Flying solo

Additional research by Eric Wagner

The self-employment sector is often depicted as a haven for nonconformists, so maybe it’s appropriate that there seems to be an infinite number of ways to count Americans working on their own.

Our chart uses data from the Social Security Administration, which offers the advantages of exact figures (rather than estimates from a survey) and a state-by-state breakdown. The totals here may be skewed, however, because they include individuals who get only a small part of their income from self-employment, and also because they exclude the owners of incorporated businesses, even if those businesses have no other employees. Within these parameters, Massachusetts ranks 11th in the share of its workforce who work for themselves. However, the state is a lowly 30th when ranked by the growth of this sector from 1997 to 2002, even as next-door Connecticut just misses the top 10.

The SSA does not offer data on the type of jobs held by the self-employed, but Census Bureau data on “nonemployers” (i.e., “businesses with no paid employees”) showed a large increase in the number of freelancers working in real estate in Massachusetts (from 33,000 to 44,000 between 1997 and 2002) and a drop in the number working in “professional, scientific, and technical services” (from 90,000 to 87,000 during the same period). Connecticut showed similar patterns but, unlike Massachusetts, registered significant gains in construction, health care, and arts and recreation.

For a longer-range view, there’s Self-Employed Business Ownership Rates in the United States: 1979-2003, a report commissioned by the Office of Advocacy at the US Small Business Administration. Author Robert Fairlie used data from the Census Bureau’s Current Population Survey and calculated that there were about 12.2 million self-employed workers nationwide in 2003. The estimate is significantly lower than the Social Security total because it does not include agricultural workers or individuals who spend less than 15 hours per week on self-employment ventures. (It does include the incorporated self-employed, however.) Fairlie’s bottom line is that 9.8 percent of the workforce is self-employed – almost identical to the Social Security figure and up only slightly from 9.3 percent in 1979.

NOTE: “Self-employed” totals do not include single-employee incorporations. Workers with earnings from both “wage and salary” employment and self-employment are included in the self-employed category, accounting for about 6.21 million of the 15.15 million in the US total.

Sources: Social Security Administration ( www.ssa.gov/policy/docs/statcomps); US Census Bureau (www.census.gov/econ/census02/); Small Business Administration (www.sba.gov/advo/)