EMBARGOED UNTIL: 12:01 A.M. EST, JANUARY 18, 2001 (THURSDAY) Public Information Office CB01-10 301-457-3030/301-457-3670 (fax) 301-457-1037 (TDD) e-mail: pio@census.gov Paul Zeisset 301-457-4151 Sales By Nonemployer Businesses Top $580 Billion, California Leads States, Census Bureau Reports About 70 percent of the nation's 21.8 million business establishments in 1997 had no paid employees, according to a report issued today by the Commerce Department's Census Bureau. The report said nonemployer businesses recorded sales or receipts of $586 billion or 3.3 percent of the $18 trillion in 1997's total business sales and receipts. Nonemployers consist mostly of individual proprietorships (13.6 million), but also include 860,000 partnerships and 946,000 corporations that do not file payroll taxes. Nonemployers do not include all self-employed individuals, since more than 1 million self-employed business owners have paid employees and, therefore, are classified as employer businesses. Many nonemployer businesses are part-time ventures and individuals may operate more than one of these. California had more nonemployer businesses than any other state, but Alaska and Maine had the highest proportion of nonemployers among all states, largely because of the high number of individual proprietors engaged in fishing in those states. The report, 1997 Economic Census: Nonemployer Statistics, is the first ever to provide a comprehensive profile of nonemployer businesses by the North American Industry Classification System (NAICS) and geographic area. Access NAICS tables here. "These very small businesses are excluded from most other business statistics," said Census Bureau analyst Paul Zeisset, "yet they form an important part of many industries." Four economic sectors made up 58 percent of all nonemployer sales or receipts real estate and rental and leasing, $102 billion; construction, $87 billion; professional, scientific and technical services, $81 billion; and retail trade, $69 billion. Industries in which nonemployers have the highest receipts were: long distance freight trucking, $12.5 billion; direct selling establishments, $12.3 billion; used car dealers, $11.9 billion; and insurance agencies and brokerages; legal services; and offices of physicians (except mental health practitioners), about $9.7 billion each. Some smaller industries are notable because nonemployers accounted for large proportions of all of their business receipts (those of employers and nonemployers). They were: barber shops, 76 percent; nail salons, 63 percent; translation and interpretation services, 57 percent; independent artists, writers and performers, 54 percent; offices of mental health practitioners (except physicians), other direct selling establishments, and taxi and limousine services, each with about 45 percent; child day care services, and reupholstery and furniture repair, 36 percent each; and used merchandise stores, 27 percent. The economic impact of nonemployers relative to employers varies by state: -- In Wyoming, New Hampshire and Montana, nonemployers accounted for 20 percent or more of professional, scientific and technical services receipts. By comparison, the national average was 12 percent. -- In five states -- New Hampshire, Arkansas, Maine, Oklahoma, and Connecticut -- 15 percent or more of construction receipts came from nonemployers. The national average was 9 percent. -- Nonemployers in Arkansas, Oklahoma, Mississippi and California accounted for 3.7 percent or more of retail sales. The national average was 2.75 percent. The report shows the number of establishments and their receipts for 291 NAICS industries for the United States and states. On the Internet and on CD-ROM, county and metropolitan area data also are included. To reduce the response burden on small businesses, economic census forms were sent only to those with paid employees. Nonemployer statistics were compiled from business tax records. The data are subject to nonsampling error from such sources as errors of self-classification by industry on tax forms, as well as errors of response, nonreporting and coverage. Further information about methodology and data limitations may be found in the report.
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