More businesses are operating without paid employees

The number of businesses without paid employees rose by 831,317 or 3.6 percent to 23.8 million establishments from 2013 to 2014. Businesses without paid employees, such as operating a family-run corner store, acting as a real estate agent, pet sitting, blogging, and snowplowing, are refered to as nonemployer businesses.

The transportation and warehousing sector (NAICS 48-49) propelled the increase, leading all sectors in both rate of change (with a 13.5 percent increase) as well as absolute number of establishments added (148,626) and reached 1.3 million nonemployer establishments in 2014, according to U.S. Census Bureau statistics released recently.

The District of Columbia, Massachusetts and California led all states or equivalents in the rate of transportation and warehousing nonemployer growth from 2013 to 2014, at 38.9 percent, 36.9 percent and 24.8 percent, respectively.

Among the 50 counties with the highest number of nonemployer establishments, California was home to six of the 10 counties with the highest rate of annual growth, with San Francisco leading these 50 counties with 61.5 percent growth in this sector. San Francisco also led among these same 50 counties in the rate of increase for transportation and warehousing receipts with 33.8 percent annual growth in 2014.

Among these same 50 counties, two of the five counties with the fastest rate of increase in receipts for this sector were in the Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. metro area (24.1 percent increase in Fairfax, Va., and 23.7 percent increase in Montgomery, Md.). The District of Columbia topped all states or state-equivalents in the rate of increase for transportation and warehousing receipts at 35.9 percent to $78.3 million, followed by Illinois (18.4 percent to $4.9 billion) and Texas (17.7 percent to $10.2 billion) in 2014.

Within the transportation and warehousing sector, establishments in the transit and ground passenger transportation subsector (NAICS 485) increased by 90,742 establishments (or 33.4 percent) to 362,445 in 2014. This subsector also led all other transportation and warehousing subsectors in the annual rate of increase in nonemployer receipts (up 18.3 percent to $11.7 billion in 2014). Transit and ground passenger transportation includes activities such as urban transit systems; chartered bus, school bus and interurban bus transportation; and taxis.

The overall rate of increase in nonemployer receipts was 6.1 percent from 2013 to 2014, reaching $1.1 trillion. Receipts for the transportation and warehousing sector climbed the fastest, with a growth of 12.9 percent to $81.9 billion in 2014. Receipts per establishment among all nonemployers rose 2.4 percent from 2013 to 2014, reaching $46,815. Real estate and rental and leasing (NAICS 53) led all sectors in total receipts, with $247.9 billion in 2014.

These data are all part of Nonemployer Statistics: 2014, which publishes statistics on businesses in over 450 industries at varying levels of geography, including national, state, county, metropolitan statistical area, and combined statistical area. Many nonemployer establishments are the owner’s primary source of income, while others may be a side job. For the first time with this release, the Census Bureau now publishes additional detail for the legal form of organization of corporations, specifically, delineating S?Corporations.

Geographic Patterns

Florida, Texas and Alaska led all states in the rate of increase in the number of nonemployer establishments between 2013 and 2014. Florida jumped 6.0 percent (to 1.9 million), Texas increased 5.4 percent (to 2.2 million) and Alaska grew 5.3 percent (to 55,818 nonemployers in 2014.) Florida also led in the number of nonemployer establishments per adult (age 18 and older), with 12.3 nonemployer establishments for every 100 adults (derived using the Census Bureau’s July 1, 2014, population estimates).

Among the 50 counties with the highest number of nonemployers, the two that had the fastest rate of growth in establishments were in rapidly growing Texas: Travis (in the Austin-Round Rock metro area) and Collin (in the Dallas-Fort Worth metro area). Nonemployer establishment growth in these counties registered 8.2 percent (to 110,302) and 7.5 percent (to 81,518), respectively, in 2014.

Receipts grew faster in Wyoming (up 9.7 percent to $2.4 billion in 2014) than any other state. Among the 50 counties with the highest number of nonemployer establishments, Miami-Dade, Fla., led in growth of receipts in 2014 (up 11.3 percent to $18.1 billion.)

Other highlights:

Nation

  • Over the last 10 years (2005–2014), nonemployers increased by 3.4 million establishments (or 16.9 percent) and grew by $164.7 billion in receipts, having surpassed the trillion-dollar mark for the first time in 2012.
  • Other services (NAICS 81) led all sectors for the number of nonemployer establishments, with 3.7 million in 2014. This sector includes such disparate businesses as nail salons, equipment and machinery repairing; promoting or administering religious activities; photographers, temporary parking and dating services.
  • Although every sector experienced growth in nonemployer receipts, agriculture, forestry, fishing and hunting (NAICS 11) had the smallest annual increase (with 2.5 percent to $11.2 billion in 2014). This sector also experienced a 0.9 percent decrease from 2013 to 2014 in the number of establishments (to 237,817 nonemployers), the only decline of all sectors.
  • Utilities (NAICS 22) had fewer nonemployer establishments and lower receipts compared with any other sector in 2014 (19,984 nonemployers and $966.6 million in receipts).

States

  • California, Texas and Florida topped all states in the total number of nonemployer establishments (3.1 million, 2.2 million and 1.9 million, respectively) as well as for receipts ($162.5 billion, $107.5 billion and $84.6 billion, respectively).
  • Wyoming had fewer establishments (47,576) and lower receipts ($2.4 billion) than any other state. However, receipts grew faster in Wyoming (up 9.7 percent to $2.4 billion) than any other state.

Counties

  • Among the 50 counties with the highest number of nonemployer establishments, Miami-Dade, Fla., led in the rate of increase for nonemployer receipts with a growth of 11.3 percent to $18.1 billion in 2014, followed by Kings, N.Y. (10.3 percent to $10.9 billion) and Palm Beach, Fla. (10.0 percent to $8.3 billion).
  • Los Angeles, Calif., topped all counties with close to a million (991,091) nonemployer establishments and $51.8 billion in receipts.
  • Although each of the 50 counties with the largest number of nonemployer establishments experienced an increase in the number of establishments, Wayne, Mich., had the smallest rise (with 0.2 percent growth to 126,525 nonemployers in 2014). Likewise, every large county experienced an increase in receipts, but Suffolk, N.Y. had the smallest growth (with 3.8 percent change to $6.9 billion nonemployers in 2014).

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