2018 Self-Employment Statistics In The US
Last updated on July 12th, 2018 at 10:27 pm
According to recent federal self-employment statistics nearly 27 million Americans will leave their full-time jobs from 2017-2020, bringing the total number of self-employed individuals to 42,000,000 in the U.S. alone.
Why is this statistic so amazing?
Well, for starters, it means that of an American workforce of just over 126 million full-time workers, a whopping 33% can be considered self-employed. Whether they drive for Uber or Lyft, sell real estate, go into law, or tax preparation – they’re self-employed and in business for themselves.
That’s a lot of people striking out on their own!
So, why do they do it? What compels someone to leave the comfort of their 9-5 to hang up a shingle of their very own and go into business for themselves?
It isn’t necessarily that one person is that much braver than the next, it’s that they feel being self-employed is the best means of employment for them. A sort of flexibility over stability mindset.
Aren’t there serious risks?
What about failing?
What if you have to go crawling back to your boss and ask for you job back?
These are just some of the scary thoughts that might go through a soon-to-be-self-employed-person looking to make the leap from corporate ladder climber to freelance photographer.
Not only does the prospect of working for yourself start to look a lot more difficult than showing up for a “regular” job, you also have to do your own taxes, pay self-employment tax, properly account for each-and-every little expense.
So, why do they do it?
Some studies suggest what we already know – freedom.
This can be as simple is not having to answer to anyone, or creating your own work schedule, or working only on projects you choose.
After all, they’re following a dream, or a passion, and it’s hard to ignore that this endeavor might not pay the bills. Yet, every year millions of Americans make that transition and it’s not because they’re blind to the risks.
At Everlance we applaud the millions of brave people that choose to make this decision.
Should I quit my job and start a business?
Unfortunately, we can’t answer that for you. And neither should a magic 8 ball, or your best friend. Quitting your job and starting your own business is a very personal and impactful decision that shouldn’t be taken lightly.
Let’s take a look at some statistics, maybe those can help you make a decision.
2018 Self-Employment Statistics
Global consulting firm McKinsey found that there are roughly 68 million freelancers in the US. Think about that for a second, the gig economy (Uber, Lyft, Doordash, .etc) has revolutionized freelancing for 1/5 of America and it’s only going to grow larger.
The unfortunate part about statistics on freelancing is that the BLS (Bureau Of Labor & Statistics) is doing a fairly poor job at compiling them accurately – and it’s not entirely their fault.
Why is that? It’s simple, yet complex.
Not everyone that is self-employed is not employed traditionally. There are tens of millions of American’s that take freelance gigs on the side. Whether driving for Uber, or taking pictures at weddings – they have a full-time job and freelance in their spare time.
This is often very difficult to get accurate statistics on and starts to dive into the Unincorporated vs. Incorporated metrics. i.e., “Did this person register a business, or are they doing this freelance on the side with no business?” – You can bet the majority are the latter; especially if the BLS stated in 2016 there were 15,000,000 self-employed people in America, yet one of the largest consulting firms int he world (McKinsey) states there are currently 68 million!
That’s a huge disparity, isn’t it? The reality is that self-employment statistics really are that murky. It’s nearly impossible to quantify the totality of the market, much like it is with the U.S. Census. It’s a decent estimate.
Ok, so we can’t get the most accurate statistics, but of the statistics that we do have – what do they look like?
Total Number Of Self-Employed People In America
Right now the number is supposedly around 15 – 68 million. Ok, so that’s not really definitive is it. Let’s just use BLS’s 15m estimate in 2016 and projection for 40m+ by 2020 and roughly split the difference: 25 million self-employed.
States With The Most Number Of Self-Employed
Rather than list them state-by-state we’ll include the map directly from US Dept of Labor & Statistics.
Breaking this down visually…
- Everything green is above 10% of the population is self-employed.
- Everything blue is below 10% and closer to 8% self-employed.
The west and southwest, with the exception of Nevada, have very high self-employment rates. While the East, excluding Maine, New Hampshire, Vermont & Florida are relatively low.
Does this mean that you can’t be self-employed in New York City? Or Nevada? Or that you have a better chance of being self-employed in California vs. Mississippi? Not necessarily.
There are many factors that go into self-employment statistics like this. This map is simply a visual representation of where we are currently, and quite honestly, we feel the gig economy (uber/lyft) are widely unrepresented. We wouldn’t be surprised to see the majority of the US in light green!
What Is The Average Age Of Self-Employed People?
Now this stat might just blow your mind! Do you see that graph? The higher the bar, the more that age group is is self-employed.
You might have thought that a group within the average working age of 25 – 55 years old would be the highest – but no.
Instead, it’s clear that people over the age of 65 make up the majority of the self-employed people by age bracket!
Of course, if you added up all of the other ages you’d have a higher total than the 65+ age group, but still, that’s incredibly impressive.
Does this mean you can’t start a business at 16, or 22 or 44? Absolutely not. You can start a business at any age, and let this chart be proof of that. You’re never too old to start a business!
Which Has A Larger Percentage Of Self-Employment: Men or Women?
Self-employment rates are higher for men than women.
In 2015, 7.4 percent of men were among the ranks of the unincorporated self-employed, compared with 5.2 percent of women.
The incorporated self-employment rate for men was 4.9 percent, compared with 2.3 percent for women.
Men are more likely than women to work in occupations that have large proportions of self-employed workers—for example, in construction occupations and in management occupations
Does this mean that you can’t start a business if you’re a woman? Or that you’ll instantly be successful if you’re a man? Heck no! We’re all equal here and everyone has a shot at starting a successful business, whether it’s a side hustle driving for Uber, freelancing dance lessons or selling t-shirts out of the back of a car.
If you want to start a business don’t let the silly stats sway you!
Remember, if you do start a business (or are currently self-employed), Everlance is the #1 mileage & expense tracking app for a reason. It simply works!
Self-employed people need all of the tax breaks they can get and there’s no better way to track your tax deductible mileage and daily work expenses than Everlance.
You can download and use Everlance for free. For $5/mo you can have access to unlimited trips & automatic expense tracking, and when it’s time to pull your reports it’s at easy as logging in to our Dashboard and exporting your data. Whether you give it to a tax preparer or DIY it with tax software like TaxAct – the choice is yours.
Everlance makes tracking mileage & expenses nearly effortless and the cost is so low that it should be one of the easiest business decisions you’ll ever make.