careerbuilder & emsi AmericA s self-employment landscape
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1 CareerBuilder & EMSI America s Self-Employment Landscape
2 America s Self-Employment Landscape table of Contents Key Findings Definition and Data Sources National Trends Composition of the Self-Employed Workforce Geographical Breakdown In the early 2000s, self-employment was on a rapid ascent in the United States. The number of Americans working on their own those who consider themselves self-employed, not just freelancers doing side jobs increased 4 percent annually from 2001 through 2005, and then grew 2 percent from 2005 to But then the early signs of the downturn began to appear, followed by the financial crisis and Great Recession, and self-employment growth came to a halt. New jobs of any kind became scarce, and even when employers started hiring post-recession, self-employment didn t recover. Only since 2012 has there been positive growth, albeit slight. In this report, CareerBuilder and Economic Modeling Specialists International (EMSI) document selfemployment trends before and after the Great Recession using EMSI s dataset on self-employed workers. These are workers who, when surveyed by the U.S. Census Bureau, consider self-employment to be a significant part of their income or time working. KEY FINDINGS For all the talk about more people wanting the independence of working on their own, selfemployment jobs have declined 5 percent since The U.S. has an estimated 10 million selfemployed jobs, nearly one million fewer than it had in By contrast, the number of jobs for salaried employees those who work in traditional work settings has risen 4 percent since The decline in self-employed jobs coincides with a rise in Americans working on the side to supplement their incomes. More people are getting second and third jobs, but fewer people are dropping their day jobs altogether to work on their own. According to a new CareerBuilder survey, 20 percent of full-time workers picked up a second job in 2013 or plan to do so in The biggest declines in self-employment have come in the agriculture, construction, real estate, child care, and retail trade industries. The biggest gains have been in lower-wage fields photographers, landscaping workers, maids, and personal care aides. Even with low-wage occupations at the top of the self-employment growth list, several high-wage occupations have made significant gains, most notably market research analysts/specialists, management analysts, and computer occupations such as web developers. Nearly two-thirds of self-employed jobs in the U.S. are taken up by men (62 percent), and more than 30 percent of the self-employed are 55 years and older. Only North Dakota and Washington, D.C. have seen self-employment increases since 2009, and their gains have been minimal (5 percent and 1 percent, respectively). Among large metros, only five have seen at least 2 percent growth in self-employment jobs: Memphis (4 percent), Bridgeport-Stamford- Norwalk (3 percent), Austin (2 percent), Orlando (2 percent), and Las Vegas (2 percent). 2 America s Self-Employment Landscape
3 Definition and Data Sources EMSI s self-employment dataset is based largely on the Census Bureau s American Community Survey, which EMSI combines with its own proprietary data and other publicly available sources. This dataset tracks proprietors who work for their own unincorporated business, practice, or farm. People with incorporated businesses are considered wage-and-salary workers for their own companies, and are thus not considered proprietors. While not included in this study, EMSI also tracks what it calls extended proprietors those who do side gigs or earn income through a sole proprietorship or partnership, most often (but not always) in addition to their primary job. If surveyed, they would not list this extra work as their main source of income. This report uses EMSI s data release. Monitoring Entrepreneurial Activity EMSI s proprietor datasets offer a window into entrepreneurial activity for any level of geography, but readers are cautioned against labeling all workers in the self-employed or extended proprietor classes as entrepreneurs. More accurately, inside the extended proprietors dataset are those who pursue extra work opportunities while maintaining their day job, while the self-employed dataset includes those who have taken the additional step and earn a significant part of their income through their own business. Once start-up owners incorporate their business, they fall under EMSI s traditional wage-and-salary worker datasets. National Trends The U.S. has an estimated 10 million self-employed jobs. That s 6.6 percent of all reported jobs, down from a high of 7.2 percent in A far larger percentage of workers hold freelance jobs or work on the side in some fashion in addition to their primary job (e.g., performing music on the weekend, coaching their child s youth sports team, mowing lawns or doing other yard work in the summer). Freelancers Union estimates that nearly a third of the labor force are independent workers. Yet due to the limitations of publically available data from the government on proprietors, it s difficult to pin down the exact share of the workforce who do side jobs versus those who earn income in partnerships and other ventures that aren t necessarily jobs in the strict sense. What s clear, however, is that the number of workers who consider themselves self-employed is declining after a period of sustained growth. From 2001 to 2006, the self-employment workforce rose 19 percent close to 1.8 million new jobs nationally. But since, the U.S. has lost 936,000 self-employed jobs, a 9 percent decrease. Figure 1: TOTAL SELF-EMPLOYED JOBS IN THE U.S. 10,002,586 9,170,567 10,938,652 Source: Self-Employed - EMSI Class of Worker America s Self-Employment Landscape 3
4 Economic forces like the credit crisis and housing bubble either soured people on self-employment or made it harder for them to start and sustain their own businesses. No industry bears this out more than construction. Figure 2: Self-Employment Job Gains and Losses: All Industries vs. Construction 1,768, ,000 All Industries Construction During the growth days of the early 2000s, construction was the biggest driver of new jobs among the self-employed. Even with a small decline during the 2001 recession, the construction industry, fueled by the housing boom, accounted for nearly 1 in 4 new self-employment jobs (418,000 total) from 2001 to Much of the jobs gains, however, have been wiped out since the downturn. Self-employed construction jobs dipped 13 percent from 2006 to 2013, a loss of 266,000 jobs Just as construction made up almost -266, percent of all new jobs during the boom period for self-employment, it has accounted for 28 percent of the jobs losses since. -936,066 However, not every field inside the sector is Source: Self-Employment - EMSI Class of Worker bleeding jobs. For instance, self-employed jobs for construction laborers (as shown in Table 1) have expanded 10 percent since On the other hand, construction managers have declined 38 percent over that time. Based on these trends, there could be a comparable rebound in construction self-employment if the housing recovery kicks into full gear. Beyond construction, the biggest declines in self-employment have come in farming and agriculture, retail trade, and real estate. Jobs for self-employed real estate agents have dipped 22 percent since 2006, from approximately 317,000 to 246,000. And the drop-off in self-employed farmers and ranchers has been even more substantial a 38 percent decline in jobs, which equates to 93,000 lost jobs. The largest gains, meanwhile, have been among managers, all other, a catch-all management occupation, and three lower-wage occupations: landscaping workers, maids, and personal care aides. Nonetheless, several high-wage occupations have also seen solid self-employment growth, most notably computer occupations such as web developers (up 67 percent since 2006), as well as market research analysts/ specialists and management analysts. The largest self-employed occupations are childcare workers (516,000 jobs), maids and housekeeping cleaners (437,600), and farmers, ranchers, and other agricultural managers (437,000). Carpenters and construction laborers are also common self-employed occupations. Among high-skill occupations, the largest self-employed fields are ones that lend themselves to people starting their own firm or office lawyers (184,000 jobs), management analysts (158,000), and accountants and auditors (107,000). Of those three occupations, only management analysts have grown since 2006 (3 percent) while lawyers (-10 percent) and accountants (-13 percent) have seen double-digit percentage declines. Table 1 shows the performance of high-skill occupations and occupations with the most growth and decline among the self-employed. 1 One occupation that stands out: medical transcriptionists. Self-employed jobs in this field have shot up 375% since 2006, from just over 2,300 jobs to more than 11,000 nationally. 1 First-line supervisors of retail sales workers, as shown under occupations with the most decline, includes proprietors of small, unincorporated businesses that may have LLC status and/or have employees under contract. For example, an owner of a small gift shop or antique store who has a single employee may be listed as self-employed in this occupation. Sole proprietors of unincorporated businesses are also likely included in the managers, all other occupational category, as well as other manager/supervisor occupations. 4 America s Self-Employment Landscape
5 TABLE 1: TOP AND BOTTOM GROWTH SELF-EMPLOYED OCCUPATIONS Description 2006 Jobs 2013 Jobs Change % Change HIGH-SKILL FIELDS Median Hourly Earnings Management Analysts 154, ,413 4,059 3% $27.99 Clinical, Counseling, and School Psychologists 44,895 44, % $31.61 Physicians and Surgeons, All Other 2 38,956 32,742-6,214-16% $67.58 Chief Executives 48,495 41,754-6,741-14% $26.84 Graphic Designers 78,922 71,673-7,249-9% $18.04 Dentists, General 44,811 36,421-8,390-19% $80.54 Personal Financial Advisors 54,994 45,480-9,514-17% $30.76 Accountants and Auditors 122, ,737-16,082-13% $26.42 Lawyers 204, ,977-20,874-10% $37.53 MOST GROWTH (Total New Jobs) Managers, All Other 258, ,405 39,839 15% $16.79 Landscaping and Groundskeeping Workers 297, ,429 37,939 13% $9.90 Maids and Housekeeping 400, ,606 37,102 9% $8.73 Construction Laborers 318, ,020 30,287 10% $12.74 Personal Care Aides 95, ,969 17,367 18% $9.13 Web Developers 16,111 26,930 10,819 67% $17.92 Recreation Workers 22,997 32,113 9,116 40% $11.34 Medical Transcriptionists 2,373 11,275 8, % $12.02 Home Health Aides 36,362 44,513 8,151 22% $9.14 Photographers 63,935 71,903 7,968 12% $13.34 MOST DECLINE (Total Job Losses) Farmers, Ranchers, and Other Agricultural Managers 561, , ,620-22% $10.24 Construction Managers 247, ,470-93,185-38% $15.52 Real Estate Sales Agents 317, ,010-71,132-22% $14.76 Carpenters 476, ,877-67,497-14% $13.75 First-Line Supervisors of Construction Trades and 195, ,010-64,446-33% $15.12 Extraction Workers First-Line Supervisors of Retail Sales Workers 323, ,331-62,494-19% $11.43 Childcare Workers 568, ,050-52,502-9% $6.41 Heavy and Tractor-Trailer Truck Drivers 237, ,233-35,342-15% $15.91 Painters, Construction and Maintenance 220, ,761-28,054-13% $13.31 First-Line Supervisors of Non- Retail Sales Workers 133, ,493-27,568-21% $15.08 Source: Self-Employed - EMSI Class of Worker 2 The physicians and surgeons, all other category includes all self-employed physicians and surgeons not included in the broad physicians and surgeons occupation or in other health diagnosing and treating practitioner categories. Keep in mind that respondents to the American Community Survey self-report their occupation, thus making the data subject to error. America s Self-Employment Landscape 5
6 Composition of the Self-Employed Workforce The most likely demographic to be self-employed: older men. As of 2013, men took up 62 percent (6.2 million) of self-employed jobs in the U.S, and more than 30 percent of the self-employed were 55 years and older. The next largest age group was 45- to 54-year-olds (28 percent of all jobs). In some of the largest self-employed occupations, close to half of all workers are at least 55. This includes farmers and ranchers (49 percent are 55 and over); accountants and auditors (48 percent); lawyers ( 46 percent); and real estate agents (45 percent). Self-employed workers also on average make less than their salaried counterparts. Median hourly wages for self-employed jobs are $15.78 per hour, compared to $20.35 per hour for salaried employees. The lowest earners are in personal care and service occupations ($8.84 per hour) and food prep and serving occupation ($9.05). The highest earners are health care practitioners ($51.00) and legal workers ($35.66). Figure 3: Self-Employed Age Breakdown 30% 28% 42% and over Source: Self-Employed -- EMSI Class of Worker Geographical Breakdown Figure 4: PERCENtAGE Share of Self-employment Jobs by State: Source: Self-Employed -- EMSI Class of Worker 6 America s Self-Employment Landscape
7 While few areas of the country have experienced an expansion of self-employed jobs since 2009, more than 30 of the 100 largest metropolitan areas have bigger shares of self-employment than the national average. McAllen, Texas, and Riverside-San Bernardino-Ontario, Calif., lead all large metros with 11.9 percent and 11.2 percent of their total jobs, respectively, made up by people who work on their own. As Table 2 shows, Buffalo-Niagara Falls, N.Y., has the smallest share among the 100 largest metros at 3.5 percent, followed by Salt Lake City (4.1 percent) and Virginia Beach-Norfolk-Newport News, Va.-N.C. (4.2 percent). TABLE 2: SHARE OF SELF-EMPLOYED JOBS BY MSA Metropolitan Statistical Area Share of Self-Employed LARGEST McAllen-Edinburg-Mission, TX 11.9% Riverside-San Bernardino-Ontario, CA 11.2% Los Angeles-Long Beach-Santa Ana, CA 9.9% Oxnard-Thousand Oaks-Ventura, CA 9.2% Miami-Fort Lauderdale-Pompano Beach, FL 9.2% Bridgeport-Stamford-Norwalk, CT 9.2% San Francisco-Oakland-Fremont, CA 8.7% Stockton, CA 8.3% Portland-Vancouver-Hillsboro, OR-WA 8.3% Sacramento--Arden-Arcade--Roseville, CA 8.2% Lancaster, PA 8.0% SMALLEST Buffalo-Niagara Falls, NY 3.5% Salt Lake City, UT 4.1% Virginia Beach-Norfolk-Newport News, VA-NC 4.2% Albany-Schenectady-Troy, NY 4.3% Harrisburg-Carlisle, PA 4.3% Syracuse, NY 4.3% Milwaukee-Waukesha-West Allis, WI 4.5% Rochester, NY 4.7% Grand Rapids-Wyoming, MI 4.7% Baltimore-Towson, MD 4.8% Madison, WI 4.8% Richmond, VA 4.8% Louisville/Jefferson County, KY-IN 4.8% Source: Self-Employed -- EMSI Class of Worker Among large metros, only five have seen at least 2 percent growth in self-employment jobs since the end of the recession in 2009: Memphis (4 percent), Bridgeport-Stamford-Norwalk (3 percent), Austin (2 percent), Orlando (2 percent), and Las Vegas (2 percent). Even fewer states have seen self-employment increases since North Dakota s self-employed ranks grew 5 percent and Washington, D.C. s grew 1 percent, while every other state declined from 2009 to The growth in North Dakota has come predominantly among real estate agents (190 new jobs since 2009, America s Self-Employment Landscape 7
8 up 69 percent), retail sales supervisors (239 new jobs, up 36 percent), and construction laborers (211 new jobs, up 31 percent) all likely byproducts of the oil boom. In D.C., the fastest-growing selfemployed occupations have been couriers and messengers (475 new jobs since 2009, up 417 percent), door-to-door sales workers (268 new jobs, up 218 percent), and maids and housekeeping cleaners (186 new jobs, up 34 percent). Besides Rhode Island (-13 percent), the biggest job losses have come in the South West Virginia (-15 percent), Arkansas and Kentucky (both -11 percent), and Mississippi (-10 percent). Vermont, meanwhile, has the greatest share of self-employed jobs (10.2 percent of all jobs as of 2013). Montana is second at 9.7 percent, while Maine (9.5 percent), California (9.0 percent), and Oregon (8.7 percent) round out the top five. Washington, D.C., with its huge government sector, has far and away the lowest share of self-employed jobs (2.1 percent). About EMSI Economic Modeling Specialists Intl., a CareerBuilder company, turns labor market data into useful information that helps organizations understand the connection between economies, people, and work. Using sound economic principles and good data, EMSI builds user-friendly services that help educational institutions, workforce planners, and regional developers build a better workforce and improve the economic conditions in their regions. For more information, visit About CareerBuilder CareerBuilder is the global leader in human capital solutions, helping companies target and attract great talent. Its online career site, CareerBuilder.com, is the largest in the United States with more than 24 million unique visitors and 1 million jobs. CareerBuilder works with the world s top employers, providing everything from labor market intelligence to talent management software and other recruitment solutions. Owned by Gannett Co., Inc. (NYSE:GCI), Tribune Company and The McClatchy Company (NYSE:MNI), CareerBuilder and its subsidiaries operate in the United States, Europe, South America, Canada and Asia. For more information, visit Media Contact Ryan Hunt ryan.hunt@careerbuilder.com 8 America s Self-Employment Landscape 39
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