- In August, 14.5 million people were self-employed, down 2.1 million from the most recent peak in December 2006, according to Bureau of Labor Statistics data.
- The number of "incorporated" self-employed workers — those who incorporate to gain legal protection and other benefits — began its decline in 2008. Last month, 5.1 million people were in this category, down 726,000 from August 2008.
- The decline is a "troubling" trend, says Scott Shane, professor of entrepreneurial studies at Case Western Reserve University. This category, which usually represents businesses that hire more employees than the "unincorporated" self-employed, was showing healthy growth before the recession, he says.
- Unincorporated self-employed — at 9.4 million last month ....(is) hovering at its lowest level in 25 years, says BLS economist Steven Hipple.
The article points to a few major issues on why the self employed are not thriving during this 'rebound' (again I'd point to lack of end demand as reason #1 but not cited in the story)
- Financial issues. With tightened bank lending, reduced savings and sluggish consumer spending, many can't afford to start a business or keep an existing one going. Adding to the trouble: Diminished home values make it difficult to get the home equity loans that the self-employed often use for capital. (that is a very good point - home as the ATM machine was a big driver of spending and 'credit' mid decade)
- Vocational moves. Self-employed workers who have lost income-generating opportunities — such as real estate agents and construction workers who were victims of the housing market's slide — could be moving to more secure lines of work or opting out of the workforce altogether, says Ellen Rissman, a Federal Reserve Bank of Chicago economist.
- Psychological worries. "Constant news about the difficult economy makes people hesitant to venture out on their own," says Kristie Arslan, CEO of the National Association for the Self-Employed. (reduced risk taking which is a strike to the heart of the American experience - instead a generation hunkers down just content to survive)