NCPA - National Center for Policy Analysis

Are We Losing Our Entrepreneurial Spirit?

December 1, 2000

The common wisdom is that more and more Americans are going into business for themselves. But recent figures paint a different picture. Self-employment during the past six years has actually fallen both in terms of numbers and as a proportion of the workforce. Experts say that is due in part to the booming economy and seemingly endless employment opportunities.

  • Since 1994, the number of self-employed Americans outside agriculture has declined by 146,000 -- to 12.9 million -- according to the Bureau of Labor Statistics.
  • The period between 1994 and 1999 -- often hailed as a golden age for entrepreneurs -- was the first five-year span since the 1960s in which the number of self-employed persons fell.
  • In 1994, 10.9 percent of the nonagricultural work force was self-employed -- a figure which dropped to 9.9 percent last year.
  • By contrast, for most of the last three decades, self-employment grew slightly faster than the overall work force.

Moreover, Americans are increasingly taking jobs with big companies. Businesses with at least 1,000 employees have grown the fastest since 1994. But the percentage of people working for businesses with fewer than 25 workers has slipped to 29 percent from 30.1 percent.

Source: David Leonhardt, "Entrepreneurs' 'Golden Age' Has Failed to Thrive in 90's," New York Times, December 1, 2000.


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