The Power of One

The Census Bureau reports that 70% of U.S. businesses have no paid employees, yet make up a large part of many industries

It should come as no surprise that small business is a major economic force in the U.S. But new figures released by the Commerce Dept.'s Census Bureau spell out the importance of the smallest of small businesses.

About 70% (or 15.4 million) of the nation's 21.8 million businesses in 1997 had no paid employees, according to the Census report. Nonemployers are mostly sole proprietorships (13.6 million), but also include corporations (946,000) and partnerships (860,000) that don't file payroll taxes. Those figures don't include all self-employed individuals, since more than 1 million self-employed business owners have paid employees and, therefore, are classified as employer businesses.

Nonemployer businesses recorded sales or receipts of $586 billion, which represents 3.3% of the $18 trillion in 1997's total business sales and receipts. California led the nation with the greatest number of nonemployer businesses. Alaska and Maine had the highest proportion of nonemployers, largely because of the high number of individual proprietors in those states' fishing industries. "These very small businesses are excluded from most other business statistics," says Census Bureau analyst Paul Zeisset, "yet they form an important part of many industries."


  Four economic sectors made up 58% of all nonemployer sales or receipts: real estate and rental and leasing, $102 billion; construction, $87 billion; professional, scientific, and technical services, $81 billion; and retail trade, $69 billion.

"America's self-employed are the leading edge of our entrepreneurial economy," says Ginny Beauchamp, vice-president of the National Association for the Self-Employed. "Although high-tech and Internet startups are in the news, the self-employed truly are butchers, bakers, candlestick-makers, as well as architects, accountants, and attorneys."

The complete report, 1997 Economic Census: Nonemployer Statistics, can be found on the Census Bureau Web site.

By Robin J. Phillips in New York

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