Small is Bountiful: Labor Markets and Establishment Size

Abstract

Although there exist no detailed published studies on trends in workplace size, most research in stratification and industrial sociology has operated with the implicit assumption that, in the course of the twentieth century, workers have found themselves in increasingly larger establishments. This assumption has focused considerable attention on such concomitants of the assumed increase as growth in bureaucratic control and internal labor markets. This paper gives thefirst systematic empirical account of the evolution of workplace size, and presents results that call into question the appropriateness of the current allocation of research energy. It is suggested that far more attention be paid to analysis of small firms and establishments. It is well known that one of the major changes in the organization of work during the twentieth century has been the shift from small to large employers. In Contested Terrain, Edwards (1979:vii) notes that seventy-five or a hundred years ago, nearly all employees worked for small firms, while today large numbers toil for the giant corporations. From the theory of segmented labor markets we know that the internal labor market in the large company has become an increasingly standard locale for intragenerational mobility, and that, as Thurow points out, the need for on-the-job training leads employers to eliminate competition for jobs among those who must train one another; the net result is the formation of a series of internal labor markets with limited ports of entry (Thurow, 1975:85-86). Dunlop (1966:32) observes, in a similar vein, that for the typical enterprise, hiring-in jobs are only a small fraction of the total number of job classifications. The forces that have brought about this transformation of the workplace have been extensively documented. Advances in technology have facilitated increasingly large operations with corresponding scale