Self-employment climbs slowly in latest report

Today’s so-so jobs report offers an opportunity to revisit a topic we’ve dealt with before at Ground Level — the role of self-employment in the overall jobs market.

The census bureau last month released another year’s set of data showing that as overall job levels declined in Minnesota in 2009 and again in 2010, the number of self-employed people rose a little.

Here’s the graph that Cameron Macht, a regional analyst for the Department of Employment and Economic Development, put together off the new numbers:

nonemployer graph 9-7-12.jpg

(“Covered jobs” are what you typically think of when you think of people working — they’re covered by unemployment insurance. “Nonemployers” are people making income by working for themselves and not part of a company that hires others.)

Obviously there was hardly a one-to-one replacement. Covered jobs fell by more than 100,000 over those two years and nonemployers rose by only 5,000 or so.

But Macht says that general trend is seen in past recessions as well. (See the shift from 2002 to 2003.) People lose their regular jobs and go to work for themselves to generate income. He wrote a good analysis of this phenomenon in December 2010.

The recent self-employment numbers rose more slowly than he expected, he said in an email, possibly because self-employed people themselves were also going out of business in the recession.

But the numbers do lend credence to those who argue that entrepreneurship is an increasingly key component of the region’s economy. If you want to explore that phenomenon further, check out our One Job at a Time project from earlier this year.

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