Feb

27

According to ADP data, all of the last two years' US job growth has come from businesses with fewer than 500 employees.

A useful stock screen? A comment on relative regulatory burden? A factor in outsourcing/ offshoring/ trade?

From Stefan Jovanovich:

In California, the regulatory burden begins with five employees. Once you get to 25, your reporting, regulatory and liability burdens as an employer in this state are the same as General Electric's. Status outsourcing - reducing the number of direct employees and using outside contractors instead (which are invariably privately-owned corporations with only a few hundred employees at most) - is probably a bigger factor now than overseas outsourcing.

Most of the publicly-held companies that do business in California now have explicit policies to reduce their overall employee head counts in the state. I suspect that quality improvement from the use of digital technology is also a factor - as Jim Lackey pointed out yesterday about cars. If your business uses computers and digitally controlled machinery and your people are smart, you can now produce more and better with fewer bodies.

In the dot.com boom even the large-cap Bay Area tech companies were hiring anyone who could pretend towards geekhood. Now they are limiting themselves to people who have computer science degrees and have (gasp!) actual work experience. The military services are going through the same transformation (part of the evil Rumsfeld's legacy). They are reducing overall numbers even as they increase the number of boots they can actually put on the ground.


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