It’s a common lament in America that we spend too much time working for “the man.” But these days, more and more of us are the man.
According to the Census, more than 10 million Americans are self-employed, up from about 8 million in 1980. Even more telling, the number of “non-employer firms” — businesses with no payroll — recently topped 20 million, up from 15 million in the late 1990s. A lot of people with jobs also have businesses on the side they hope will become big enough to support them.
And so the term “boss” today applies to a lot more of us than ever before. If you have 6 million bosses in companies across the country, and 10 million self-employed, then out of 145 million people working, roughly one in 10 can be said to be the boss. No wonder Michael Scott of “The Office” — who at least is the boss of his own domain — is the center of workplace satire today, rather than lunch-bucket stiffs like Archie Bunker or Mary Tyler Moore. As bosses, we are the chief executives of billions of dollars of value, even if it’s just a sideline, a startup or not yet fully formed.
If the U.K. is a nation of shopkeepers, the U.S. is a nation of consultants. Americans who run their own businesses do everything from construction to financial services to agriculture, but by far the biggest industry for self-employment is “professional and business services.” The trends up to 2007 are clear — as family farming and mom and pop storefronts declined, professional services, construction, and financial services were on the rise. These growing areas were particularly hit by the economic crisis.
The self-employed have tended, historically, to be older, male and white, although that’s changing. Between 1976 and 2003, the percentage of self-employed workers who are women jumped to 39% from 27%. The self-employed are also over-represented at the bottom and top of the income and education curves, which underscores the risk/reward nature of running your own business and is one of the reasons that entrepreneurship has been so valued in American culture.
Overall, small businesses make up 55% percent of all jobs, and account for 54% of America’s sales. Back when family farming was a major American enterprise, a greater percentage of American workers were self-employed. But in recent decades, with the growth of corporations, Americans have tended to want to join the ranks of established companies. Now, a microtrend of folks is choosing the opposite. Some of them are doing it because they want to; others, like laid-off lawyers, are doing it because this economy has left them no choice.
Capital-intensive businesses may be hard to launch right now — banks are still very nervous about lending, even to savvy startups — but 21st-century economic entrepreneurial building blocks are widely available. Office space is plentiful and cheap. So are college graduates. For a couple thousand dollars, you can incorporate, design and trademark a logo, launch a Web site, and set up your own email domain. Yes, at the moment, people have a little less money to spend on whatever you’re selling, but in some ways, it’s never been easier to lay the foundation for a business and to be ready to soar when the market picks up.
The implications of America’s growing number of bosses are significant. Some are psychological: For all the depressing economic news out there, Americans are not destined to be helplessly buffeted about. Our entrepreneurial spirit is alive and well — even if stoked somewhat by fear, as well as ambition. Rather than cowering, some people are trying to moonlight, freelance and start-up in ways they wouldn’t have had the motivation to before.
Of course, along with more entrepreneurship comes more questions about government regulations and red tape. Entrepreneurs have to fill out all those forms, while employees tend to be shielded from the full extent of it.
Another implication of Boss Nation is that the more people who work for themselves, the more pressure there will be on policymakers to figure out non-employer-based health insurance. In one recent survey, 45% of currently employed workers who said they would not consider working as free agents said that at least one reason was health insurance. Change that hurdle, and our entrepreneurial spirit may really fly.
An independent workforce also has huge implications for family life. When more people work for themselves, a good portion of them, at least initially, are going to work from home. That can sometimes be stressful but can also save commuting time and increase time with the kids. But when you are the boss at work, it is also tempting to want to be the boss at home, which can lead to domestic friction.
Look also for a surge in home-office deductions. What used to be a quirky provision in the tax code for the occasional dentist or psychologist who would set up a separate shop entrance in his house is now in line to become a standard entrepreneurship tool — complete with minutely fractional allocations for electric, heating and home-repair expenses.
And do not underestimate the new entrepreneur’s need for technical support services. Whether you’re selling financial advice, carpentry or hand-knit bikinis, you need a full suite of small business supports, from how to track accounts receivable to how to insure that first employee who’s driving your “company” car. Geek Squad has the right idea, but if the number of entrepreneurs continues to grow, the demand will go well beyond virus protection and printer installation and into the realm of Small-Business-Mentors-in-a-Box.
So amid all this economic darkness, one shining light, I believe, will be the resurgence of entrepreneurial spirit, bringing out the inner boss in all of us.