NPR logo Chart: Big Co's Pay Better

Chart: Big Co's Pay Better

And my dad advised selling apples. Alan Cordova hide caption

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Alan Cordova

And my dad advised selling apples.

Alan Cordova

Of all the financial advice I got from my father, this nugget seems most vexing. I'll paraphrase as best I can:

"If you have to get you a cart and sell apples on Capitol Street, don't ever work for anyone else."

I took Dad to heart on that one, then nearly starved as a freelancer and later fell in love with the teamwork that sometimes comes with staff gigs at big companies.

Alan Cordova looked at compensation data from the Small Business Administration and drew up this chart and the one after the jump. Their message: Bigger companies pay better.

I'll leave the arguing about the upside potential of entrepreneurship to y'all. A note from Cordova, and a second chart, after the jump.

Not adjusted for inflation. Alan Cordova hide caption

toggle caption
Alan Cordova

Not adjusted for inflation.

Alan Cordova

Alan Cordova writes:

These charts compare changes in annual employee pay (cash payments, such as salaries and wages, but not stock options or benefits) by private-sector businesses of different sizes. While annual pay has grown in businesses of all sizes (in nominal terms), larger firms are affected by up- and down-turns: in good times, their employees' compensation increases more rapidly, and in worse times it increases more slowly than smaller firms.

"Growth in Annual Pay per Employee" weights the national data for annual compensation by the total number of employees working in businesses of the different sizes. Larger firms tend to pay more per employee than smaller firms, as reflected in "Pay 'Multiple' Over a Firm with <20 Employees." To generate this graph I divided the average annual per-employee compensation at larger firms by the average annual per-employee compensation at firms with less than 20 employees. For example, the salary of the average employee at a firm with more than 500 people is approximately 30 percent higher than the salary of the average employee at firms with less than 20.

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