A Look at the Self-Employed (Self-Employment is trending upwards in America)

New York Times ^ | 02/03/2011 | Caherine Rampell

[SeekAndFind]

Conventional wisdom over the last few years has been that, with staff jobs scarce, more of America’s relentlessly entrepreneurial workers have turned to self-employment. The numbers don’t quite bear that out.

Here’s a chart, using data from today’s jobs report, showing the percent of employed workers who are self-employed, regardless of whether they are incorporated:

Source: Bureau of Labor Statistics

The numbers are not seasonally adjusted, which accounts for some of the noise. But even so, the self-employment rate had generally been trending downward over the last year, and has only recently ticked upward.

[Uncle Ike]

Don’t trust these numbers - a LOT of ‘self-employed’ ain’t reportin’ to the Gummint....

[Fred]

Yea, they are called illegals..

[Tax-chick]

a LOT of ‘self-employed’ ain’t reportin’ to the Gummint ...

True! And given the high costs and tax penalties for self-employment, why would they? If the Zero Administration wanted to "create jobs," they could take some of the burdens off self-employed workers and watch a few million jobs miraculously "appear."

But no, stifling the economy and centralizing control of everything is what they really care about, not employment.

[goldstategop]

Home business people are self-employed. The best way to get into it is network marketing.

[nesnah]

Yup, and they are starving the beast by going back to basics and keeping everything local, and paid with white paper and green ink.

It works very well.

[Paladin2]

Can more going Galt be far behind?

[freekitty]

Sure NY Slimes.

[radpolis]

Our government is worthless.

Self-employment is a good thing, but to be self-employed, the government taxes you twice for the privilege.

Even at the local level, at least here in California, the business permit taxes and regulations are onerous, unless you are an illegal, then you are free to do whatever you want and the bureaucrats and politicians will facilitate their criminality.

God help you if you are an American citizen though, the government will use all its power to destroy you.

[goldstategop]

It sucks working to make someone else rich. Why not work for yourself and have that money come to you? Hence the appeal of being self-employed.

[Oldexpat]

There has been a marked increase in the number of native American’s who are also working and paying in cash to avoid the onerous costs of govt reporting and licensing. Since the illegals are rarely prosecuted or fined for this..many small contractors and service people are also adopting the practice.
It is one way to compete with lower cost illegal labor.
Report enough of your income to get the earned income exemption and do the rest in cash.

[Agamemnon]

Too many fearful of what it means to be self-employed are posting to this board today, it seems. Sure there's risk involved as there is with everything.

That said, nothing truly great was ever acheived without risking something of value in the process. And it often takes hard work and self-motivation to make it all work in the end.

There's not a huge number of folks who are both dis-satisfied in their present lines of work, and perpetually stuck in the W-2 world that exhibit both traits, and fear tends to serve as the primary motivational killer for embarking on another path which might change all that for the better.

Too often the W-2 world causes one to harbor what often turns out to have been a false sense of security all along. When or if they become unemployed, they fret. And they often live in fear of that too.

Significant freedom and tax advantages come with self-employment that most 9-5, strictly W-2 folks have little or no appreciation for, unfortunately.

According to the article, however, it appears that there are more that are willing to put the fear behind them, venture out, lose the phoney W-2 pacifier, and become successful, free, and happy, as they write their own paycheck.

FReegards!

[jimpick]

I don’t think it is fear so much as wondering how to deal with the increased regulations. I stopped working for my self when it became evident that the current political class decided that I should pay for their programs with out any benefit for myself. Instead I am using this time to broaden my education and bidding my time. When it becomes obvious how pandering to special interest is destroying this country and the dems are out I will again start working for myself. At this point it’s is to hostile for me to start a new business.

I don’t consider it worth my time to fill out form after form for the government to lose.

[Agamemnon]

Seems that if you are getting education you are filling out more things than just "forms." I'm speaking of things like scholastic registration and possibly aid and scholarship forms, test/term/composition papers, thesis perhaps -- none of which are putting any gainfully earned money in your pocket. Quite the opposite in fact.

If you're not working at all then you're not W-2 either. Perhaps you are independently wealthy and can drop out of the work force for a time until the situation changes. If that is you, you'll note that since you aren't W-2, I wasn't speaking of you in my last post.

FReegards!

[bog trotter]

To which I respond, AMEN and AMEN! Especially those still drawing one or more gubm’nt handouts.

[jimpick]

My problem is with the State Of Michigan. Specifically the fact that they lost my licensing fee 3 times. Plus the fact that they imposed a 22% service fee. This fee is on total gross not profit. Makes you want to not do any thing when you know the state spends millions on a state police post when the current building could be renovated for about a million. Special favors to the friends of the governor. This picking and choosing who will win and who will not is not acceptable to me so I choose to remove myself from the market.

[Agamemnon]

I'm incorporated in the State of Nevada and maintain a Certificate of Good Standing ($250/yr) in CT which grants me formal permission to do business here. I collect sales tax on in-state sales but most of my business is billable out of state -- so no sales tax is collected on stuff I do in NY for instance

Plus the fact that they imposed a 22% service fee. This fee is on total gross not profit.

You've mis-stated the situation in MI.

As quoted from the Wayne State Law Review (Vol. 53:4 p.1275-6):

"On January 1, 2008, the State of Michigan implemented a new tax, labeled a modified gross receipts tax (MGRT). The label is misleading. The tax is not on gross receipts but rather on gross receipts reduced by “purchases from other firms,” defined generally to include inventory purchased during the taxable year, capital purchases, and material and supplies.... The Michigan Legislature enacted the Michigan Business Tax (MBT) on June 29, 2007. The new tax regime, after amendments adopted on December 1, 2007, became effective on January 1, 2008. The amendments, inter alia, imposed a surcharge of around 22% on the various components of the MBT. That surcharge replaces the revenue that had been expected from a 6% sales/use tax on services, which was repealed at the same time."

It's kind of like replacing a sales tax with a VAT -- not that that is "good," but it is not at all like you stated it to be in your comment. I'd fire your accountant.

Can't really say anything about whatever happened to your licensing fee, but maybe since the (R)'s are back in power there, a better sense of fiscal and functional responsibility will take hold.

Those "friends of the governor" about which you spoke are presently without their former benefactor.

Good luck.

FReegards!

[Revolting cat!]

I’m unemployed self-employed collecting my second 99 weeks of unemployment compensations. Life ist gut!

[jimpick]

I may have misspoken about the tax as I was out of state for 2 years. Every time I deal with the state of Michigan they loose the paper work and charge me for it.

Part of my frustration is with a ex business partner who cost me about $600,000 and over a years worth of work. He developed a meth habit. So I have stepped out for a little while till the business environment improves in the state. I expect this to happen with in 2 years.

[tbw2]

Can the self employed collect unemployment?