Pool of Nonemployer Firms Continues to Shrink

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Written by: William G. Bostic Jr., Associate Director for Economic Programs

Firms that do not have paid employees (businesses ranging from small "mom and pop" corner stores to independent contractors to Internet-based mail order houses) have continued to suffer through the troubled economic times felt since 2008. In 2009, the number of nonemployer firms fell to 21.1 million, down 260,000 from 2008 and down more than 600,000 since 2007.

These statistics are from Nonemployer Statistics: 2009, a report released by the U.S. Census Bureau today, and are the only source of information available on the number of nonemployer firms and receipts at the local level. Such firms comprise the majority of U.S. businesses but account for only about 4 percent of total U.S. business receipts. Many of these firms represent self-employed individuals whose earnings are not necessarily their primary source of income.

Although most states experienced an overall decline, three states and the District of Columbia actually gained nonemployer firms between 2008 and 2009. Texas led the way, adding 8,260, followed by Georgia and Louisiana. On the other hand, New York lost nearly 24,000 firms, more than any other state, with Pennsylvania, California and Minnesota also losing many firms.

Across the nation, most industries experienced declines in nonemployer businesses and receipts. Among the few bright spots were the personal care services industry (such as barber shops and beauty salons) and child day care services, which added 72,000 and 27,000 businesses respectively.

These statistics are available at the national, state, county and metropolitan area levels. To see how nonemployer businesses fared in your local area, click here.

Nonemployer Statistics data exclude businesses with paid employees; statistics on employer businesses are covered in 2009 County Business Patterns, which was released at the end of June.

Read the press release.

View the detailed tables.

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