From Bloomberg
Another Ugly Employment Data Point
BY MARK GIMEIN | AUG. 28, 2014
The recession that started with the collapse of the housing market ended five years ago, yet there’s a persistent sense that if we’re out of it, it’s only through a long and ugly slog. While the headline unemployment rate is indeed falling, we keep finding that other indicators of the job market don’t look great. The New York Times‘ David Leonhardt draws attention to the decline in the number of people answering surveys, a problem because the unemployed may be particularly unwilling to tell economists that they don’t have a job.
So here’s another uncomfortable indicator to add to the mix: The number of people who identify as “self-employed.” If small business is indeed the engine of the economy, as politicians like to point out, then self-employment is the engine of small business creation. A new company starts with one person quitting a job to start something new.
Since the recession, the number of self-employed has fallen. Below you can see a chart of the unincorporated self-employed. It’s down from a peak of 10.9 million in 2005 to 9.1 million now (the drop in incorporated self-employed workers is similar). At first, you may suspect self-employment might climb in recessions, as some folks move from jobs to unsteady — and sometimes marginal — freelance work. That, however, isn’t true: The self-employment number has historically behaved like other indicators of employment, rising in times of prosperity and falling in recessions.
Read more from Bloomberg >>
Another Ugly Employment Data Point
BY MARK GIMEIN | AUG. 28, 2014
The recession that started with the collapse of the housing market ended five years ago, yet there’s a persistent sense that if we’re out of it, it’s only through a long and ugly slog. While the headline unemployment rate is indeed falling, we keep finding that other indicators of the job market don’t look great. The New York Times‘ David Leonhardt draws attention to the decline in the number of people answering surveys, a problem because the unemployed may be particularly unwilling to tell economists that they don’t have a job.
So here’s another uncomfortable indicator to add to the mix: The number of people who identify as “self-employed.” If small business is indeed the engine of the economy, as politicians like to point out, then self-employment is the engine of small business creation. A new company starts with one person quitting a job to start something new.
Since the recession, the number of self-employed has fallen. Below you can see a chart of the unincorporated self-employed. It’s down from a peak of 10.9 million in 2005 to 9.1 million now (the drop in incorporated self-employed workers is similar). At first, you may suspect self-employment might climb in recessions, as some folks move from jobs to unsteady — and sometimes marginal — freelance work. That, however, isn’t true: The self-employment number has historically behaved like other indicators of employment, rising in times of prosperity and falling in recessions.
Read more from Bloomberg >>
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