Today, the U.S. Census Bureau released new data showing that nonemployer establishments grew by 2.0 percent, from 2015 to 2016 but their real revenues grew by just 0.2 percent—evidence of a very small economic impact. In fact, over the medium-term there has been a slight decline in the nonemployer establishment share of all revenue, dropping from 3.3 to 3.1 percent of all revenue between 2007 and 2016. This indicates that the growth of nonemployer establishments seems to reflect the growth of self-employed individuals (including independent contractors) operating unincorporated businesses that generate very little revenue, including the period since 2011 when Uber, Lyft, and other online platform work expanded rapidly.
Our analysis of these new nonemployer establishment data affirms the pattern seen through 2015, as we wrote about yesterday: these data confirm previous general findings regarding Uber drivers, all online demand platform work, and independent contractors more generally. These previous findings are:
- There is an increase in the amount of people involved in self-employment or online platform types of work activity;
- The increase is primarily among people who are doing so to earn supplementary income and for a short amount of hours. The increase in the various self-employment activities has not occurred in people’s “main job” or as their main source of income; and
- The economic scale of these activities has not increased greatly when measured as a share of hours worked or compensation earned. While “headcount” measures do show a large increase, the overall economic impact is relatively small.