Here are some charts from Reader Tim Wallace that help explain my report a few days ago that 23% of Small Business Owners (Approximately 6.21 million) Report "No Pay for a Year"; New Zealand, Singapore, US, Best Places to Start and Run a Business
The first chart below shows actual employment of covered workers compared to the civilian population and labor force. Covered employees are those eligible for unemployment benefits (working or not). Some are currently collecting those benefits.
In the following charts, "covered employment" or "net employment" refers to those with benefits and currently working.
Population, Labor Force, Covered Employment
click on any chart for sharper image
Self-employed workers and contractors are not eligible for unemployment benefits even though they have to contribute to state unemployment insurance schemes. It believe it is government-sponsored fraud to have to pay unemployment insurance when there is no chance of ever collecting it.
The next chart shows state level employment data. Net covered employees (those currently with a job covered with unemployment benefits) was calculated by subtracting continuing unemployment claims from the pool of all covered workers.
Covered Employees, Net Covered Employees, Continuing Claims
The next chart compares BLS employment numbers to net covered employees (those actually working).
BLS Employment , Covered Employment, Non-Covered Employment
Notice the widening gap between covered employment and employment as reported by the BLS. In 2008 and again in 2010 the difference between BLS employment and Covered Employment as noted by the green line (right axis) was about 15 million.
This month the difference is nearly 19 million. The table below shows the precise numbers.
|Year||Covered Employees||BLS Employment||Non-Covered Employment|
Bear in mind, that making money or receiving a paycheck is irrelevant to the BLS when they compute the unemployment rate. If you work as little as 1 hour, whether you collect a paycheck or not, you are considered employed.See article for additional stats on working with no pay as well as a county-by-country comparison as to the best places to start and run a business.
In addition to the 6.21 million business owners with no paycheck, factor in those selling trinkets on EBay out of desperation and collecting a few dimes in the process.
Also factor in all those starting multi-level marketing schemes and calling it a business. How many get sucked into that losing proposition every year? Yet, to the BLS, it's a job if you worked any hours.
The ease of starting a business in the US is a great thing. Unfortunately, making money in a small business startup is not so easy.
Historic trends suggest half of small businesses will fail within 5 years, and I highly suspect future trends will be much worse.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 24th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 23rd, 2014 | John Ransom