The New Yavapai Economy: Characteristics of the Self-employed
The importance of entrepreneurship in rural America is well established in economic and political literature, but what are the characteristics that embody the small business owner?
According to a release by the U.S. Bureau of Labor Statistics, 15 million Americans are self-employed, that’s approximately 10.1 percent of the total U.S, labor force.
Of that 15 million, 9.5 million are unincorporated, known as sole proprietors. This legal classification considers the individual and the business to be one entity, thus any liability incurred by the business is incurred by the owner and their personal assets. Incorporated self-employed individuals are more likely to have paid employees than sole proprietors. About 42 percent of incorporated individuals have paid employees compared to 14.3 percent of unincorporated self-employed.
According to 2015 statistics, unincorporated self-employment rates were highest for individuals with less than a high school diploma, 10 percent, or a professional degree, 9.1 percent. Among incorporated self-employed, rates were highest for those with a professional degree, 12.2 percent, or a doctoral degree, 8.4 percent.
Veterans show a greater propensity to be self-employed than non-veterans, displaying a 7.1 percent self-employment rate compared to a 6.4 percent rate for non-veterans. Additionally, veterans from the World War II, Korea, and Vietnam era far outnumber self-employed veterans from this century, having a 15.3 percent and 8.7 percent rates for self-employed incorporated and unincorporated individuals respectively compared to 2.4 and 2.1 percent for veterans from the last two decades. Self-employment rates are generally higher for older individuals as well, with 15.5 percent of all self-employed being 65 or older.
Although the self-employed rate has trended down since the mid-’90s, and particularly took a hit after 2008 most likely due to a loss of demand and lack of capital resources, the next few decades will probably see a resurge in the number of self-employed due to technological advances and increased communications that permit people to do business from anywhere in the globe, and the desire of most Americans to control and manage their own labor.
Alexandria M. Wright is director Yavapai College Regional Economic Development Center, which provides analysis and services that facilitate economic development throughout Yavapai County and build wealth in our local communities.