The COVID-19 shutdown of our economy and the disbursement of federal funds to shore up businesses and the unemployed, brought a focus to the self –employed. Montana leads the nation in the percentage of the work force that is self-employed.
With 14 percent of its work force self-employed, Montana tops the second leading state, Vermont, with 13.4 percent. West Virginia has the lowest share of self-employed workers, with just 6.3% of workers who are self-employed.
In general the self-employed in any given community seems to hover around 10 percent, according to a report issues by Center Square. There are over 15 million self-employed workers in the U.S. and the self-employment rate varies considerably across cities and states.
The self-employed, which for the purpose of their analysis includes those adults who operate either incorporated or unincorporated businesses, are represented in every industry sector except public administration. Other services – a catchall industry sector that includes, among others, car repairs, barbershops, salons, dry-cleaning, and pet care services – has the largest share of self-employed workers at nearly 26%. Both the Agriculture, forestry, fishing and hunting, and mining industry and the Construction industry have high rates of self-employment, at 24% and 23% respectively.
As of 2018, these three industry sectors accounted for over 5 million self-employed workers, but a combination of non-essential business closures, disruptions of the food supply chain, and a hold on construction work in many states will likely drive these numbers down.
To determine the metros with the most self-employed workers, researchers at Volusion analyzed the latest data from the U.S. Census Bureau’s 2018 American Community Survey Public Use Microdata Sample (ACS PUMS). Using ACS PUMS data, the researchers ranked metros according to the share of workers who are self-employed in either their own incorporated business or self-employed in their own unincorporated business (including unpaid family workers). In the event of a tie, the metro with the larger number of self-employed workers was ranked higher. Median incomes were calculated for both full-time workers and all workers.
Self-employment encompasses a wide range of jobs, including everything from carpenters and hair stylists to real estate agents and accountants. Men make up the majority of self-employed workers, and they are also more likely than women to have their own incorporated businesses. Among self-employed individuals in incorporated businesses, 68% are male. For those in unincorporated businesses, the percentage is 59% male.
Locations with the most self-employed workers are spread across the country. Among large metropolitan areas, the Miami metro is home to the most self-employed workers in the U.S., with 14.3% of workers being self-employed–almost 50% higher than the national rate.
While the median income for full-time self-employed workers is the same as the median income for all workers at the national level, the results vary widely by location. Out of the 15 large metros with the most self-employed workers, the self-employed earn more than the typical worker in seven of the locations.
Similar to the large metro group, the small and midsize metros with the most self-employed workers are a diverse group. However, California and Florida are home to many of these metropolitan areas. The metros at the top of these lists have over 18% of workers who are self-employed.
Self-employed workers and their businesses play a critical role in the national economy. While emergency government aid programs have created new protections for these workers, benefits have been notoriously difficult to secure.