Does small business "drive the economy"?

[fishbob]

"Sales" are almost always denominated in dollars, not in units. Pick up a prospectus for your local supermarket chain or something. They won't say "we sold a hundred thirty million items"; they will say instead "we had $73 million in sales."

So my bet is that 51% in sales represents exactly 51% of the gross revenue.

You're right, of course, that salaries at small businesses tend to be smaller than at large ones, so 52% of the workforce probably represents less (maybe much less) than 50% of the payroll, but I don't have any stats to back that up.

That is my heartburn with the stats as presented - they stats are in units insted of dollars.

I would take your bet. Simple example:

If I build $500 of widgets for GE with 2 guys, then they have 2 guys install them in washing machines worth $1500, I have $500 in revenue and GE has $1500 in revenue. Each with 50% of the labor, GE with 75% ($1500/$2000) of the revenue.

 

[drkitten]

That is my heartburn with the stats as presented - they stats are in units insted of dollars.

Huh? Re-read the page I cited. It does NOT give stats in units.

I would take your bet. Simple example:

If I build $500 of widgets for GE with 2 guys, then they have 2 guys install them in washing machines worth $1500, I have $500 in revenue and GE has $1500 in revenue. Each with 50% of the labor, GE with 75% ($1500/$2000) of the revenue.

Wow. Interesting washing machines you're talking about. Apparently it only takes one component to make a washing machine?

I'm not even sure what point you're trying to make here. Most of the parts that go into a GE washer were not manufactured by GE, and most of them, in turn, were made by small business. The idea that GE puts only $500 of parts into a $1500 washer is ludicrous -- I have no idea where you pulled those numbers out of, but they don't illustrate much of anything.


If you don't like that source, I have others :

Small firms: Create more than 50 percent of nonfarm private gross domestic product (GDP).

Small businesses [...] and provide half of the nation’s nonfarm, private real gross domestic product (GDP)

American small business produces roughly one-half of the privately generated GDP in the country, a figure unchanged since the 1970s (Source: Joel Popkin and Company, Small Business Share of Economic Growth, 2001, Office of Advocacy, U.S. Small Business Administration.) That makes American small business the world’s third largest economy, trailing only the United States as a whole and Japan.

 

[casebro]

The economy is nothing more or less than money going in big circles.

Spur the big business, everybody gains. (Automaker's bailout, cash for clunkers)

Spur the banks, ditto.

Spur the individuals, ditto. ($300 each sound familiar?)

Spur the little business, everybody gains.

I guess it's small business's turn now?