Increasing self-employment is, alas, not the answer

less than a year ago,the definition of PYME (small & medium companies) in Spain was less than 50 employees…nowadays is less than 250 employees…you can imagine how many big corporations do we have in Spain: only a few of them, because most companies have 249 employees or less, with all financial benefits included in being PYME

Real-World Economics Review Blog

One of the marked characteristics of the last 150 years of economic development is the rise of the large firm. In the days of Adam Smith, a company with 10 employees was already quite large. Toady, a company like Foxconn, which assembles your Iphone, has (about) 1,6 million employees, Walmart has 2,1 million and McDonalds has 1,9 million. Together, the last two companies have more employees than the USA army. A ‘Coasian’ view of this development is that, for some reason or another, large bureaucratic planning systems enable firms to profit from economics of scale (branding, outsizing unions, production) in increasingly global markets characterized by increasing commoditization. Consistent with the rise of these mega-companies, high numbers of ‘self-employed’ seem to characterize economies with relatively low levels of income.

In the European Union, increasing the number ‘self-employed’ is often seen as a method to make labour markets more flexible and…

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