Rogue Valley Nonemployer BusinessesDecember 9, 2016
So you want to be your own boss, the maker of your own destiny and have no one to tell you what to do or how to do your job? Maybe you like to drive, have a car and want to work with people? You could be an Uber driver, or you could be another of the more than 22,000 nonemployers in the Rogue Valley if running a taxi service isn’t your cup of tea.
Nonemployer Statistics is an annual series published by the Census Bureau that provides subnational economic data for businesses that have no paid employees and are subject to federal income tax. The data consist of the number of businesses and total receipts by industry. Most nonemployers are self-employed individuals operating unincorporated businesses (known as sole proprietorships), which may or may not be the owner's principal source of income. Tax-exempt businesses are excluded from the Nonemployer Statistics.
The majority of all business establishments in the United States are nonemployers, yet these firms average less than 4 percent of all sales and receipts nationally. Due to their small economic impact, these firms are excluded from most other Census Bureau business statistics (the primary exception being the Survey of Business Owners). The Nonemployer Statistics series is the primary resource available to study the scope and activities of nonemployers at a detailed geographic level for areas such as the Rogue Valley.
We often focus on “payroll employment” or “nonfarm payroll employment” in many articles and local analysis. But anyone analyzing a regional economy would be remiss to ignore these nonemployer businesses and their contributions to the overall economic landscape. In October 2016, there were about 87,000 nonfarm payroll jobs in Jackson County. That same month there were about 98,000 employed residents in Jackson County. Some of the difference is that it’s not an apples-to-apples comparison. The former is a count of jobs by where the job is located; the latter is a count of employed people based on where they live. Another difference is that payroll employment figures exclude self-employed and nonemployers from these published monthly employment estimates, as well as many agricultural and other jobs not covered by unemployment insurance.
Jackson County Nonemployers
In 2014, the most recent year available, there were 16,447 nonemployer businesses with receipts totaling $734,097,000 in Jackson County. Receipts include gross receipts, sales, commissions, and income from trades and businesses, as reported on annual business income tax returns. Business income consists of all payments received for services rendered. Professional, scientific and technical services; followed closely by other services, e.g., repair and maintenance services (automotive, precision equipment, etc.), personal care services, and business and professional organizations had the largest number of nonemployer businesses, both with over 2,000. These two industries accounted for about 30 percent of total nonemployers. About 10 percent of nonemployers were in the health care and social assistance industry or in real estate and rental and leasing. There were about 1,500 construction nonemployers in 2014, or just less than one out of 10 of total nonemployers. Nonemployers are found in all broad industry groups, but were less prevalent in mining, utilities, information, accommodation and food service, and wholesale trade. These industries combined accounted for only 5 percent of total nonemployers in Jackson County.
Annual nonemployer data are available back to 2002. Prior to that, nonemployer data was available from the Economic Census conducted every five years. Total nonemployers businesses rose steadily from about 13,560 in 2002 to a peak of about 16,550 in 2007. During the Great Recession, the total declined to 16,034 in 2008. Since then, total nonemployer businesses edged back up slowly to reach 16,477 in 2014, still below the pre-recession peak seven years earlier. It is possible that the loss of nonemployer businesses wasn’t as steep as it could have been during the recession, because some people may have lost payroll jobs and subsequently started their own businesses.
Josephine County Nonemployers
There were 5,702 nonemployer businesses in the county in 2014, with receipts totaling $233,101,000. In other words nearly one-quarter of a billion dollars in receipts for “mom and pop” operations in Josephine County. Other services was the largest nonemployer industry, accounting for about 18 percent of total nonemployers, with about 1,000 businesses. There were just over 600 professional, technical, and scientific services; construction; and retail trade nonemployers, each with about 11 percent of the county’s total. Accommodation and food services, as well as information industry had 77 nonemployers, each accounting for 1.4 percent of the total. There were just a handful of mining and utility nonemployer establishments in Josephine County.
The county’s number of nonemployer businesses rose steadily and briskly from 5,489 in 2002 to a peak of 6,234 businesses in 2007. During and after the Great Recession, businesses declined about as sharply as they had risen in the previous five years. Total nonemployer businesses fell to about 5,580 in 2013. Only in 2014 did the county see an uptick in nonemployer businesses, up to 5,702. Looking at just the construction industry trend is one factor in the weak rebound in nonemployers. In 2004, there were 923 construction industry nonemployers. By 2010, the number fell to 776. Even in the most recent year available, construction nonemployers continued to fall, reaching 661 in 2014.
Another advantage of this nonemployer data from the Census Bureau is the level of detail available. Since it’s not estimated or survey-based data, statistics are available at more detailed industry level, sometimes down to 5-digit NAICS industry categories. As the nature of employee-employer relationships continues to evolve, it is worth keeping tabs on these nonemployers, to look for trends possibly shifting toward more self-employed, independent contractor type of work arrangements. For additional detailed nonemployer industry information or data about other areas, go to www.census.gov/econ/nonemployer/index.html.