PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Entrepreneurs with Employees Benefit in Significant Ways

By at 18 April, 2024, 11:18 am

by Raymond J. Keating –

Entrepreneurship – that is, owning and operating your own business – has long been part of the American Dream. And that’s been good news for Americans given that entrepreneurship is the key source for innovation, and economic, income and employment growth. For good measure, entrepreneurship serves as a competitive advantage for the U.S. in the global marketplace.

But what’s been the state of entrepreneurship in America in recent times? SBE Council has examined this question at various times (such as here and here). And now Gallup makes a contribution with a new survey that focuses on business owners who have employees.

What did Gallup find? Here are a few key takeaways:

● “Adults who employ others score higher than other groups, including employees and non-employer owners, on a variety of measures — income, wealth, life evaluation and work engagement.”

● As for a picture of employment and entrepreneurship, Gallup reported: “Business owners with employees (hereafter referred to as owner-employers) only comprise an estimated 2.4% of all working adults in the U.S. Yet, other forms of business ownership are somewhat common. In addition to owner-employers, 15.3% of the workforce earns some money from self-employment but primarily works for an employer. Another 11.3% are mostly self-employed, and 6.9% are non-employer owners, meaning they are not independent contractors but business owners who do not have employees. Just under two-thirds of workers (64.2%) work entirely for others.”

A key point here is that entrepreneurship plays a part in the careers of roughly 36 percent of American workers. That’s strikingly hopeful.

● “Three in four owner-employers (75.4%) indicate high levels of engagement at work, compared with 68.1% of non-employer owners and 50.9% of employees.”

● “Two-thirds of owner-employers (66.7%) rate their current and future lives highly enough to be considered ‘thriving’ on a zero-to-10 scale. That figure compares with 52.1% among non-employer owners, 50.7% among employees and 48.1% among self-employed workers.”

● “In the Gallup survey, owner-employers have a median personal income of $110,000, compared with $24,000 for non-employer owners and $62,000 for employees who do not own a business. Owner-employers also have a strong advantage in median household income, reporting they earn $175,000 annually, compared with $100,000 for non-employer owners. Employees have similar household incomes ($110,000) as non-employer owners.”

There’s a great deal to ponder from the above points and the rest of Gallup’s findings. But an undeniable takeaway is that entrepreneurship – to varying degrees – plays a direct and significant part in many Americans’ lives. In addition, entrepreneurs who employ others are, by far, the most well off in terms of income and outlook on their lives.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

 

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