|
|500+||20,256||100.0%||69 695 369||100.0%||$ 4.4 trillion||100.0%|
|Total||5,771,290||128 898 227||$ 7.23 trillion|
We note a few notable data points:
- Over 60% of all US businesses have four or fewer employees.
- Barely 0.4% of all businesses have more than 500 employees.
- The largest companies employ 54% of Americans.
- The largest companies pay 60.5% of all US wages.
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