One Million New Non-Employer Businesses

Just out from the Census: The U.S. added a million new non-employer businesses in 2007, for a total of 21.7 million. Together these businesses had sales of nearly $1 trillion — that’s about 7% of US GDP in 2007. Most of these are self-employed individuals with sole proprietorships, though the Census recorded 1.4 million corporations with no employees and 1.2 million partnerships.

I think the long-term trend here is clear: More people working for themselves instead of (or in addition to) being employees. My gut sense is the recession is creating even more entrepreneurs as laid off workers go into business for themselves. Census data is always a couple years behind, and it will be interesting to see whether the numbers from 2008 and 2009 bear this out — and whether it’s a significant, permanent change or a temporary response to the job market.

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