Census Report: Three Quarters of Businesses Have No Employees

Liz Carey

Washington, DC (WorkersCompensation.com) – According to a recently released report from the US Census Bureau, more than 75 percent of all businesses in the United States have no employees.

And the industries those nonemployee businesses are involved in include some of the most dangerous jobs in the country.

According to the Census Bureau’s County Business Patterns (CBP) data: Of the more than 32 million businesses in the US in 2016, only 23.8 percent, 7.75 million, had employees. Those businesses that didn’t have employees averaged less than 4 percent of all sales and receipts nationally.

The Census Bureau CBP report also indicated that most non-employer businesses are self-employed individuals operating small unincorporated businesses, which may or may not be the owners’ principal source of income.

The numbers are an indication of the growth of the gig economy, said Morton Marcus, an economist and writer.

“Think about all those trucks on the nation’s highways driven by owner-operators. These are independent entrepreneurs who carry goods for one or more shippers. Often they bid for loads, stopping for coffee and to pray for falling fuel price(s),” Marcus said in The Republic. “In the past five years (2011 to 2016), transportation and warehousing nationally ha(ve) been the fastest growing business sector of non-employee firms, up by just less than 80 percent… Across all business sectors in America, non-employee firms grew by 10.3 percent. Part of those increases are related to continuing out-sourcing of labor. Where a large manufacturing firm had carpenters, painters and plumbers on the payroll in previous decades, now it may contract with firms that supply skilled workers who no longer receive the benefits once enjoyed by those craftsmen. Even if they are unionized, those workers do not negotiate with the manufacturing firm, but with the labor aggregator.”

Marcus said the numbers also reflect the growing trend of side hustles and money-making hobbies.

“Many people work out of their homes as independent contractors on a project basis. Nationally, of these non-employee entrepreneurs, 11 percent had sales or receipts in 2016 of $100,000 or more. In contrast, 79 percent had income from their ‘businesses’ of less than $50,000. How much of this revenue was retained after expenses, is not reported in the Census data,” he said. “These data, available for all states and counties in the U.S., are evidence of growing fragmentation in our economy. Some applaud this restructured distribution of economic power. Others lament an erosion of collective influence in economic affairs as power is concentrated in fewer firms dealing with more diffused labor markets.”

The data (2016 Nonemployer Statistics report from the Census Bureau) doesn’t include employees in private households, railroad employees, agricultural production employees and most government employees, Adam Grundy said. He is a supervisory statistician in the Census Bureau’s International Trade Management Division.

“The majority of all business establishments in the United States are nonemployers, yet these nonemployer establishments average less than 4 percent of all sales and receipts nationally,” Grundy said. “By looking deeper into both sets of data, you’ll see that in some sectors of the economy, such as Arts, Entertainment and Recreation, nonemployer establishments account for 91.0 percent of total establishments. In other sectors, such as wholesale trade, only about half of the establishments are nonemployers. Accommodation and Food Services is the only other sector with more employer establishments (64.8 percent) than nonemployer establishments (35.2 percent).”

Of the top ten industries represented as nonemployer businesses, five were among the industries considered the most dangerous by the Bureau of Labor Statistics. Nonemployer businesses identified themselves as working in agriculture; transportation and warehousing; construction; mining, quarrying, oil and gas extraction; and manufacturing.

In agriculture, more than 91 percent of the businesses considered themselves nonemployers, while 89 percent of transportation and warehousing businesses considered themselves nonemployers. More than three quarters of construction and mining businesses considered themselves nonemployers.

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