Monday, 27 November 2017

The Cities With the Most Self-Employed

A new report from the Stephen S. Fuller Institute at Virginia’s George Mason University shows that Miami has by far the most non-employer businesses per capita in the U.S. (click on chart to enlarge).

Non-employer per capita

New York, not surprisingly, has the largest total number of non-employer businesses. 

Non-employer by city

Non-employer statistics are often used as a proxy for self-employment.

This is because a "non-employer businesses" is defined by the  U.S. Census Bureau as "one that has no paid employees, has annual business receipts of $1,000 or more ($1 or more in the construction industries), and is subject to federal income taxes."

In other words, non-employers only have an owner. The data comes from IRS tax files and includes full and part-time businesses. About about three-quarters of all U.S. businesses are non-employers. 

For a variety of reasons too wonky to go into here, the non-employer stats are an imperfect self-employment proxy (see the U.S. Census non-employer methodology description for more detail). But we consider this data to be a directionally correct measure of self-employment, both in terms of growth and overall size. 

You may ask how non-employer data differs from BLS self-employment data.

The quick answer is the non-employer data comes from IRS data, while self-employment data comes from the BLS's monthly current population survey. This means the two data sets aren't really comparable. See this article for more details

We started tracking the non-employer data back in 2006. It was the dataset that first alerted us to the growth of the gig economy. 



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