Tale of Two Surveys: the Rise in Self-Employment

United States Senate ^ | Sept. 2003 | U.S. Senate Joint Economic Committee

[LS]

You've heard it again and again: the economy has shed millions of jobs over the last couple of years. Yet, did you know there's actually two employment surveys released each month in the same report? And, did you know the one survey shows jobs losses while the other survey shows jobs gains?

Today's JEC report, "A Tale of Two Employment Surveys," begins to explain the mystery of the jobs numbers.

Highlights of today's report:

Two surveys from the Bureau of Labor Statistics (BLS) tell different stories about employment during the current economic recovery - a loss of 1.1 million payroll survey jobs since November 2001, and a gain of 1.4 million household survey workers. The jobs gap of 2.5 million between the two surveys is unprecedented. Some have suggested that a statistical revision to the household data in January 2003 is responsible for most of the reported jobs gap. Calculations by JEC indicate, however, that the revision accounts for relatively little of the gap. Controlling for the revision, the household survey still shows an increase of 1.1 million jobs since the end of the recession, and the jobs gap is still 2.2 million.

The household survey indicates that self-employment has grown by 626,000 jobs since the recession end. These workers are not counted by the payroll survey, so they account for a portion of the jobs gap, but two-thirds of the gap remains largely unexplained.

[AntiGuv]

Do drug dealers and sex workers count amongst the self-employed?

[ARCADIA]

The household survey indicates that self-employment has grown by 626,000 jobs since the recession end.

Buffalo chips.

This fudge puts then entire report to lie. they revised the numbers and elimitated virtually all of these bogus job gains for the year back in May, and we will see them do it again next year.

[marktwain]

It is possible that people who work in government forbidden jobs would answer the survey as such, but it seems unlikely.

The fact that more people are self employed seems like a very good thing. More independent people, less reliance on large organizations, more clamoring for freedom.

A very good thing that Democrats definitely hate and try to minimize.

[tbpiper]

Do drug dealers and sex workers count amongst the self-employed? In Holland and France.

[tbpiper]

The fact that more people are self employed seems like a very good thing. More independent people, less reliance on large organizations, more clamoring for freedom.

I agree. The most passionate voices for jobs are democrats and unions. Neither group has views conducive to selfrelaiance or enterprise.

[Unmarked Package]

I can account for one of the 626,000 newly self-employed workers. Last year I voluntarily left a secure job with a six-figure salary in a corporation that employed me for 27 years. I'm happier now than I've ever been before in my life. Statistics that show a loss of jobs do not always represent woe.

[SSN558]

Do drug dealers and sex workers count amongst the self-employed?

absolutely. ...and so do former manufacturing workers that now sell fruits and vegatables on street corners. Everyone knows self employed mechanics, construction workers, others trades people and professionals. They also operate cottage industries and sell at flea markets, much the way the former USSR underground economy use to work. They operate without lisenses and pay little or no taxes.

Technically they are law breakers. Practically, they have no other choice to survive since the new service economy does not pay a living wage for all but the most agressive exploiters.

The size of the underground economy is rarely mentioned is the U.S. media. This is not so in the enocomic analysis that appear in foreign journals, and they estimate that it is 10% of GDP in the United States.

[AEMILIUS PAULUS]

Many years ago when one crossed into Tiajuana, Mexico one was besieged by people selling cotton candy, plaster bulls, hats, ballons etc. They lived in cardboard shacks in the river bed. They were also classed as self employed. Of course, in America today we will have diversity, "The Big Tent, and "Room At The Table."

[Luke Skyfreeper]

I can account for one of the 626,000 newly self-employed workers. Last year I voluntarily left a secure job with a six-figure salary in a corporation that employed me for 27 years. I'm happier now than I've ever been before in my life. Statistics that show a loss of jobs do not always represent woe.

I can account for another. Unable to buy a job in my field at any price, I am working to create my own.

[ETERNAL WARMING]

LOL I noticed that they skipped the part about how many of them go bankrupt in the first year.

[AHerald]

Add me to the list also. Never been happier.

[Texas2step]

Add me to the list also. Never been happier.

And add one more. Best move I ever made. More money, more flexibility, more time with my family, more life. :-)

[marktwain]

A "job" with a large organization gives the illusion of security. A great many people find this illusion to be very comforting, thinking that "it can never happen to me".

They would rather cling to the illusion than admit to the greater risk that is actually involved by putting your fate in the hands of others.

I have no problems with people working in large organizations, as long as they realize the risks and take appropriate measures to deal with it, such as saving a large portion of their wages for the lean times and retirement.

[Koblenz]

In October 2002, I made the plunge to self-employment. Been that way ever since. And I must say, it's great. I make a lot more money, I do indeed pay taxes (but can deduct all kinds of expenses: when I drive to see a client, office supplies, cellphone, etc).

I am in financial consulting, and spread my work around three different companies: a company that makes software, a company that makes machine tools, and a broker/dealer. I do various financial analysis for all three companies, and bill them for work done.

There are some differences with working a normal job. First, none of these clients would think twice of giving me a job to do at 5 pm that is due at 9 am the next day. So I have to spend evenings working away. But I bill. And I get paid. One of the companies is in Canada, but they pay me in US Dollars.

Next, you don't get paid on a regular basis. Some clients take a month or so, and you never know when you're going to get paid next. So you have to have some reserves to hold over until the next check comes.

There's no withholding. So I take 40% of every check I get, and put 10% into an IRA, and 30% into a money market that is basically a tax account: I'll pay taxes out of that account, and if my taxes are less, then I'll essentially get a "refund" from that account.

One client has me travelling a bit. All the airline tickets, hotels, etc. go onto my Amex, and then I have to submit an invoice requesting reimbursement...

No vacation pay, no healthcare. So I've gotten my own healthcare for the wife and me: $380.77 per month. But that'll be fully deductible.

You've got to be willing to work weird hours, and you need to plan, plan, plan. You've also got to invoice: during the first few weeks, I sort of delayed doing this on a regular basis, because it was sort of a pain. But then I didn't get paid, so rapidly figured out a good solution. Quicken Small Business has a decent invoicing feature.

[Delmarksman]

As someone who just got pushed out of a well paying job due to an on the job injury I am looking for work. Can you give me any suggestions?

Del

[tbpiper]

Agreed. Jobs are good but they have do their limitations and liabilities. There's always a ceiling with that floor and the floor is only as good as the foundation. It pays to be prepared.

[goldstategop]

I'm self-employed. I have my own online home business. Yeah in this economy its tough to find a good job and why work for a boss? These days you want something done, just do it yourself and you'll be both more productive and happier.

[LS]

I'm still awaiting ANY evidence that, as a percentage of total new business starts, the bankruptcy rate is any higher now than in the 1980s. Bankruptcies traditionally increase when the economy grows, because more people as a % take risks. Typically, the failure rate of a new business is 50%.

[LS]

And today in America you are besieged by accountants, tax preparers, cell phone sales, self-owned video stores, vitamin shopes, restaurants, clothing stores, and so on. I don't think the connection is the same. One can sell balloons, or one can sell highly-paid technical services, as some of the people on this thread have shown.