Micro-businesses booming in U.S.
May 30, 2013
• More than 380,000 non-employer businesses added to the economy
• “Approximately 75 percent of all U.S. business locations are non-employer businesses”
There are small businesses and then there are the really small businesses – those that have no employees.
And those are booming, at least in number.
The number of businesses without paid employees in the U.S. rose 1.7 percent to 22.5 million in 2011, according to a new report released Thursday from the U.S. Census Bureau. This marks the second straight increase in nonemployer businesses, with all but two states (Louisiana and New Hampshire) posting gains from 2010 to 2011.
U.S. businesses without paid employees cover 450 industries and have annual business receipts of $1,000 or more ($1 or more in the construction industries) and are subject to federal income taxes.
“Approximately 75 percent of all U.S. business locations are non-employer businesses,” says William Bostic Jr., associate director for economic programs at the U.S. Census Bureau. “These statistics provide the only source of information on the total number of establishments and receipts at the local level for this important component of our nation’s economy.”
This release covers 19.4 million sole proprietorships, 1.4 million corporations and 1.6 million partnerships, which together make up the total number of non-employer businesses.
At the state level, California has the largest increase in the number of non-employer businesses, with 72,605 added in 2011. The states with the next highest increases in the number of businesses were Texas (41,148), Florida (31,485) and New York (21,119).
Among the 50 counties with the largest number of non-employer businesses, Los Angeles County added the most with 28,651. Other large increases were in Cook County, Ill. (11,705), Maricopa County, Ariz. (10,038) and Kings County, N.Y. (Brooklyn) with 8,455.
California also had the largest dollar increase in non-employer receipts, adding $5.5 billion for a state total of $143.8 billion in 2011.
Among industry sectors, services that compromise the “other services” (except public administration) sector gained the largest number of establishments, adding 159,163 in 2011, an increase of 4.7 percent. Types of services that fall within this sector include automotive repair and maintenance, barbershops, beauty salons, laundries and dry cleaners.
The number of non-employer businesses declined in only two sectors. The construction sector lost 36,262 establishments (1.5 percent), while the finance and insurance sector lost 3,088 establishments (0.4 percent).
• Total annual receipts for non-employer businesses were $989.6 billion in 2011, an increase of $38.8 billion (4.1 percent) from the previous year.
• The District of Columbia had the highest percent increase in the number of non-employer businesses, up 7.2 percent, followed by North Dakota (4.3 percent), Arizona (3.2 percent) and Delaware (2.9 percent).
• North Dakota reported the highest percentage increase in receipts in 2011, up 13.2 percent to $2.3 billion.
• Among the 50 counties with the largest number of non-employer businesses, Brooklyn had the highest percentage increase in receipts, rising 7.8 percent in 2011. Orange County, Fla., increased 6.8 percent and Harris County, Texas, followed with an increase of 6.6 percent.